Thought Leadership
Jeffrey Lam shares insights on the trends shaping global aviation as the industry navigates growth and challenges.
December 2025
Growth opportunities continue to abound in the global aviation industry, driven by rising passenger and cargo demand and the steady expansion of fleets worldwide. Yet these tailwinds are tempered by challenges such as persistent supply chain disruptions, geopolitical uncertainties and evolving trade dynamics — reminders that the environment we operate in is anything but static. To navigate this dynamic landscape, agility and foresight are key.
The following trends – some of which have been accelerating in impact – warrant attention for the way they are defining priorities across the aviation ecosystem, which call for continued adaptability and strategic focus to stay ahead in a changing environment.
Across the aviation sector, airlines continue to pursue fleet modernisation as a strategic priority. Many are retiring older, less efficient aircraft and placing record orders for new-generation narrowbody jets such as the A320neo and Boeing 737 MAX. These aircraft offer fuel savings, reduced emissions and lower maintenance costs.
According to management consulting firm Oliver Wyman, commercial airlines’ fleets are expected to expand significantly with a compound annual growth (CAGR) rate of 2.8% over the next decade from just over 29,000 aircraft worldwide in 2025 to 38,300 by the start of 2035.
At the same time, persistent delays in new aircraft deliveries — driven by ongoing supply chain disruptions, shortages of skilled labour, and slower-than-expected production ramp-ups by major OEMs — have pushed operators to extend the lifespan of their existing fleets.To bridge the capacity gap, airlines are relying on MRO partners to keep older aircraft flying and also turning more to leasing solutions. Research by Global Market Insights shows that the global aircraft leasing market is projected to grow at a CAGR of 11.8% from US$207.1 billion in 2025 to US$354.5 billion by 2030, and US$565.1 billion by 2034.
Digital transformation is reaching deeper into the manufacturing and MRO shopfloor. Smart technologies such as automation, AI, and predictive analytics are streamlining production and maintenance processes. In MRO, from digital tracking systems that enhance visibility to data-driven preventive maintenance that minimises downtime, operators and solution providers alike are increasingly harnessing innovation to achieve higher efficiency, reliability and safety standards.
A McKinsey & Company survey found that MRO organisations that have embraced digital have seen clear advantages across the value chain. Fifty percent of the respondents have experienced revenue improvements of more than 5% and an improvement of more than 10% in engineering productivity.
Decarbonising aviation has become a shared global imperative. Regulators, original equipment manufacturers (OEMs), financiers, airlines and even passengers are increasingly focused on reducing carbon emissions and driving sustainable operations. An example is the commitment by International Air Transport Association (IATA) member airlines to achieve net-zero carbon emissions from their operations by 2050.
As airlines balance growth with sustainability goals and supply chain pressures, ST Engineering’s Commercial Aerospace business is aligning its strategy with a focus on operational excellence, innovation and strategic investments to help partners operate their expanding fleets safely and efficiently.
Our MRO services are evolving to meet dynamic market needs, as we invest in capabilities and capacity for new-generation aircraft and engines while optimising support for ageing fleets. In addition, our integrated leasing and maintenance solutions provide operators with flexibility when they face delivery delays.
We strive to apply technology and new ways to do things across our shopfloors, operations and business functions. Additive manufacturing has been used to produce parts on demand and improve inventory management. AI and robotics are transforming how we work—from AI-enabled diagnostics to data-driven maintenance planning, our smart facilities enhance quality, efficiency and safety at every step.
Sustainability is also a key consideration in all we do, with our manufacturing and MRO facilities increasingly using renewable energy. Across our global network, we have brought our carbon footprint down by a third since 2015 through various efforts such as installing solar panels at our facilities to harness solar power. We continue to augment these efforts with solutions such as eco-friendly engine washes and lightweight composite aerostructures as well as other innovations that help reduce emissions and extend asset lifecycles.
As aviation continues to evolve — shaped by a mix of enduring shifts and situational challenges — the industry must keep advancing toward a smarter, greener and more resilient future for flight. This calls for a collective focus on technology adoption, operational efficiency and sustainable practices that can withstand changing market cycles. At ST Engineering’s Commercial Aerospace business, we share this commitment, driven by a workforce that continually seeks new ways to innovate, adapt and improve.
ST Engineering’s Commercial Aerospace business keeps the world flying safely, leveraging over 50 years of proven expertise in aviation solutions and highly skilled engineers and technicians across facilities in Asia Pacific, the U.S., and Europe. Our comprehensive aviation lifecycle solutions cover design and engineering, original equipment manufacturing, airframe, component and engine maintenance services, as well as asset management and leasing.
Jeffrey Lam,
Group Chief Operating Officer (Operations Excellence) and
President of Commercial Aerospace
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