Impact of COVID-19 on the Global Aircraft Evacuation Systems Market
The COVID-19 impact on the global aircraft evacuation systems market is evolving every minute. The market has witnessed the immediate and clear impact of the pandemic. The aircraft evacuation systems market had witnessed a boom owing to the rising air passenger traffic in developing countries, including China and India, emergence of new airlines, and stringent government regulations pertaining to aircraft and passenger safety. However, due to COVID-19, airspace restrictions have increased, aircraft have been grounded, and manufacturing activities have come to a halt. Such factors are likely to restrict the growth of the aircraft evacuation systems market worldwide.
Impact on the Global Aircraft Evacuation Systems Market
According to Market Research Future, the global aircraft evacuation systems market is expected to reach USD 2,050 million by 2025, growing at a CAGR of 5.81% during the forecast period from 2019 to 2025. The growth can be attributed to various factors, such as the increasing focus on enhancing passenger safety and stringent air safety regulations. However, the ongoing pandemic has negatively impacted the global market. As the airspace is closed and air travel activities are prohibited, many aircraft are grounded. Most airlines are expected to face heavy losses in the coming months. Airlines that are currently operating during this crisis are offering air cargo services. Moreover, due to the pandemic, the supply chain has also been impacted as aircraft evacuation systems manufacturing facilities are closed.
Moreover, in 2020, a lower GDP of major economies, such as the US, China, the UK, France, Germany, India, Italy, Japan, Brazil, and Canada, anticipate a potential decrease in investments in the aviation industry.
The US is also a hub to major aircraft evacuation systems manufacturers such as Raytheon Technologies Corporation and EAM Worldwide. These companies are actively involved in developing advanced aircraft evacuation systems. However, during the rising cases of COVID-19 in the country, the companies have had to face disruptions such as slow supply chain movement, unavailability of labor, and other factors causing a slowdown in production. However, increasing government initiatives to reduce the losses from the aviation industry is expected to drive the growth of the market in the country. Various airlines are expected to receive financial aid from the US Government to reduce the impact of the crisis and ensure the continuation of essential airline service and protect jobs. For example, in March 2020, American Airlines announced plans to seek USD 12 billion aid from the US Government to ensure the smooth functioning of essential airline services and protect the jobs of its airlines. Moreover, post the pandemic, the airlines will need to invest in aircraft evacuation systems owing to stringent aviation regulations regarding aircraft and passenger safety. Thus, driving market growth in the country.
In the UK, the rising cases of COVID-19 have impacted the economy of the country and the aircraft evacuation systems market. There are approximately 37,460 deaths in the country due to COVID-19 as of May 2020. The pandemic has impacted prominent aircraft evacuation systems manufacturers such as Cobham Limited and Survival Equipment Services Ltd. that are based in the UK. Due to labor unavailability, disruptions in the supply chain, and slowed production, the company is unable to manufacture advanced aircraft evacuation systems. Such factors are impacting the aircraft evacuation systems market in the UK.
Since the outbreak of COVID-19 in the region, the aviation industry witnessed a sharp fall in passenger traffic owing to travel restrictions. According to BBC, the Chinese airline passenger traffic fell by 84.5% in February 2020 owing to the rapid spread of COVID-19. Various regional airlines are expected to sell-off airline assets due to a reduction in bookings to reduce operating costs. However, the increasing initiatives undertaken by the aviation authorities of the country to reduce the impact on the aviation industry is expected to drive the market growth in the country. For instance, in March 2020, the Civil Aviation Administration of China (CAAC) announced 16 measures to stabilize the development of the aviation sector. The CAAC announced plans to provide subsidies to Chinese carriers and offer additional funding support for international services. Hence, the increasing measures undertaken by the CAAC to reduce the impact of COVID-19 on the aviation industry of the country and provide financial assistance to the Chinese airlines are expected to impact the aircraft evacuation systems market in China positively.
According to IATA, by 2035, air passenger traffic in India would surpass the UK to be the third-highest in the world, with the addition of over 322 million passengers, reaching a total of 442 million. Moreover, the increasing domestic air passenger traffic in the country is also expected to drive the market growth in the country. According to IATA, the domestic air passenger traffic in India grew by 8.4% in February 2020 compared to February 2019. However, the ongoing COVID-19 pandemic has impacted the Indian market as well. Additionally, the absence of labor and closing manufacturing facilities is expected to restrict the market growth in the country. However, initiatives undertaken by the Indian government to reduce the impact of COVID-19 on the Indian aerospace & defense industry is expected to impact the market growth positively. For example, domestic flight operations resumed in India from May 2020. This provides an opportunity for the aircraft evacuation systems market in the country.
The Road Ahead
As the aviation industry is adversely affected at this point, losses such as non-execution of contracts are likely to take place. Moreover, the closing of regional airlines paints a worrying picture of the future. For example, in March 2019, Compass Airlines announced plans to shut down its operations owing to the financial crisis due to the ongoing COVID-19 pandemic. The defense aviation industry does not portray a favorable scenario, either. As manufacturing activities continue to stay shut, various prominent defense companies are expected to face losses in the coming months.
Role of Market Research Future
As a market research and consulting company, Market Research Future has been continuously monitoring and tracking the COVID-19 pandemic and its impact on various markets within the aerospace & defense industry. All our research studies have been updated to accommodate the impact of COVID-19 in the respective market to provide customers with comprehensive market data along with present and future trends with macro and micro-level impact factors.