South America Aviation Market - Opportunities, Trends and Challenges (2018 - 2023)
The South America aviation market is expected to register a CAGR of 7% during the forecast period, 2018 to 2023, with general aviation market segment in South America expected to reach USD 1.46 billion by 2023. General aviation covers a broad range of activities, both commercial and non-commercial, including sports aircraft, flying clubs, flight training, agricultural aviation, and light aircraft manufacturing amongst others. General aviation forms a considerable component of any national airspace and airport system. As a result, insight into general aviation industry is relevant to issues in air traffic management, air transportation infrastructure, and aviation safety, among others.
Beyond the operational aspect, general aviation is of significance to society as a whole and other stakeholders, including pilot groups, aircraft manufacturers, and the workforce. The performance of general aviation industry is measured using various parameters such as active pilots, new airplane deliveries, number of airports, etc. The market is influenced by several factors such as the health of global economy, technology disruption, the price of avgas, and jet fuels, regulatory standards, etc. Increasing number of passengers using chartered jet, travel and tourism are some of the drivers identified in the current market. Embraer is one of the dominant players in the South America Market, with its range of Business jets selling in high numbers, especially in Brazil. The large cabin jets are performing the best in the market, with an increase in their penetration into newer markets, such as Venezuela, Peru, and Colombia. The penetration of rotary wing is quite substantial in some South American countries like Brazil. Sao Paulo is considered as the helicopter capital of the world owing to the presence of one of the highest number of helicopters per capita in the world. However, in countries apart from Brazil, the penetration of Rotary wing aircrafts is quite low, hence presents an opportunity for global aircraft manufacturers to provide services in this region.
Commercial aircraft sector
Economic reforms, notably in Argentina and Brazil, are expected to stimulate domestic economies and improve the outlook for the region with a GDP growth rate of 3 percent. The Pacific countries of Chile, Colombia and Peru are expected to grow at a higher-than-average GDP rate due to pro-business environments. Due to the steady growth in traffic, the Argentine government in March 2018 announced its plan to invest USD 750 million for airport expansion. Single-aisle jets are expected to make up the majority of new aircraft growth in the next twenty years in Latin America. Branded carriers expanding beyond national borders are forecast to figure prominently in this growth benefitting from movement towards an open-skies policy in the Latin America aviation market. Widebody demand is also expected to increase, with at least 200 new jets.
Key Developments in the Market