Mar 01, 2019

Ground Support Equipment Demand Remains Fuelled by Spiraling Growth of Air Travel and Airline Industry, Finds Fact.MR Study


by Team Fact.MR

According to a new report of Fact.MR, ground support equipment (GSE) will witness a rise in demand owing to lucrative future prospects of the airline industry, with proliferation in air travel passengers and cargo volumes. Emerging markets are expected to present huge opportunities for growth of the ground support equipment market in the near future. 

Demand drivers of the ground support equipment market are directly linked with performance of the airline sector worldwide, and benefit from increasing new and used equipment sales. Corresponding demand for specific types of ground support equipment continues to vary based on dynamics of the regions. 

Promising Outlook of Global Airline Industry to Influence Demand for GSE 

Demand & supply trends of the ground service equipment are directly influence by growth of the airline industry worldwide. The International Air Transport Association (IATA) estimates net profit of the global airline industry to exceed US$ 38 Bn in 2018, witnessing an improvement of more than US$ 34 Bn in 2017. Improved efficiency and robust demand continue to aid airlines in enhancing the net profitability of the industry at a global scale, despite increasing costs. 

According to IATA, 2018 is likely the fourth succeeding year of sustainable profit margins, with an ROI of nearly 10%, which exceeds the average cost of airline industry’s capital – 7.4%. Such impressive growth of the airline industry across the globe alludes positive impacts on the ground service equipment market at present as well as in the foreseeable future. 

The number of air travel passengers has witnessed a significant increase in the recent past, with IATA estimating the number to exceed 4 Bn in 2018. Increasing number of air passengers further results in demand for more aircrafts to cater transit and commute requirements, which in turn will continue to pave lucrative avenues for growth of the ground support equipment market. 

Healthy Future Prospects for Secondary Ground Support Equipment Market 

The market for used as well as new ground support equipment continues to witness promising growth, according to the Fact.MR study. While aspects that underpin use of ground support equipment for wide body aircrafts allude at higher intensity of influence than those that uphold use in narrow body aircrafts. Expansion in number of airports and remarkable increase in passenger traffic are key factors that have driven the demand for ground support equipment in wide body aircrafts. These factors are likely to influence the growth of aircraft tugs market

Continued profits and growth in commercial aviation for international and domestic airlines worldwide, along with opportunities in the private sector, have been driving the demand for secondary ground support equipment. While larger airlines continue to influence purchases of secondary ground support equipment, small scale aviation industries are driving sales of a blend of used and new equipment. 

Fact.MR study opines that used ground support equipment are closing on the saturation stage, as a consequence of continued deposit of these equipment in the secondary market. End-users currently prefer new equipment that feature enhanced efficiency and performance, along with minimum human intervention. 

Time and energy-efficient ground operations have been deemed essential in efforts of the airline industry to meet forecast expansion in demand for the air connectivity. Focus on consistent implementation of global standards, accelerating modernized processes, and enhanced collaborations has become imperative for the players in the airline industry as well as the ground support equipment industry alike. 

While develop regions continue to remain lucrative markets for ground support equipment, increasing air travel in Asia-Pacific and Latin American markets have meant that these emerging nations will showcase abundant opportunities for the ground support equipment market in the near future. Increasing disposable incomes and continued urbanization are key growth influencers for the ground support equipment.