by The domestic aviation market includes commercial aircraft that provide scheduled air transportation services within the borders of a single country. While commercial airlines play the biggest role in the domestic aviation market, general aviation operators including business jets also contribute to the overall size of this sector. With rising incomes and expanding middle class populations across emerging economies, demand for air travel within national borders has grown rapidly in recent years. Countries such as China, India and Brazil have witnessed exponential growth in domestic airline passengers as more people are able to fly for business and leisure purposes than ever before. Low cost carriers have further fueled this growth by offering affordable tickets.
The global domestic aviation market size is estimated to be valued at US$12.55 billion in 2024 and is expected to exhibit a CAGR of 33% over the forecast period 2024-2031, as highlighted in a new report published by Coherent Market Insights. This high growth can be attributed to strong pent-up demand after pandemic related restrictions are fully lifted. Countries across Asia Pacific and Latin America are projected to spearhead the rise in domestic air travel given their robust economic development and expanding middle class populations. Both commercial airlines and business jet operators stand to benefit from this positive demand trend.
Market Key Trends
The growing preference for low-cost carriers (LCCs) like Ryanair and Southwest Airlines has emerged as a major trend driving the domestic aviation sector. By offering no-frills services at much lower ticket prices than legacy airlines, LCCs have made flying accessible to broader consumer base. They have revolutionized short-haul air travel with their affordable fares. According to analysis, LCCs now account for over 30% of total domestic passenger journeys in major aviation markets like US, China and India. This rapid rise of the low-cost business model is expected to remain a defining influence shaping demand for domestic air services worldwide.
Porter’s Analysis
Threat of new entrants: Low cost airlines have been able to operate at lower costs and gain market share by offering cheaper tickets. However, setting up a new airline requires heavy investments in aircraft, infrastructure, crew training etc which acts as a barrier.
Bargaining power of buyers: Buyers have high bargaining power as there are many domestic airlines competing for passengers in the market. Buyers can easily compare ticket prices and opt for cheaper options.
Bargaining power of suppliers: Aircraft manufacturers and leasing companies have some bargaining power as airlines depend on them for aircraft, parts, maintenance etc. However, presence of multiple suppliers mitigates this power.
Threat of new substitutes: Other modes of transport like trains, buses, cabs etc pose potential threat. However, air travel allows time savings for long distance travel within a country.
Competitive rivalry: Intense competition exists among existing full service carriers and low cost carriers. Carriers compete on pricing, loyalty programs, on-time performance, route networks to attract passengers.
Key Takeaways
The global domestic aviation market is expected to witness high growth over the forecast period driven by rising incomes, expanding airport infrastructure and low cost airlines. The market size for 2024 is projected at US$ 12.55 Bn growing at a CAGR of 33% until 2031.
Regional analysis: Asia Pacific region currently dominates the market owing to large populations and growing economies in countries like India and China. Governments are expanding aviation networks which is fueling demand. North America is another major market led by established air networks in countries like US. Europe is also a prominent market led byDemand is also expected to increase sharply in Middle East and Latin America regions.
Key players: Key players operating in the domestic aviation market are IBM Corporation, Oracle Corporation, Xerox Corporation, Nintex Limited, Source Code Technology Holdings Inc, Software AG, Appian, Pegasystems, Bizagi, Newgen Software Technology, and Zoho. Major players are focusing on improving service quality, expanding route networks and fleets to cater to rising passenger traffic. Strategic partnerships with other players is another trend to enhance offerings and networks.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
