Domestic and international flying hours are expected to continue hitting record highs in 2025, driven by high demand for new aircraft and aftermarket services, S&P Global Ratings said in its 2025 outlook.
The report added that this demand is still being weighed down by the ongoing supply chain constraints. However, airframers are expected to boost their build rates for 2025 as 737 and A320 production ramps up.
“New aircraft production remains below demand, with both Airbus and Boeing still sold out for years,” said S&P Global Ratings aerospace director Ben Tsocanos. “They will continue to ramp up production as best they can, though supply chain challenges are likely to persist through 2025 and into 2026. Meanwhile, demand for air travel stays strong, with revenue passenger kilometres (RPKs) likely to continue hitting record highs, fuelling solid demand for aftermarket services."
The report highlighted key risks for the year ahead, noting a delay in Boeing's production recovery would hurt suppliers and its airline customers, and could also “leave an opening” for Airbus. Profitability in the industry could be further damaged if supply or labour constraints also limit production. S&P also pointed to the Flight 1282 incident where a door plug blew out shortly after takeoff on a 737 MAX 8 in January 2024, stating that “the next [problem] is always around the corner” and are “expensive to fix”. Boeing is largely still trying to recover from the regulatory oversight and production limit caused by the blowout, as well as the strike action later in the year.
S&P said it expects the reliance on older engine equipment to be extended as a result of problems with new engines. “We now eexpect planes with the new-generation engines will displace installed engines more slowly than previously expect,” the report said. “And these delays will in turn delay the delivery of new planes, resulting in extended use of older and driving demand for aftermarket services and parts.”
The report estimated that Pratt & Whitney is “only about a third of the way through” its inspections of geared turbofan (GTF) engines, with limited facility and labour capacity hindering momentum. S&P also noted the durability issues impacting LEAP engines.
Rolls-Royce's civil aerospace operating profit is anticipated to continue growing in 2025 after higher margins on long-term service agreements and higher contribution of aftermarket services, as well as better business jet performance.