The ground support equipment market is projected to grow from USD 4.0 billion in 2020 to USD 10.2 billion by 2025, at a CAGR of 20.7% from 2020 to 2025. Some of the factors that are expected to fuel the growth of the ground support equipment market are rising demand for electric ground support equipment, increasing warehouse operations at airports, and ongoing expansions of airports to cater to the rising global air passenger traffic. Various defense players such as JBT Corporation (US), Teleflex Lionel-Dupont (TLD) (France), Tug Technologies Corporation (Textron GSE) (US), Tronair (US), Guangtai (China), ITW GSE (Denmark), and Cavotec SA Switzerland) are focusing on improving the efficiency of their ground support equipment. They are also automating the ground support equipment used on ramps and in warehouses of airports. In contrast, the inadequate charging infrastructure for electric ground support equipment and high initial costs of these equipment are expected to restrict the growth of the market across the globe.
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COVID-19 impact on the Ground Support Equipment Market
The COVID-19 outbreak has idled much of the aviation business. Fleet readiness and maintenance are of great importance to tackling the challenges posed by the pandemic.
According to the Airport International Council (ACI) analysis, the impact of COVID-19 on the airport business will result in a 58.4% reduction in passenger volumes in 2020 compared to 2019. The airport industry is anticipating a 60% reduction in revenue as compared to the pre- COVID-19 projected baseline. The substantial decline in passenger and air traffic is expected to impact the demand for legacy equipment in the short term.
Although orders were placed before the COVID-19 crisis, the delay in equipment deployment and installation will affect the equipment supplier business considerably. The spread of COVID- 19 in the US and EU is expected to have a negative impact due to lockdowns at manufacturing facilities. For instance, GSE manufacturer Vestergaard Company, based in Denmark, slowed down manufacturing post Easter 2020
The suspension of commercial travel with lockdowns in major geographies such as Australia, the UK, India, Qatar, the UAE, etc., is expected to affect airport operations significantly. Ramp equipment operators are in a cash preservation mode, as a majority of them operate on a lease basis. Ground operators are, however, expected to pay ramp and office charges at airports. This is expected to have a negative impact in the short term. However, post the COVID-19 crisis, ground operators are expected to recover from the financial crisis once airports are operational at their full capacities.
Driver: Expansion and development of airport infrastructure
Global air traffic has been increasing due to the steady increase in the number of people opting for air travel. This has led airports to expand their operations, resulting in the addition of new terminals, gates, passenger service equipment, and other infrastructure. Each gate of an airport requires ground support equipment to cater to the requirements of aircraft parked at the gate or apron. The demand for this equipment is directly proportional to the development of new airports and the addition of new gates or terminals at existing airports.
Restraint: High acquisition costs of electric ground support equipment
According to an industry expert, the cost of electric ground support equipment can be 50% higher than the cost of conventional ground support equipment. Over the years, there has been a decline in the cost of electric ground support equipment; however, they are still more expensive than their diesel variants. As a result, small- and medium-sized airports find it difficult to deploy electric ground support equipment. The high initial costs of electric ground support equipment can be attributed to their low manufacturing volume. The batteries used in these vehicles are also expensive to purchase and need to be replaced every 5 to 8 years. These factors restrain the growth of the market for electric GSE.
Opportunity: Innovations in technologies used in ground support equipment
The development of hybrid ground support equipment, new batteries, fast charging ports, and improved electric ground support equipment with low maintenance costs is underway across the globe. Innovations in existing electric and diesel ground support equipment offer growth opportunities for the manufacturers of this equipment. According to an industry expert, Vestergaard developed a hybrid deicing truck as well as a hybrid washing vehicle in 2018. These new vehicles are the first of their kind. Hybrid vehicles use both, diesel and electric power for their operation, while deicing trucks have generators that run on diesel and generate electricity to power them and their deicing arms.
Challenge: Overloading of electric grids
A major challenge faced as a result of the adoption of electric ground support equipment at airports is the deployment of conventional diesel ground support equipment. Electric ground support equipment requires regular charging, and the power grids supplying power to airports do not have the ability to support the charging of all types of ground support equipment as it often leads to overloading of the grid. According to a study conducted by MDPI Applied Sciences in 2017, the penetration of large nonlinear loads in airports such as ground power units, PCA systems, and computer equipment, and the increased use of plug-in electric vehicle (PEV) chargers pose potential power quality, delivery, and consumption concerns for providers of electricity at airports due to the potential overloading of distribution transformers and switchgear systems.
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