2021-2041 Aerospace Forecast

FAA Aerospace Forecast Fiscal Years 2021–2041

FAA Aerospace Forecasts
Fiscal Years 2021-2041

9

FAA Aerospace Forecast Fiscal Years 2021–2041

Economic Environment
strict COVID-19 containment efforts in some
countries and slower vaccine rollouts contribute to slower economic growth. On the other
hand, the manufacturing sector has provided
economic support for several countries and
U.S. fiscal stimulus will further boost exports
from that sector. Similarly, Japan's economic rebound in the near-term is supported
by export demand from the U.S. and Asia,
but restrained by sluggish consumer spending and its longstanding demographic trends.
In emerging markets, China’s growth rate
slowed in 2020 but did not contract, underpinned by the government’s drastic but effective COVID-19 containment measures that
allowed early restoration of normal economic
activities. In other large emerging markets,
Brazil provided large fiscal stimulus that
moderated the downturn in 2020 but the
combination of the considerable increase in
public debt plus the withdrawal of that stimulus will dampen the rebound in the mediumterm. Russia, like many other countries, saw
its contraction in 2020 driven by a sharp drop
in consumer spending and those new spending patterns combined with low oil prices and
slow vaccination progress will all dampen the
recovery. While India's economic recovery
may be restrained by a second wave of infections and a slow vaccine rollout, in the medium-term its growth will be supported by favorable demographics and a relatively low
savings rate.

Economies around the world were devastated by measures necessary to bring the
COVID-19 virus under control such as stayat-home orders, limits on gathering sizes for
both public and private events, quarantine
measures and even border closures. In
2020, global real GDP contracted by 3.6 percent, a rate considerably better than that predicted during the early months of the pandemic but still the most severe decline since
1946. Near-term forecasts have also shifted
significantly from one month to the next as
factors such as government support programs, COVID-19 case counts, and vaccine
development and vaccination progress are
all rapidly changing. In the most recent forecast, IHS Markit projects that world economic
growth will rise to 5.1 percent in 2021, up
from the 4.5 percent used in the preparation
of this Aerospace Forecast. By 2023, the recovery and payback from the downturn is
complete and the forecast of world real GDP
growth has returned approximately to the
long-term trend rate of 2.8 percent – unchanged in recent months.
In the U.S., enhanced unemployment benefits, high personal savings rates, and a pickup in consumer spending on services all contribute to GDP strength in 2021 and 2022.
Compared to the U.S., real GDP growth in
Western Europe will be somewhat slower in
the near- and medium-term. Relatively more

10

FAA Aerospace Forecast Fiscal Years 2021–2041

World Economic Growth in 2020

Annual Percent Change

4.0
2.0

2.3

0.0
-2.0
-4.0

-3.1

-3.5

-6.0

-4.4

-3.6

-4.9
-6.7

-8.0

-8.2

-10.0

China

Russia

U.S.

Brazil

Japan

Eurozone

India

World

Source: IHS Markit

Latin America, and Eastern Europe. Growth
in the more mature economies (1.8 percent
a year) will be lower than the global trend
with the fastest rates in the U.S. followed by
Europe. Growth in Japan is forecast to be
very slow at 1.0 percent a year reflecting
deep structural issues associated with a
shrinking and aging population.

IHS Markit forecasts world real GDP to grow
at 2.9 percent a year between 2021 and
2041. Emerging markets, at 3.9 percent a
year, are forecast to grow above the global
average but at lower rates than in the early
2000’s. Asia (excluding Japan), led by India
and China, is projected to have the fastest
growth followed by Africa and Middle East,

Asia and Middle East/N. Africa Lead Global Economic Growth
(annual GDP percent growth 2021-2041)
China

4.4

Asia ex. China & Japan

4.0

M.E. & N. Africa

3.0

World

2.9

Latin America

2.8

Emerging Europe

2.4

U.S.

2.4

Eurozone
Japan

1.5
1.0

Source: IHS Markit, Dec 2020 World Forecast

11

FAA Aerospace Forecast Fiscal Years 2021–2041
supply.
Over the long-run, IHS Markit expects the price of oil to increase due to growing global demand and higher costs of extraction. IHS Markit forecasts U.S. refiner's
acquisition cost of crude to remain below
$100 per barrel throughout the forecast horizon.

As global economic output declined in 2020,
so did the demand for oil resulting in a sharp
drop of almost 30 percent in prices. After
holding at about $60 per barrel in both 2018
and 2019, the price fell to $43 per barrel in
2020 and is projected to continue down to
$36 per barrel in 2021 based on increasing

U.S. Refiners' Acquistion Cost
$ Per Barrel of Oil

$120
$100
$80
$60
$40
$20
$0

Source: IHS Markit

Fiscal Year

U.S. Airlines
Domestic Market
Mainline and regional carriers 3 offer domestic and international passenger service between the U.S. and foreign destinations, although regional carrier international service is
confined to the border markets in Canada,
Mexico, and the Caribbean.

to identify and assess demand as it returns
fitfully from the lows reached in 2020. Next,
and as load factors rise, the focus will shift to
adding capacity back into networks in a cautious and deliberate manner. With demand
beginning to approach 2019 levels, balance
sheets strengthen allowing carriers to adopt
the more customary longer-term strategies.

Over the coming years, the commercial air
carrier industry will be focused on recovering
from the devastating consequences of the
COVID-19 pandemic. First, carriers will work
Mainline carriers are defined as those providing
service primarily via aircraft with 90 or more
seats. Regionals are defined as those providing

service primarily via aircraft with 89 or fewer seats
and whose routes serve mainly as feeders to the
mainline carriers.

3

12

FAA Aerospace Forecast Fiscal Years 2021–2041
returned to pre-pandemic levels and business travel is steadily catching up. Carriers
remain somewhat constrained by debt incurred to survive the crisis and forgo some
capital investments in favor of strengthening
their balance sheets.

The unpredictable demand environment carriers faced in the second half of 2020 is expected to extend throughout 2021. The first
part of the year will likely see a continuation
of weak activity punctuated by spikes around
holidays. Travel will be almost entirely confined to leisure segments of the population
and recreational geographic markets. As the
year progresses, increasing vaccinations
and greater control over infections will begin
to support steadier growth in activity due to
pent-up demand for leisure travel by the
broader population and to a wider range of
destinations. Activity remains low, however,
and carriers seek to stimulate demand by
holding fares down.

Throughout the recovery from the pandemic,
several trends emerged that subsequently
will, to greater or lesser extent, be reversed.
Low-cost carriers targeting leisure travelers
benefitted from relative strength in this segment. The sharp curtailment of business
travel, on the other hand, impacted legacy
carriers and those serving key business markets. And all carriers received a boost from
low fuel prices that were due in part to reduced energy demand worldwide.

The growing and increasingly predictable activity will allow carriers to return capacity to
typical markets, and reduce reliance on
purely recreational destinations. Utilization
rates will rise and carriers will bring parked
and stored aircraft back online. Activity
grows slowly, however, as it is restrained by
the economy and labor markets that also
heal slowly. Although leisure travelers continue to make up the majority of passengers,
shoots of a business travel recovery begin to
emerge. Employees slowly become more
comfortable with travelling again and employers find ways to satisfy duty-of-care requirements. Along with strengthening demand will come rising fares.

Regional carriers suffered very similar consequences of COVID-19 as did the mainline
group. In 2020, regionals provided 11.5 percent of domestic capacity, up just slightly
from 11.1 percent in 2019. In terms of traffic,
regionals saw marginally better performance
than their mainline counterparts, claiming
11.2 percent of RPM in 2020 compared to
10.4 percent in 2019. The deviations in 2020
are expected to be temporary as travel patterns and airline operations begin their recovery to more normal conditions.
The regional market continues to face pressure as the regionals compete for even fewer
contracts with the remaining dominant carriers; this has meant paltry growth in enplanements and yields.

In the third phase, activity begins to approach 2019 levels and industry conditions
begin to normalize. Leisure travel has largely

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FAA Aerospace Forecast Fiscal Years 2021–2041

U.S. Commercial Air Carriers
Domestic Enplanements by Carrier Group

Enplanements (millions)

1,400
1,200
1,000
800

173

159

208

189

228

600
400

654

200
-

2019

94

86

369

353

2020E

2021

710

774

852

2025

2029

2033

247

937

1,012

2037

2041

Fiscal Year
Mainline Regional

U.S. Commercial Air Carriers
Domestic Passenger Nominal Yield

18.00

Revenue Per Mile (¢)

16.00
14.00
12.00
10.00

14.1
11.6

12.3

11.2
9.2

8.00

10.1

9.6

14.3

13.4

11.8

11.0

16.5

15.3
12.6

13.5

7.9

6.00
4.00
2.00
-

2019

2020E

2021

2025
2029
Fiscal Year

Mainline
14

2033

Regionals

2037

2041

FAA Aerospace Forecast Fiscal Years 2021–2041
The regionals have less leverage with the
mainline carriers than they have had in the
past as the mainline carriers have negotiated
contracts that are more favorable for their operational and financial bottom lines. Furthermore, as mainline carriers cut service to
smaller cities during 2020, it was the regional
partners that were most affected. While regional airlines had previously faced some pilot shortages, this problem evaporated with
the onset of the pandemic and the resulting
capacity cuts. As regional carriers recover
and activity returns to 2019 levels, both of
these concerns are expected to reverse: service to smaller cities will return and flight
crews will again be in short supply.

Another continuing trend is that of ancillary
revenues. Carriers generate ancillary revenues by selling products and services beyond that of an airplane ticket to customers.
This includes the un-bundling of services
previously included in the ticket price such as
checked bags, on-board meals and seat selection, and by adding new services such as
boarding priority and internet access. After
posting record net profits in 2015, U.S. passenger carrier profits declined subsequently
on rising fuel and labor costs, and flat yields,
but were supported by ancillary revenues.
Even in 2020 when profits turned to staggering losses, this remained a meaningful
source of revenue for carriers.

A trend for regionals that was largely unaffected by the pandemic is the longstanding
increase in the number of seats per aircraft.
This measure rose by more than 55 percent
over the decade from 1997 to 2007 and although it slowed more recently to an increase
of 17 percent in the ten years ending in 2019,
that same pace generally continued in 2020.
A consequence of this drive to replace their
50 seat regional jets with more fuel-efficient
70 seat jets is that capital costs have increased. The move to the larger aircraft will
prove beneficial in the future, however, since
their unit costs are lower.

On the other hand, revenue management
systems that have grown increasingly sophisticated in recent years became almost
worthless in 2020. These systems enable
carriers to price fares optimally for each day
and time of flight, and to minimize foregone
revenue. But, because they rely on historical
data to make price and schedule predictions,
the unprecedented nature of the collapse in
2020 meant they could provide little guidance and carriers were forced to assess market conditions without the benefit or precision
of that quantitative analysis.
While revenue management systems will regain their important role once travel demand
returns to more normal rhythms, one source
of ancillary revenue, change fees, was
broadly scrapped in 2020. As traveler plans
were forced to change due to COVID-19-related restrictions, airlines began dropping
fees for itinerary changes in many ticket classes. In the middle two quarters of 2020,
change fee revenue fell by about 90 percent
compared to 2019, while other miscellaneous fees contracted by less than 50 percent.
Some airlines have stated that the elimination of change fees is a permanent move and

Mainline carriers have also been increasing
the seats per aircraft flown although, unlike
that for the regionals, the trend had been accelerating. From 1997-2007, mainline seats
per aircraft expanded just one-half of one
percent but from 2009-2019, the measure
grew 10 percent. In 2020, mainline seats per
aircraft continued to grow but at about half
the previous pace as carriers parked or retired many of their largest aircraft.

15

FAA Aerospace Forecast Fiscal Years 2021–2041
won't be reversed with the end of the pandemic.

percent and LCC RPMs fully 48 percent
higher. These longer term trends were interrupted in 2020 with both enplanements and
RPM dropping across all categories by about
40 percent from 2019. Nevertheless, the
strength of LCCs is expected to continue in
coming years.

Other methods of segmenting passengers
into more discreet cost categories based on
comfort amenities like seat pitch, leg room,
and access to social media and power outlets were unaffected by the pandemic. In
2015, Delta introduced “Basic Economy”
fares that provided customers with a main
cabin experience at lower cost in exchange
for fewer options. In February 2017, American began offering its version, and United
deployed its version of Basic Economy fares
across its domestic network in May 2017.

2020 also saw other trends interrupted. U.S.
commercial air carriers’ total number of domestic departures had risen for the second
year in a row in 2019, and ASM had risen
each of the previous nine years. But then in
2020, departures and ASM declined sharply,
falling almost 30 percent from the prior year.
On the demand side, RPMs and enplanements, which had grown for nine consecutive
years, saw even steeper declines of 40 percent in 2020. The prior trends were a result
of the expanding size of aircraft and higher
load factors. 4 In 2019, the domestic load factor bumped up to 85.2 percent – a new historic high – but then tumbled to 68.7 percent
in 2020 as passengers stopped flying to a
greater extent than carriers could match.

The offering of Basic Economy fares has
been part of an effort by network carriers to
protect market share in response to the rapid
growth low cost carriers (LCC) have
achieved in recent years. In 2019, mainline
enplanements had increased almost 23 percent since 2007, and regionals' had risen 2
percent, low cost carrier enplanements grew
by 39 percent. RPMs over the same period
show a similar pattern with mainline RPMs
up almost 27 percent, regional RPMs up 11

Commercial air carriers encompass both mainline and regional carriers.
4

16

FAA Aerospace Forecast Fiscal Years 2021–2041

90.0

30.0

85.0

15.0

80.0

0.0

75.0

-15.0

70.0

-30.0

65.0

-45.0

60.0

Annual Percent Change

45.0

Load Factor

U.S. Commercial Air Carriers
Domestic Market

Fiscal Year
ASMs

RPMs

Enplanements

Load Factor (right axis)

were much more severe. Subsequent years
through 2041 see carriers continue to expand capacity in international markets faster
than domestic as the domestic market continues to mature.

System (the sum of domestic plus international) capacity contracted 35.9 percent to
791 billion ASMs in 2020 while RPMs plummeted 47.3 percent to 550 billion. During the
same period, system-wide enplanements fell
44.2 percent to 511 million. In prior years,
U.S. carriers had prioritized the domestic
over the international market in terms of allocating capacity as the U.S. saw stronger economic growth than many regions around the
world. And in 2020, travel restrictions associated with COVID-19 caused this split to
continue as domestic capacity was curtailed
less than international: -30.5 percent for domestic compared to -49.5 percent for international. However, as U.S. carriers shift their
focus to recovery, international capacity
growth will outpace domestic, mainly because the international reductions in 2020

U.S. mainline carrier enplanement growth in
the combined domestic and international
market was -44.9 percent in 2020 while regional carriers carried 41.3 percent fewer
passengers.
In the domestic market in 2019, mainline enplanements marked their ninth consecutive
year of increases, a trend that was abruptly
halted in 2020 with a decline of 43.6 percent.
Similarly, mainline passengers in international markets had posted a tenth consecutive year of growth in 2019 and that trend was
broken in 2020 with a 53.4 percent decline.
17

FAA Aerospace Forecast Fiscal Years 2021–2041
recovery that slows as enplanements return
to 2019 levels in 2025. From then through
the end of the forecast in 2041, international
enplanements are expected to grow at an average of 3.3 percent.

Domestic mainline enplanement growth is
forecast to drop further in 2021, falling 4.2
percent before beginning a recovery in 2022
with a 43.3 percent increase. The two subsequent years, 2023 and 2024, also see
strong rates of growth and domestic mainline
enplanements return to 2019 levels in early
2024. With the recovery complete, domestic
enplanements resume growth driven by economic fundamentals and average 2.3 percent over the remainder of the forecast. International mainline enplanements follow a
similar path with strong growth early in the

Although carriers cut capacity, the drop in
traffic was even greater and system load factor fell from 84.5 percent in 2019 to 69.5 in
2020 – a drop that far exceeded those following both 9/11 and the Great Recession. Load
factor gradually recovers, returning to its
2019 level in 2025.

International Market
risks of travel and will likely be less comfortable travelling internationally than domestically. The early years of the recovery will
see some strong growth rates as activity levels come off a low base but these will return
to more typical rates once levels approach
2019 values expected in early 2025. From
FY 2021-2025, average annual growth rates
for ASM and RPM are projected to be just
over 16 percent while enplanements are
forecast to grow at 19 percent. From FY
2025-2041, annual growth for ASM and RPM
is forecast at 3.0 percent while enplanements will grow at a rate of 3.1 percent. Taking these two periods as a whole gives annual growth rates from FY 2021-2041 for
ASM, RPM and enplanements of 6.0, 6.6,
and 6.1 percent, respectively.

Over most of the past decade, the international market has been the growth segment
for U.S. carriers when compared to the mature U.S. domestic market. In 2015 and
2016, growth in the domestic market surged,
outpacing international markets. However,
in 2017 enplanement growth in international
markets exceeded that in domestic markets,
only to be reversed again in 2018 and 2019.
That relative performance continued in 2020
although rather than appearing as stronger
domestic growth, it manifested as a less severe decline: domestic enplanements fell 43
percent in 2020 compared to 53 percent for
international. International travel was particularly impacted by border closings, quarantine requirements and other travel restrictions, as well as the uncertainty of when
requirements might change. The fall off of
business travel also contributed to the decline, even as leisure travel was supporting
domestic markets. International travel is expected to continue to be constrained over the
next two to three years by varying levels of
COVID-19 infections and governmental responses across countries. Individuals will
also be making personal assessments of the

In the long-run, growth of major global economies will slow from the above-trend rates of
recent, pre-pandemic years. Several moderating factors are at work, including dampened credit growth, reduced global trade,
and political stresses. The European and
Japanese economies are generally seeing
slow but positive growth, in part due to weak
trade with Asia. In turn, this has been driven
18

FAA Aerospace Forecast Fiscal Years 2021–2041
but with growth rates that are closer to longterm trends than the higher rates of the recent pre-pandemic years. Nevertheless,
combined with moderate oil prices, this presents a supportive environment for air travel
demand.

Annual Growth Rate (%)

by trade disputes as well as China's continuing gradual slowdown which has been managed by the government and is unlikely to decline sharply. Overall, global conditions appear set to return to a stable path once the
pandemic has been brought under control

60.0

U.S. Carriers - Enplanements

40.0
20.0
0.0
-20.0
-40.0
-60.0

Fiscal Year

Annual Growth Rate (%)

Domestic Market

60.0

International Market

U.S. Carriers - RPMs

40.0
20.0
0.0
-20.0
-40.0
-60.0

Fiscal Year
Domestic Market
19

International Market

FAA Aerospace Forecast Fiscal Years 2021–2041

Annual Growth Rate (%)

U.S. Carriers - ASMs
40.0
30.0
20.0
10.0
0.0
-10.0
-20.0
-30.0
-40.0
-50.0
-60.0

Fiscal Year
Domestic Market

International Market
weak. In 2021, ASM are forecast to grow 2.5
percent. RPM and enplanements, however,
are expected to fall (partly due to the timing
of fiscal 2020, which included five strong
months) by 9.7 and 0.7 percent, respectively.
Load factors have already reflected this tension as they dropped from 82.9 percent in
2019 to 72.3 percent in 2020. They fall further in 2021 to a low of 63.8 percent before
returning gradually close to 2019 levels in
2025.

While 2020 was a very difficult year for carrier management because no amount of
marketing, low fares or other strategizing
could generate the much-needed activity,
2021 will likely be equally challenging. Carriers will be eager to add capacity to capture
revenue as long as that revenue covers the
additional variable costs. Further, the added
capacity will have the competitive purpose of
defending market share. While the locations
and extent of any demand recovery are extremely uncertain, overall activity will be

20

FAA Aerospace Forecast Fiscal Years 2021–2041

Annual Percent Change

60.0

U.S. Commercial Air Carriers
International Market

40.0
20.0
0.0
-20.0
-40.0
-60.0
-80.0
Fiscal Year
ASMs

RPMs

Enplanements

some countries. Enplanements and RPMs
are forecast to increase 16.0 and 20.8 percent, respectively, in 2021, and continue with
double-digit increases in the following three
years. RPM are expected to recover to 2019
levels in early 2026. Over the twenty-year
period 2021-2041, Latin America enplanements are forecast to increase at an average
rate of 6.2 percent a year while RPMs grow
6.5 percent a year.

The impact of COVID-19 on travel by region
has varied somewhat, as will the recovery
paths. Factors affecting the responses by
market are similar to those affecting travel as
a whole: COVID-19 case counts, governmental restrictions, predominant traveler
segments, and macroeconomic conditions.
In 2020, enplanements to Latin America suffered the least compared to the previous
year, followed by the Pacific and Atlantic regions.

The Pacific region is the smallest in terms of
enplanements despite the economic growth
and potential of air travel to the region's
emerging markets. In 2020, U.S. carriers
saw enplanements drop 57.9 percent from
their 2019 levels, as many countries closed
their borders early in the year, especially
China, a very large market in the region.
Meanwhile, traffic (RPMs) tumbled by 58.4
percent. In 2021, enplanements and RPM
are expected to decline further though at
slower rates: -36.0 and -32.2 percent, respectively. Because many countries in the

For U.S. carriers, Latin America remains the
largest international destination with more
than twice the enplanements of Atlantic, the
next largest in a typical year, due to its proximity to the U.S., strong trade ties, and popular visitor destinations. Enplanements in
2020 fell an estimated 48.7 percent while
RPMs fell 48.9 percent. Positive growth is
projected to resume in 2021, supported in
part by leisure traffic to warm weather destinations and by the relatively low number of
COVID-19 cases and travel restrictions in
21

FAA Aerospace Forecast Fiscal Years 2021–2041
accelerated steadily in recent years reaching
7.0 percent growth in 2019. This growth was
supported by U.S. demand as well as growth
of Middle East and African markets, even as
the European economies slowed in 2019. In
2020, like the other regions, Atlantic enplanements tumbled by 61.1 percent and
2021 is projected to see another, smaller decline. Percentage gains in subsequent years
are large, returning enplanements to 2019
levels in early 2025. While Western Europe
is a mature area with moderate economic
growth, the economically smaller Middle
East and Africa areas are expanding rapidly
with GDP growth rates more than twice that
of Europe. As a result, a larger share of the
forecast aviation demand in the Atlantic region is linked to those two areas, particularly
in the second half of the forecast period.
Over the twenty-year period from 2021 to
2041, enplanements and RPM in the Atlantic
region are forecast to grow at an average annual rate of 6.9 percent.

Pacific region have had relative success in
controlling COVID-19 transmission, travel restrictions will be slow to lift, contributing to the
continued travel decline in 2021. Strong increases are projected for the following two
years and RPM returns to 2019 levels in
2025. For the twenty-year period 20212041, Pacific enplanements are forecast to
increase at an average rate of 5.7 percent a
year while RPMs grow 6.3 percent a year.
Although the region is forecast to have the
strongest economic growth of any region
over the next 20 years, led by China and India, enplanements and RPMs over the period are restrained in part because U.S. carriers continue to have a majority of their service in the region to Japan as opposed to
faster growing countries.
With roughly twice the enplanements of the
Pacific region in recent years, the Atlantic region ranks in the middle. After contracting in
2015 and 2016, Atlantic enplanements have

22

FAA Aerospace Forecast Fiscal Years 2021–2041

Total Passengers To/From the U.S.
American and Foreign Flag Carriers
500
450
57

Millions of Passengers

400

50

350

44

300
250
200
150
100
50
0

39
35

32

41

44
89

17

89

7
9
33
17

12
53

2019

2020

2021

Atlantic*

101

86

113

99

61

54

47
118

69

138

160

128

144

160

2033

2037

2041

25
2025
2029
Calendar Year

L. America

Pacific

Canada Transborder

Source: US Customs & Border Protection data processed and released by Department of Commerce; data also
received from Transport Canada
* Per past practice, the Mid-East region and Africa are included in the Atlantic category.

Total passengers (including Foreign Flag
carriers) between the United States and the
rest of the world fell even more in 2020 than
did U.S. carriers alone. Foreign carriers,
without the relative strength of domestic markets for support, were forced to reduce capacity more and thereby sacrificed passenger traffic. Total passengers collapsed by an
estimated 73.4 percent to 67 million in 2020
as all regions posted losses led by an 80.4
percent reduction in the Atlantic region.

growth rates of enplanements on U.S. carriers, total passenger growth rates in the early
years of the forecast are high, returning passenger numbers to 2019 levels in 2025.
Moderate global economic growth averaging
2.9 percent a year over the next 20 years
(2021-2041) is the foundation for the forecast
growth of international passengers of 9.4
percent a year, as levels increase more than
six-and-a-half times from 67 million in 2020
to 446 million in 2041.

FAA projects total international passenger
growth of 58.3 percent in 2021 as global economic growth rebounds. The strongest passenger growth is expected in the Latin region
and the slowest in the Pacific. Similar to

The Atlantic and Latin American regions
were of comparable size in 2019 and both
reach the end of the forecast period again at
similar sizes although the paths differ. Atlantic growth is faster early on and slows relative
to Latin American in later years, consistent
23

FAA Aerospace Forecast Fiscal Years 2021–2041
a relatively slow return to 2019 passenger
levels in 2027. From 2021 to 2041, passengers between the United States and the Pacific region are forecast to grow 9.9 percent
a year.

with GDP forecasts. Over the 20-year forecast period (2021-2041), the Atlantic region
grows at an average annual rate of 11.2 percent while Latin America grows at a rate of
7.7 percent. Although European markets in
the Atlantic region are mature and relatively
slow growing, other markets such as the Middle East and Africa boost overall growth in
the region.

Like the Atlantic region, Canada transborder
is another mature market but is considerably
smaller. It is projected to grow at an average
rate of 10.5 percent over the forecast period,
similar to the Atlantic region. Total passenger counts return to 2019 levels in 2024, the
fastest of the four regions.

In the Pacific region, stringent COVID-19
travel restrictions combined with sluggish
Japanese GDP growth will offset some of the
strong economic growth and rising incomes
in China, India and South Korea, resulting in

Cargo
Total RTMs flown by the all-cargo carriers increased 12.2 percent in 2020 while total
RTMs flown by passenger carriers fell by
37.8 percent. Although many passenger carriers reconfigured aircraft to accommodate
more cargo, the sheer drop in passenger
flights outweighed that increase, resulting in
the steep drop of passenger carrier RTM. As
passenger flights return, the share of cargo
on passenger carriers will increase, rising
from 12 percent in 2020 to about 19 percent
in 2024.

Air cargo traffic includes both domestic and
international freight/express and mail. The
demand for air cargo is a derived demand resulting from economic activity. Cargo moves
in the bellies of passenger aircraft and in
dedicated all-cargo aircraft on both scheduled and nonscheduled service. Cargo carriers face price competition from alternative
shipping modes such as trucks, container
ships, and rail cars, as well as from other air
carriers.
U.S. air carriers flew 43.9 billion revenue ton
miles (RTMs) in 2020, up 2.3 percent from
2019 with domestic cargo RTMs increasing
9.6 percent to 17.8 billion while international
RTMs contracted 2.1 percent to 26.1 billion.
In the prior year (2019) domestic RTM increased just 2.8 percent and international
declined 1.3 percent. The surge in 2020 domestic RTM was supported by consumers
purchasing goods to enhance time spent at
home as necessitated by the pandemic. Air
cargo RTMs flown by all-cargo carriers comprised 88.0 percent of total RTMs in 2020,
with passenger carriers flying the remainder.

U.S. carrier international air cargo traffic
spans four regions consisting of Atlantic,
Latin, Pacific, and ‘Other International.’
Historically, air cargo activity tracks with
GDP. Other factors that affect air cargo
growth are fuel price volatility, movement of
real yields, globalization and trade.
The forecasts of revenue ton miles rely on
several assumptions specific to the cargo industry. First, security restrictions on air
cargo transportation will remain in place.
24

FAA Aerospace Forecast Fiscal Years 2021–2041
Second, most of the shift from air to ground
transportation has occurred. Finally, longterm cargo activity depends heavily on economic growth.

passenger flights return to the system. In the
long-term, the all-cargo share rises only
slightly to 92.1 percent by 2041 based on increases in capacity for all-cargo carriers.

The forecasts of RTMs derive from models
that link cargo activity to GDP. Forecasts of
domestic cargo RTMs use real U.S. GDP as
the primary driver of activity. Projections of
international cargo RTMs depend on growth
in world and regional GDP, adjusted for inflation. FAA forecasts the distribution of RTMs
between passenger and all-cargo carriers
based on an analysis of historic trends in
shares, changes in industry structure, and
market assumptions.

International cargo RTMs fell 2.1 percent in
2020 after posting a 1.3 percent decline in
2019. As with domestic markets, RTM carried by all-cargo carriers grew strongly in
2020 while that transported by passenger
carriers fell even more sharply: 11.6 percent
compared to -40.8 percent. With the postpandemic return of passenger flights, RTM
on passenger aircraft is expected to grow
rapidly, increasing about 19 percent per year
from 2021 to 2024. Over the same period,
all-cargo RTM grows at about 2 percent per
year as passenger carriers capture much of
the overall growth. Following that period of
recovery, growth for both types of carriers returns to long-run trend rates. For the forecast
period (2021-2041), international cargo
RTMs are expected to increase an average
of 3.8 percent a year based on projected
growth in world GDP with the Pacific International region having the fastest RTM growth
(4.3 percent), followed by Other (4.1 percent), Atlantic (3.2 percent), and Latin America region (3.1 percent).

After increasing by 2.3 percent in 2020, total
RTMs are expected to grow 5.5 percent in
2021, primarily due to strong increases in
passenger carrier RTM growth. Because of
steady U.S. and world economic growth in
the long term, FAA projects total RTMs to increase at an average annual rate of 3.0 percent over the forecast period (from 2021 to
2041).
Following a 9.6 percent surge in 2020, domestic cargo RTMs are projected to moderate in subsequent years as the boost from
the pandemic fades. Between 2021 and
2041, domestic cargo RTMs are forecast to
increase at an average annual rate of 1.6
percent. In 2020, all-cargo carriers carried
93.4 percent of domestic cargo RTMs. The
all-cargo share is forecast to decline modestly to 91.1 percent in the medium-term as

The share of international cargo RTMs flown
by all-cargo carriers was 84.2 percent in
2020 and is forecast to decline steadily during the recovery period before gradually increasing in line with historical trends and
ending at 78.4 percent in 2041.

25

FAA Aerospace Forecast Fiscal Years 2021–2041

General Aviation
2018), as increases in fixed wing turbine, rotorcraft, lighter-than-air and light sport aircraft (LSA) were offset by decreases in the
fixed wing piston, experimental aircraft and
gliders. Total hours flown were estimated to
be 25.6 million, up 0.2 percent from 2018. Increases in fixed wing piston aircraft, rotorcraft, LSA, experimental and lighter-thanair aircraft hours offset declines in fixed wing
turbine aircraft and glider hours.

The FAA uses estimates of fleet size, hours
flown, and utilization rates from the General
Aviation and Part 135 Activity Survey (GA
Survey) as baseline figures to forecast the
GA fleet and activity. Since the survey is
conducted on a calendar year (CY) base and
the records are collected by CY, the GA forecast is done by CY. Forecasts of new aircraft
deliveries, which use the data from General
Aviation Manufacturers Association (GAMA),
together with assumptions of retirement
rates, generate growth rates of the fleet by
aircraft categories, which are applied to the
GA Survey fleet estimates. The forecasts
are carried out for “active aircraft,” 5 not total
aircraft. The FAA’s general aviation forecasts
also rely on discussions with the industry experts conducted at industry meetings, including Transportation Research Board (TRB)
meetings of Business Aviation and Civil Helicopter Subcommittees conducted twice a year
in January and June.

In 2020, deliveries of the general aviation aircraft manufactured in the U.S. decreased to
1,552, 12.4 percent lower than in CY 2019.
Deliveries of single-engine piston aircraft
were up 3.2 percent, while the much smaller
segment of multi-engine piston deliveries
were down by 46.6 percent (summing to a
0.1 percent decline in the fixed engine piston
deliveries). Business jet deliveries declined
by 29.8 percent and turboprop deliveries
were down by 17.7 percent, amounting for a
24.5 percent decrease in fixed wing turbine
shipments. While the GAMA statistics for factory net billings were not available yet for the
U.S. manufactured GA aircraft, global billings
decreased in 2020 by 14.8 percent to $20 billion, nearly the same level as in 2018.

The results of the 2019 GA Survey, the latest
available, were consistent with the results of
surveys conducted since 2004 improvements to the survey methodology. The active GA fleet was estimated to be 210,981
aircraft in 2019 (0.4 percent decline from

An active aircraft is one that flies at least one
hour during the year.
5

26

FAA Aerospace Forecast Fiscal Years 2021–2041

General Aviation
U.S. Manufactured Aircraft Shipments and Billings

Shipments
3,000

$30

2,500

$25

2,000

$20

1,500

$15

1,000

$10

500
Source: GAMA

$5

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

$0

Calendar Year

Global Shipments

Shipments of U.S. Manufactured Aircraft

U.S. Billings ($ Billion)

Global Billings ($ Billion)

2020 to 208,790 aircraft by 2041 (a small increase of 0.1 percent annually). When measured from pre-COVID-19 levels in 2019, the
active GA fleet of 210,981 remains statistically flat, or experiences an annual decline of
0.05 percent on average.

GAMA also reported the rotorcraft deliveries
declined at a global level in 2020 in both piston and turbine segments by 20.7 percent
and 16.9 percent, respectfully.
Against these current conditions, we expect
the GA sector, which was not as severely affected by the pandemic as the airlines, to recover sooner to its 2019 levels by aircraft
type than the other sectors. Then, the longterm outlook for general aviation, driven by
turbine aircraft activity, remains stable. The
active general aviation fleet, which showed a
decline of 2.8 percent between 2019 and
2020, is projected to slightly increase from its
current level, as the increases in the turbine,
experimental, and light sport fleets remain
just above the declines in the fixed-wing piston fleet. The total active general aviation
fleet changes from an estimated 204,980 in

The more expensive and sophisticated turbine-powered fleet (including rotorcraft) is
projected to grow by 12,990 aircraft between
2020 and 2041 to total 45,530 in 2041, an
average rate of 1.6 percent a year during this
period, with the turbojet fleet increasing 2.3
percent a year. When measured from the
2019 levels, the growth rate for the turbinepowered fleet is also 1.6 percent. The
growth in U.S. GDP and corporate profits are
catalysts for the growth in the turbine fleet.
The largest segment of the fleet, fixed wing
piston aircraft, is predicted to shrink over the
27

FAA Aerospace Forecast Fiscal Years 2021–2041
pace with retirements of the aging fleet are
the drivers of the decline.

forecast period by 23,410 aircraft (an average annual rate of -0.9 percent – whether it
is measured from the fleet of 141,396 in 2019
or 140,315 in 2020, by the time it reaches to
116,905 in 2041). Unfavorable pilot demographics, overall increasing cost of aircraft ownership, availability of much lower
cost alternatives for recreational usage, coupled with new aircraft deliveries not keeping

On the other hand, the smallest category,
light-sport-aircraft (created in 2005), is forecast to grow by 4.5 percent annually, adding
about 3,270 new aircraft by 2041, doubling
its 2019 fleet size of 2,675.

Active General Aviation Aircraft
250,000
200,000
150,000
100,000
50,000
0

2010

2021

2031

2041

Calendar Year
Fixed Wing Piston
Rotorcraft
Experimental and Other

Fixed Wing Turbine
LSA

Countering this trend, hours flown by turbine
aircraft (including rotorcraft) are forecast to
increase 2.2 percent yearly between 2019
and 2041. Jet aircraft are expected to account for most of the increase, with hours
flown increasing at an average annual rate of
3.1 percent over the forecast period. The
large increases in jet hours result mainly from
the increasing size of the business jet fleet.

Although the total active general aviation
fleet is projected to marginally decline, the
number of general aviation hours flown is
forecast to increase an average of 0.6 percent per year through 2041, from 25.6 million
in 2019 to 29.4 million, as the newer aircraft
fly more hours each year. Fixed wing piston
hours are forecast to decrease by 0.9 percent, the same rate as the fleet decline.

28

FAA Aerospace Forecast Fiscal Years 2021–2041

35,000

General Aviation Hours Flown
(in thousands)

30,000
25,000
20,000
15,000
10,000
5,000
0

2010

2021

2031

2041

Calendar Year
Fixed Wing Piston
Rotorcraft
Experimental and Other

Fixed Wing Turbine
LSA

growth in the fleet.

Rotorcraft activity, which was not as heavily
impacted by the pandemic conditions as
most of the other aircraft categories, faces
the challenges brought by lower oil prices, a
continuing trend. The low oil prices impacted
utilization rates and new aircraft orders both
directly through decreasing activity in oil exploration, and also through a slowdown in related economic activity. Their active fleet is
projected to grow at a slower rate than the
previous year’s forecast, more so for the piston segment, to reach from a total of (piston
and turbine together) 10,198 in 2019 to
13,390 in 2041. Rotorcraft hours are projected to grow by 1.7 percent annually over
the forecast period.

The FAA also conducts a forecast of pilots by
certification categories, using the data compiled by the Administration’s Mike Monroney
Aeronautical Center. There were 691,691
active pilots certificated by FAA at the end of
2020. The number of certificates in some pilot categories continued to increase, while
there were different rates of declines in the
rotorcraft only, ATP, private, and recreational
certificates. The FAA has suspended the student pilot forecast for the forth-consecutive
year. The number of student pilot certificates
has been affected by a regulatory change
that went into effect in April 2016 and removed the expiration date on the new student pilot certificates. The number of student
pilots jumped from 128,501 at the end of
2016 to 149,121 by the end of 2017, and to

Lastly, the light sport aircraft category is forecasted to see an increase of 4.0 percent a
year in hours flown, primarily driven by
29

FAA Aerospace Forecast Fiscal Years 2021–2041
ATPs employed by the airlines, despite government support to the aviation sector. Consequently, the number of pilots holding an
ATP certificate slightly declined in 2020 for
the first time since 2011 to 164,193 (still
higher than the 2018 level).

222,629 at the end of 2020. The 2016 rule
change generates a cumulative increase in
the certificate numbers and breaks the link
between student pilot and advanced certificate levels of private pilot or higher. There is
no sufficient data yet to perform a reliable
forecast for the student pilots.

Private pilots experienced a slight decrease
in 2020 as well, from 161,105 in 2019 to
160,860. Sport pilot certificates, created in
2005, kept their steady increase since their
inception to reach 6,643 by December 31,
2020. Rotorcraft pilots continued their decline since 2016 to end up with 13,629 by the
end of 2020.

Commercial and air transport pilot (ATP) certificates have been impacted by a legislative
change as well. The Airline Safety and Federal Aviation Administration Extension Act of
2010 mandated that all part 121 (scheduled
airline) flight crew members would hold an
ATP certificate by August 2013. Airline pilots
holding a commercial pilot certificate and
mostly serving at Second in Command positions at the regional airlines could no longer
operate with only a commercial pilot certificate after that date, and the FAA data initially
showed a faster decline in commercial pilot
numbers, accompanied by a higher rate of
increase in ATP certificates. The number of
both commercial pilot and ATP certificates
had increased until 2012 for three years.
Commercial pilot certificate holders continued to increase in 2020 to 103,879. Significantly reduced number of flights and a large
number of parked aircraft due to the pandemic generated an overcapacity for the

The number of active general aviation pilots
(excluding students and ATPs) is projected
to decrease about 2,650 (down 0.04 percent
yearly) between 2020 and 2041. The ATP
category is forecast to increase by 27,400
(up 0.7 percent annually). The much smaller
category of sport pilots are predicted to increase by 2.7 percent annually over the forecast period. On the other hand, both private
and commercial pilot certificates are projected to decrease at an average annual rate
of 0.42 and 0.06 percent, respectively until
2041.

30

FAA Aerospace Forecast Fiscal Years 2021–2041

600,000

Active Pilots by Type of Certificate

500,000
400,000
300,000
200,000
100,000
0

2010

2020

2031

2041

Calendar Year
Sport Pilot
Commercial Pilot
Rotorcraft only

Private Pilot
Airline Transport Pilot

31

FAA Aerospace Forecast Fiscal Years 2021–2041

FAA Operations
The traffic at FAA facilities underwent drastic
changes from 2019 to 2020 due to COVID19. Activities declined about 17 percent from
53.3 million in 2019 to 44.4 million in 2020.
The recovery from the pandemic will drive
the near term growth. Consequently, elevated growth is predicted to last until around
2025 and 2026. After the predicted operations reach the pre-pandemic level, the
longer term economic health along with the
growth in air travel demand and the business
aviation fleet will drive the long term growth
in operations at FAA facilities over the rest of
the forecast period. The forecast annual
growth rates during the period of 2021 to
2041 will be significantly greater than what
was predicted last year as a result of robust
growth in the near term from the pent-up demand. Activity at FAA and contract towers is
forecast to increase at an average rate of 1.9
percent a year through 2041 from 44.4 million in 2021 to close to 64.2 million in 2041.
Commercial operations 6 at these facilities

are forecast to increase 3.4 percent a year,
approximately five times faster than noncommercial operations. The growth in commercial operations is less than the growth in
U.S. airline passengers (3.4 percent versus
5.6 percent) over the forecast period due primarily to larger aircraft (seats per aircraft
mile) and higher load factors. Both of these
trends allow U.S. airlines to accommodate
more passengers without increasing the
number of flights. General aviation operations (which accounted for 56 percent of operations in 2020) are forecast to increase an
average of 0.75 percent a year as increases
in turbine powered activity more than offset
declines in piston activity.

6
Sum of air carrier and commuter/air taxi categories.
7
A large hub is defined to have 1 percent or more
of total U.S. revenue passenger enplanements in
FY 2019. A medium hub is defined to have at

least 0.25 percent but less than 1 percent of total
U.S. revenue passenger enplanements. In the
2020 TAF there were 30 large hub airports and
32 medium hub airports.

The growth in operations at towered airports
is not uniform. Most of the activity at large
and medium hubs 7 is commercial in nature,
given that these are the airports where most
of the passengers, about 88 percent in 2020,
in the system fly to.

32

FAA Aerospace Forecast Fiscal Years 2021–2041

FAA & Contract Tower Operations
70,000

Operations (000)

60,000
50,000
40,000
30,000
20,000
10,000
0

2011

2021

2031

2041

Fiscal Year
Commercial

Non Commercial

Given the growth in airline demand and most
of that demand is at large and medium hubs,
activity at the large and medium hubs is forecast to grow substantially faster than small
towered airports including small FAA towers 8
and FAA contract towers 9. The forecasted
annual growth is 3.9 percent at large hubs, 3
percent at medium hubs, 1 percent at small
FAA towers, and 0.8 percent at FAA contract
towers between 2021 and 2041.

Large cities have historically shown to generate robust economic activity, which in turn
drives up the airline demand. On the other
hand, the airports forecast to have slower annual growth tend to be located in the middle
of the country.
FAA Tracon (Terminal Radar Approach Control) Operations 10 are forecast to grow
slightly faster than at towered facilities. This
is in part a reflection of the different mix of
activity at Tracons. Tracon operations are
forecast to increase an average of 2.5 percent a year between 2021 and 2041. Commercial operations accounted for approximately 54 percent of Tracon operations in

Among the 30 large hubs, the airports with
the fastest annual growth forecast are those
located along the coastal sections of the
country where most large cities are located.

Small FAA towers are defined as towered airports that are neither large or medium hubs nor
FAA contract towers.
9
FAA contract towers are air traffic control towers
providing air traffic control services under contract with FAA, staffed by contracted air traffic
control specialists.

Tracon operations consist of itinerant Instrument Flight Rules (IFR) and Visual Flight Rules
(VFR) arrivals and departures at all airports in the
domain of the Tracon as well as IFR and VFR
overflights.

8

10

33

FAA Aerospace Forecast Fiscal Years 2021–2041
percent a year from 2021 to 2041, with commercial activity growing at the rate of 4 percent annually. Activity at En-Route centers
is forecast to grow faster than activity at towered airports and FAA Tracons because
more of the activity at En-Route centers is
from the faster growing commercial sector
and high-end (mainly turbine) general aviation flying. 11 In 2020, the share of commercial IFR aircraft handled at FAA En-Route
centers is about 80 percent, which is greater
than the 54 percent share at Tracons or the
39 percent share at FAA and Contract Towers.

2020 and are projected to grow 3.4 percent
a year over the forecast period. General aviation activity at these facilities is projected to
grow only 0.96 percent a year over the forecast.
The number of IFR aircraft handled is the
measure of FAA En-Route Center activity.
Growth in airline traffic and business aviation
is expected to lead to increases in activity at
En-Route centers. Over the forecast period,
aircraft handled at En-Route centers are
forecast to increase at an average rate of 3.4

Much of the general aviation activity at towered airports, which is growing more slowly, is
local in nature, and does not impact the centers.
11

34

FAA Aerospace Forecast Fiscal Years 2021–2041

U.S. Commercial Aircraft Fleet
The regional carrier fleet is forecast to increase slightly from 1,853 aircraft in 2020 to
1,944 in 2041 as the fleet expands by 0.2
percent a year (4 aircraft) between 2020 and
2041. Carriers remove 50 seat regional jets
and retire older small turboprop and piston
aircraft, while adding 70-90 seat jets, especially the E-2 family after 2021. By 2031 only
a handful of 50 seat regional jets remain in
the fleet. By 2041, the number of jets in the
regional carrier fleet totals 1,838, up from
1,434 in 2020. The turboprop/piston fleet is
forecast to shrink by 75% from 419 in 2020
to 106 by 2041. These aircraft account for
just 5.5 percent of the fleet in 2041, down
from 22.6 percent in 2020.

After shrinking by 22.9% in 2020 (1,746 aircraft), the number of aircraft in the U.S. commercial fleet is forecast to increase from
5,882 in 2020 to 8,756 in 2041, an average
annual growth rate of 2 percent a year. Increased demand for air travel and growth in
air cargo is expected to fuel increases in both
the passenger and cargo fleets.
Between 2020 and 2041 the number of jets
in the U.S. mainline carrier fleet is forecast to
grow from 3,181 to 5,101, a net average of
30 aircraft a year as carriers continue to remove older, less fuel efficient narrow body
aircraft. The narrow-body fleet (including Eseries aircraft as well as A220-series at JetBlue and A220-series at Delta) is projected
to grow 73 aircraft a year as carriers replace
the 757 fleet and current technology 737 and
A320 family aircraft with the next generation
MAX and Neo families. The wide-body fleet
grows by an average of 20 aircraft a year as
carriers add 777-8/9, 787’s, A350’s to the
fleet while retiring 767-300 and 777-200 aircraft. In total the U.S. passenger carrier
wide-body fleet increases by 1.1 percent a
year over the forecast period.

The cargo carrier large jet aircraft fleet is
forecast to increase from 848 aircraft in 2020
to 1,711 aircraft in 2041 driven by the growth
in freight RTMs. The narrow-body cargo jet
fleet is projected to increase by 15 aircraft a
year as 737-800/900MAX’s are converted
from passenger use to cargo service. The
wide body cargo fleet is forecast to increase
26 aircraft a year as new 777-8/10 and converted 767-300 aircraft are added to the fleet,
replacing older MD-11, A300/310, and 767200 freighters.

35

FAA Aerospace Forecast Fiscal Years 2021–2041

U.S. Carrier Fleet
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

2010

2020
2030
Calendar Year

Mainline NB

Mainline WB

Cargo Jet

Regionals

36

2041