How the narrowbody aircraft market will develop: an overview
After the boom of 2020-2021, the global aviation sector is experiencing a downturn. Analysts cite falling demand and rising raw material costs as the main reasons for the slowdown. There is also pressure on the narrowbody market, where there is overcapacity.
IBA’s Mike Yeomans expects freight demand growth to fall to 5% in 2025. In the last period, the figure was 11%. Capacity utilisation will fall slightly to 45%.
At the same time, analysts point to the risks to the market posed by the US administration’s policies. The sector is under pressure from US tariffs on Chinese products. In addition, the White House is reviewing government support for the industry, which will also have a negative impact on the process. All of this is exacerbated by an oversupply of narrowbody aircraft.
Narrowbody conversion trends
The surge in demand for air travel during the pandemic led operators to expand their fleets. Over the years, however, the market has stabilised and the need for this level of service has diminished. As a result, the market is faced with a large amount of under-utilised capacity. According to IBA, the situation in the sector is as follows:
- In 2023, more than 120 narrowbody aircraft were converted into freighters. In 2024, this figure dropped to 70 units.
- Boeing 737-800 conversions last year decreased to the level of 2021. Analysts expect a similar trend to continue in 2025.
- The Boeing Gatwick line at London’s Gatwick Airport has closed.
- Airbus A321-200 conversions are also falling, with some aircraft being returned to lessors. However, the company is faring slightly better than Boeing.
Experts do not expect the market to change significantly in the coming years. Despite difficulties with the availability of raw materials, the sector will remain stable. Lease rates for narrowbody aircraft will continue to decline. Aircraft conversions will be at their lowest level since 2020.
Situation in the widebody aircraft market
The widebody segment also continues to face a shortage of raw materials for the production of Boeing 767-300ER models. They remain the most in-demand aircraft in their class.
In 2024, the volume of converted widebodies fell to 20 units. In 2023 the figure was around 45 units.
At the same time, Airbus A330-300 conversions have increased and this trend is expected to continue in the near future. However, the overall market is showing a decline in conversions. Analysts predict that in 2025 it will be at its lowest level since 2021, returning to pre-recession levels.
