Aircraft Engine Nacelle Market

The global aircraft engine nacelle market is growing at a rapid rate due to the increase in air passenger traffic and the subsequent demand for new aircraft, increased demand for fuel-efficient and noise-reducing nacelles, and decline in the cost of composite materials. However, backlogs in aircraft deliveries are expected to hamper the growth of the market during the forecast period.

Globally, air passenger traffic has been increasing at a significant pace over the past couple of years. Factors such as decreasing airfares, increasing per capita disposable incomes, especially in developing countries, and higher living standards have influenced this growth. According to the International Air Transport Association (IATA), global air travel is likely to double by 2036. It also estimates that China is likely to surpass the US and become the largest aviation market, in terms of passenger traffic, in the world, by 2024. The US air passenger traffic is growing at a rate of 6.34%, while in China, the air passenger traffic is expected to grow at a rate of 5.69% during the forecast period, 2019 to 2025.

The figure below depicts the number of domestic and international aircraft passengers globally.

To cater to the rising number of passengers, there has been a corresponding increase in the demand for new aircraft. For instance, in 2017, in one of the biggest deals in the history of commercial aviation, Airbus signed a USD 50 billion contract with Indigo Partners (US) to deliver 430 aircraft. Airbus and Boeing booked net orders for 1,109 and 912 aircraft, respectively, in 2017. Furthermore, new airlines are being established in almost every region to tap into the rapidly growing passenger base. For instance, in 2017, more than 70 new airlines were launched around the world.

The figure below represents the gross orders for aircraft of Airbus and Boeing from 2009 to 2019.

With the increasing demand for new aircraft, there has been a significant increase in demand for aircraft engine nacelles. A nacelle is a vital component of an aircraft. It is used to house an aircraft engine, fuel, and various systems of an aircraft engine. Therefore, the increase in air passenger traffic and subsequent demand for new aircraft is expected to drive the growth of the global aircraft engine nacelle market during the forecast period.

The reduction in the weight of various components of an aircraft results in improved performance and fuel efficiency and easy maintenance. The NIPSE project is focused on reducing the size and weight of the engine equipment by 15 %, which would also help cut down the amount of time needed for manufacturing an aircraft by 10%. Moreover, this would also reduce the time needed to access the engine to carry out maintenance in the engine nacelle easily. Moreover, these lightweight aircraft nacelles would take up less space, operate at high temperatures, and be highly reliable and easy to maintain. Therefore, the development of lightweight aircraft nacelles is set to increase in the forecast period. This creates a growth opportunity for the players operating in the global aircraft engine nacelle market during the forecast period.

A single aircraft requires anywhere between 6 and 12 months to be manufactured and tested. The slow rate of production is a major issue faced by aircraft manufacturers, including Boeing and Airbus. Currently, both these companies have a production backlog that would take roughly ten years to clear. The figure below shows aircraft production and a total backlog of The Boeing Company and Airbus SAS in 2017.

The manufacturing of complex aircraft parts requires more time. For example, an engine nacelle consists of several complex parts, including inlet, fan cowl, thrust reverser, exhaust cone, exhaust nozzle, and pylon/strut, which requires more time for manufacturing. This results in extended aircraft manufacturing periods and the creation of backlogs in the aircraft manufacturing industry. Therefore, with the increase in backlogs, the demand rate for aircraft engine nacelle also reduces. Thus, the backlog in aircraft deliveries is expected to restrict the growth of the global aircraft engine nacelle market during the forecast period.

Composite materials are becoming increasingly important in aircraft manufacturing. However, these materials have raised concerns among the ground support staff as it is difficult to detect and fix damages in components made using composites.

A significant consequence of the particularly high-bypass ratio of new engines is that the nacelle is made of large composite elements of complex shape. A nacelle consists of several composite elements, which require a different skillset to repair compared to standard repairs in metal nacelles.

Most aviation personnel, including ground crews, can identify a dent or a tear in a metallic structure and reporting it as suspected damage. However, after a substantial impact, a composite structure could appear undamaged if no surface marks or flaws are present. Moreover, they may go unreported as major damages have a similar appearance as small dents on a metallic structure, which ground crews may be inclined not to report. This could lead to a situation where damage is not reported and is, subsequently, not repaired. In addition, the reliability of detecting surface flaws in composite structures is not well established, which means that significant damage may not be reported. This presents a significant challenge to the players operating in the global aircraft engine nacelle market during the forecast period.