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Global Market Forecast
Flying ondemand2014 2033
Global M
arket Forecast 2014 2033
004Global Market ForecastGlobal Market Forecast003
2014, MARKED THE CENTENARY OF COMMERCIAL FLIGHT OPERATIONS, with the first scheduled flight taking off in January 1914. This airboat service carried passengers, one-by-one, between St Petersburg and Tampa in Florida. It took 23 minutes and cost five dollars one way, the equivalent of $116 in 2014 dollars. The same journey took two hours by boat, 4-12 hours by train or up to 20 hours by road. The economic benefits of air transport were clear. Thomas Benoist, the builder of the airboats, said, «Someday, people will be crossing oceans on airliners like they do on steamships today.» As a twenty-year forecast it was not far off the mark! Today, the global airline industry performs around 32 million commercial flights a year, transporting 3 billion passengers and 50 million tonnes of freight. Tampa International Airport handled 17 million passengers in 2013, an incredible evolution in the relatively short time since this first commercial air service. New, emerging markets continue to drive impressive growth, their airlines cutting journey times massively for millions of new travelers.
In the year that has passed since our last forecast, aviation has continued to deliver growth and prosperity both locally and globally. ATAG (the Air Transport Action Group) recently assessed the industry’s global economic impact at $2.4 trillion annually, providing employment for nearly 60 million people. Affordable air transport is not purely a consequence of economic growth but is one of its great enablers.
The benefits are also clear for millions of passengers flying every day, with aviation playing a key role in lives which are increasingly driven by a global society. In our forecast we take the very latest economic and market data and apply a forecasting methodology developed and refined over decades to give us an insight into future developments. We challenge our analysts to consider how factors such as demographics, trade and tourism flows, oil price, environmental issues and competition will define our future industry and in turn this helps us define our forecast.
We chose the title “Flying on Demand” for this year’s Global Market Forecast to reflect the fact that for an increasing number of people, flying is no longer a dream but an expectation. An expectation of the availability of air transport, an expectation of a satisfying passenger experience and an expectation of what constitutes value for money. New and evolving technologies continue to make travel simpler, from the booking process to the airport experience and of course, on the aircraft itself. In mature markets flying is now taken for granted, which is not the case for forecasters and planners helping to ensure that air transport can continue to fulfil its potential.
We hope that you find the 2014 Global Market Forecast informative and useful. We seek to improve our analyses continually, and your questions, challenges and suggestions help us in that aim. Don’t forget you can download our App in several formats from tablet to smartphone. It complements the forecast and includes more interactive information than ever before.
As usual this is best read on a long flight. Enjoy !
Introduction
006Global Market ForecastGlobal Market Forecast005
05
06
07
P.053
P.083
P.89
Asia-Pacific P.054 Europe P.058
North America P.062 Middle East P.066
Latin America & Caribbean P.070 CIS P.074
Africa P.078
Demand by region
Demand for freighters
Summary& methodology
01 P.007
Executive summary
02 P.015
Demand for air travel
03 P.029
Traffic forecast
04 P.041
Demand forpassenger aircraft
Executivesummary
01
009Global Market Forecast Global Market Forecast008
ICAO total traf�c Airbus GMF 2014
1973
1978
1983
1988
1993
1998
2008
2013
2018
2023
2028
2033
Air traf�c will doublein the next 15 years
Air traf�c has doubledevery 15 years
World annual RPK* (trillion)
16
14
12
10
8
6
4
2
0
* Revenue Passenger Kilometres
TRAFFIC WILL DOUBLE IN THE NEXT 15 YEARSSource: ICAO, Airbus GMF 2014
Passenger traffic growth next 20 years
4.7% CAGR*
Freight traffic growth 4.5% CAGR
Passenger fleet
201416,855
203334,818 +17,963
Passenger deliveries (>100 seats)
New freighters
Passenger & new freighter deliveries
2014-203330,555
2014-2033803
2014-203331,358
Freighter fleet
20141,605
20332,645 +1,040
5.2%
2013-2023
4.2%
2023-2033
4.7%
2013-2033
New aircraft31,358
+3.8%per annum
Beginning 2014
Growth
Passenger aircraft ≥100 seats, Freighter aircraft ≥10 tonnes
2033
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
18,460
37,463
19,003
12,355
6,105
Replaced
Stay in service& converted
Passenger and freighter aircraft
011Global Market Forecast Global Market Forecast010
20-year new deliveries of passenger and freighter aircraft
0
4,000
8,000
12,000
16,000
20,000
24,000
Single-aisle Small twin-aisle
Intermediatetwin-aisle
Very LargeAircraft
70% 16% 9% % units
45% 26% 18%
5%
11% % value
Passenger aircraft (≥ 100 seats) and jet freight aircraft (>10 tons)
SINGLE-AISLE: 70% OF UNITS; WIDE-BODIES: 55% OF VALUESource: Airbus
DEMAND FOR OVER 31,350 NEW AIRCRAFTSource: Airbus
Traffic>
double
Pax fleet>
double
Demandfor 31,358New pax& freightaircraft
Valueof demand$4.6 trillion
2014 - 2033NEW DELIVERIES
31,358
013Global Market Forecast
2014-2023 2024-2033 2014-2033 Share of 2014-2033 new deliveries
Africa 459 514 973 3%
Asia/Pacific 5,107 7,146 12,253 39%
CIS 620 598 1,218 4%
Europe 3,135 3,032 6,167 20%
Latin America 1,011 1,252 2,263 7%
Middle East 1,039 1,109 2,148 7%
North America 2,816 2,717 5,533 18%
Freighters 452 351 803 2%
World 14,639 16,719 31,358 100%
NEW AIRCRAFT DEMAND PASSENGER AND FREIGHTER
Asia/Pacific Alone to take
39% deliveries
N.America/Europe
38% deliveries
1,555Pax aircraft
Converted tofreighters
11,037Pax aircraftReplaced by
moreEco-efficient
types
• Most deliveries to go to Asia Pacific, 39% or 12,253 passenger aircraft
• North America and Europe 38%, or 11,700 aircraft deliveries
• 1,555 passenger aircraft will be converted to freighters
• North America to take most freighters, 338 new, 545 converted, 37% of demand
• Mid-size freighter deliveries are the heart of the market – 49% new and converted
• 12,355 aircraft will be retired to be replaced by more eco-efficient type
New deliveries
Converted
Remarketed & stay in service
30,555
31,358
1,555
4,263
803
11,037
12,355
1,318
PassengerFleet
FreighterFleet
Retired
Passenger aircraft (≥ 100 seats) and jet freight aircraft (>10 tons)
DEMAND FOR MORE THAN 31,000 NEW AIRCRAFT DELIVERIES
Demandfor air travel
02
017Global Market Forecast Global Market Forecast016
Key drivers for air traffic growth:
Economic growth
Increasing urbanisation
Expanding middle class
Rise in migration, tourism
and international students
• Economic growth rates in emerging regions/countries will outstrip the developed.
• Emerging markets do not only include Asia/Pacific, but also Latin America, Africa and the Middle East.
• A ten percentage point increase in passengers from emerging countries in the last 10 years: more to come.
• Today, the middle class represent 33% of world population; forecasts suggest 63% by 2033.
• The middle class will grow nearly four times in the Asia/Pacific.
• International tourist arrivals to reach 1.6 billion in 2020, well above the 1.1 billion as of 2013.
INTERNATIONAL TOURIST ARRIVALS EXPECTED TO REACH1.6 BILLION PEOPLE BY 2020Source: World Tourism Organization, Airbus
1995
2000
2005
2010
2015
2020
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
International tourist arrivals (million)
History Forecast
019Global Market Forecast Global Market Forecast018
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
10
9
8
7
6
5
4
3
2
1
0
80%
70%
60%
50%
40%
30%
20%
10%
0%
World population and share of urban agglomerations evolution (billion)
THE WORLD IS MORE URBANISEDSource: UN population division, Airbus
Share of international trips tickets issued in emerging countries
40%
35%
30%
25%
20%
15%
10%
5%
0%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
MORE AND MORE AIR PASSENGERS ORIGINATING FROM EMERGING COUNTRIESSource: Sabre GDD (September data of each year), Airbus
2033
2023
2013
2,356
3,740
5,375
967
446
264
679
Other
Rural
Asia-Pacific
Urban
North America
Europe & CIS
GLOBAL MIDDLE CLASS TO MORE THAN DOUBLESource: Kharas and Gertz, Airbus
Global Middle Class*
(Millions of people)
*Households with dailyexpenditures between$10 and $100per person (at PPP)
x 2.3
x 3.8
596
775
2,186
3,675
261 252
697 673
2013 2023 203363%
7,100 7,900 8,500
World Population
Middle class as % of world population
48%33%
Urban share
• The network is constantly evolving but 40% of ASKs flown today are flown on routes existing 20 years ago
• The share of traffic on these routes is now stable, suggesting new route driven fragmentation is maturing
• Much of the fragmentation has been driven by LCCs and Middle Eastern airlines
• Airlines are finding more economical ways to expand through code share and alliances
• Unsurprisingly much of the opportunity focuses on the emerging nations
• Mega-cities are the home for larger aircraft. Today, 85% of A380s fly between these 42 cities, the remaining 15% fly from Mega-cities to secondary destinations
• Massive amount of traffic carried through the Aviation Mega-cities
Evolution of number of routes, 1995-2013, Index 100=1995
750
700
650
600
550
500
450
400
350
300
250
200
150
100
50
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
MOST OF THE NETWORK FRAGMENTATION IS DRIVEN BY LCCSAND MIDDLE EAST CARRIERSSource: OAG
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
1,400, 000
1,200, 000
1,000, 000
800,000
600,000
400,000
200,000
0
Evolution of monthly number of �ights, 1996-2013
CODE SHARE GENERALISATIONSource: OAG, September month
Code share flights
Operating flights
Middle East OthersLCC
Networkdevelopment
021Global Market ForecastGlobal Market Forecast020
42AVIATIONMEGA-CITIES
DAILY PASSENGERS:Long Haul traffic to/from/via Mega Cities
OF LONG-HAUL TRAFFIC ON ROUTES to/from/via 42 cities
0.8M
94%
2013 AVIATION MEGA-CITIESSource: Airbus Market Research and Forecasts
> 10,000 daily long-haul passengers
> 20,000 daily long-haul passengers
> 50,000 daily long-haul passengers
91AVIATIONMEGA-CITIES
DAILY PASSENGERS:Long Haul traffic to/from/via Mega Cities
OF LONG-HAUL TRAFFIC ON ROUTES to/from/via 91 cities
2.2M
99%
2033 AVIATION MEGA-CITIESSource: Airbus Market Research and Forecasts
Cities with more than 10,000 daily long-haul passengers, Long-haul traffic: flight distance >2,000nm, excl. domestic traffic
Source: Airbus
023Global Market Forecast Global Market Forecast022
In the last 30 years:• Airport movements up nearly 2.5 times
• Airport connectivity almost doubled
• Average offered seats per aircraft heading towards 200, aircraft are getting bigger!
• Offered ASKs per aircraft have more than doubled
• Worldwide average load factor ~80%, up 17 percentage points since 1980
Productivity up,
Environmental impact down
Avg. number of movements per airport
x 1.8
14
12
10
8
6
4
2
0
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
AIRPORT CONNECTIVITYSource: OAG, Airbus
Avg. number of destinations per airport
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
x 2.4
AIRPORT MOVEMENTSSource: OAG, Airbus
x2.4 x1.8AIRPORT CONNECTIVITY
MOVEMENT PER AIRPORT
Is there a limit to productivity improvements? Still some margin regarding airport use
025Global Market ForecastGlobal Market Forecast024
Kilograms per passenger per trip (avg.)
120
100
80
60
40
20
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
- 31%
FUEL CONSUMPTIONSource: ICAO, IATA, Airbus
Kilograms per passenger per trip (avg.)
350
300
250
200
150
100
50
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
- 31%
C02 EMISSIONSSource: ICAO, IATA, Airbus
OFFERED ASKS PER AIRCRAFTSource: OAG, Ascend, Airbus
+ 111%
OFFERED SEATS PER AIRCRAFTSource: OAG, Ascend, Airbus
Avg. number of offered seats per aircraft (000)
250
200
150
100
50
0
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
+ 43%
Is there a limit to productivity improvements?Still some margin regarding aircraft utilisation
Since 2000:• Average fuel per passenger per trip
is down 31%
• Therefore CO2 is also down 31%
027Global Market Forecast Global Market Forecast026
03Traffic
forecast
031Global Market Forecast Global Market Forecast030
World annual traf�c (RPKs - trillions)
Oil C
risis
Oil C
risis
Gulf
Cris
is
Asia
n Cr
isis
9/11
SARS
6.0
5.0
4.0
3.0
2.0
1.0
0.0
1963
1968
1973
1978
1983
1993
1998
2003
2008
2013
73%
Fina
ncia
l Cris
is
73%GROWTH DESPITE MULTIPLE CRISES OVER THE LAST TEN YEARS
• Aviation remains resilient to crises, growing 73% over the last 10 years.
• Domestic China will be the largest flow by 2033, representing 11.9% of world traffic.
• An average growth rate of 9.8% per year will make Domestic India the 7th largest flow by 2033, and the fastest growing domestic flow in our forecast.
• Airlines in the Asia/Pacific will fly 36% of total traffic, the same as North American and
European airlines combined.
• Airlines in Europe and North America will together fly 37%.
• Middle Eastern carriers will grow from an 8% share to 13% of traffic in the next 20 years.
Passenger traffic forecast
4.7%2013-2033
PER ANNUM
AIR TRAVEL HAS PROVED TO BE RESILIENT TO EXTERNAL SHOCKSSource: ICAO, Airbus
033Global Market Forecast032 Global Market Forecast
Dom
estic
PRC
Dom
estic
USA
Intr
a W
este
rn E
urop
e
Wes
tern
Eur
ope
- US
A
Dom
estic
Asi
a Em
ergi
ng
Asia
Em
ergi
ng -
Wes
tern
Eur
ope
Dom
estic
Indi
a
Indi
a Su
b-Co
ntin
ent -
Mid
dle
East
Wes
tern
Eur
ope
- M
iddl
e Ea
st
Dom
estic
Bra
zil
Wes
tern
Eur
ope
- PR
C
PRC
- US
A
Wes
tern
Eur
ope
- So
uth
Amer
ica
Sout
h Am
eric
a -
USA
Asia
Em
ergi
ng -
PRC
Cent
ral E
urop
e - W
este
rn E
urop
e
Indi
a Su
b-Co
ntin
ent -
USA
Asia
Em
ergi
ng -
Mid
dle
East
Asia
Adv
ance
d - A
sia
Emer
ging
Sub
Saha
ra A
frica
- W
este
rn E
urop
e
Billi
ons
RPK
2,000
1,500
1,000
500
_
DOMESTIC PRC WILL BE THE LARGEST O&D TRAFFIC FLOW IN 2033Source: Airbus GMF 2014
DOMESTIC INDIA WILL BE THE FASTEST O&D TRAFFIC FLOWSource: Airbus GMF 2014
Dom
estic
Indi
a
Indi
an S
ub -
PRC
Nort
h Af
rica
- PR
C
Sub
Saha
ra A
fric
a -
PRC
Indi
an S
ub -
Sou
th A
mer
ica
Asia
Em
ergi
ng -
Indi
an S
ub
Mid
dle
East
- R
ussi
a
Asia
Em
ergi
ng -
Sou
th A
mer
ica
Sub
Saha
ra A
fric
a -
Mid
dle
East
CIS
- PR
C
PRC
- Ru
ssia
Mid
dle
East
- S
outh
Am
eric
a
Cent
ral E
urop
e -
Mid
dle
East
Mid
dle
East
- P
RC
Asia
Em
ergi
ng -
PRC
Intr
a As
ia E
mer
ging
Asia
Adv
ance
d -
Indi
an S
ub
Indi
an S
ub -
Rus
sia
CIS
- M
iddl
e Ea
st
Mid
dle
East
- S
outh
Afr
ica
9.5%
9.5%
8.9%
8.6%
8.4%
8.4%
8.3%
8.2%
8.0%
7.9%
7.8%
7.8%
7.6%
7.6%
7.5%
7.5%
7.4%
7.2%
7.0%
7.0%
Billi
ons
RPK
400
300
200
100
_
035Global Market Forecast Global Market Forecast034
ASIA-PACIFIC TO LEAD IN WORLD TRAFFIC BY 2033Source: Airbus GMF 2014
2013 traf�c 2012-2033 traf�cAsia-Paci�c
Europe
North America
Middle East
Latin America
CIS
Africa
1,0000 2,000 3,000 4,000 5,000
RPK traf�c by airline domicile (billions)
5.7%30% 36%
3.6%25% 20%
2.9%24% 17%
7.1%8% 13%
5.4%5% 6%
5.4%4% 5%
4.7%3% 3%
20-YEARCAGR
% SHARE OF 2013 WORLD RPK
% SHARE OF2033 WORLD RPK
037Global Market Forecast Global Market Forecast036
Emerging markets driving growth• Emerging markets will
drive growth, whereas traffic between emerging markets will grow 6.8% annually, representing 38 % of total traffic in 2033.
• 28% of traffic will involve flows in the advanced aviation markets, whereas International long-haul traffic will still represent the largest share of traffic worldwide in 2033.
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
16
14
12
10
8
6
4
2
0
World annual RPK (trillion)
ICAO total traf�c Airbus GMF 2014
Advanced-Advanced CAGR
2.6%Emerging-Advanced CAGR
5.0%
42%
33%
25%
28%
34%
38%
Emerging-Emerging CAGR
6.8%
EMERGING REGIONS WILL ACCOUNT FOR THE LARGEST SHARE OF ORIGIN AND DESTINATION TRAFFIC WORLDWIDESource: ICAO, Sabre GDD, Airbus GMF 2014
Emerging-Emerging
Advanced-Emerging
Advanced-Advanced
039Global Market Forecast Global Market Forecast038
GMF 2013 GMF 2014
2000
2002
2004
2006
2008
2010
2012
2014
2018
2020
2022
2024
2026
2028
2030
2032
60,000
50,000
40,000
30,000
20,000
10,000
0
World trade evolution (billion 2010 $US)
2012-2032+4.6%/year
2012-2032+4.3%/year
• Freight traffic will grow 5.0% per annum over the next 10 years, and +4.5% over the next 20 years.
• Our freight traffic forecast is slightly lower this year, as a result of slightly lower long term prospects forecast for trade at 4.3% CAGR.
GMF FREIGHT FORECASTS REVISED DOWN SLIGHTLY Source: Seabury, Airbus
WORLD TRADE FORECASTS HAVE BEEN REVISED DOWNWARDS COMPARED TO PREVIOUS GMFSource: IHS Global Insight, Airbus
Freight traffic forecast
04Demand
for passenger aircraft
• The fleet will double to 34,800 aircraft
• 75% of operations are below 1,300nm for single-aisle, 4,800nm for Twin-Aisle, and 5,900nm for VLAs
• Each segment has discrete areas of operation in terms of range, but clearly there is some overlap
• Average seats per single aisle flight increasing from ~130 in 1993 to ~155 in 2013
• A focus for larger aircraft at Aviation Mega-cities
20%OF TWIN-AISLES OPERATE
Demand for passenger aircraft
LESS THAN
2,000 NM
043Global Market Forecast
1993 1998 2008 2013
160
155
150
145
140
135
130
125
120
Average seats per single-aisle �ight
DENSIFICATION OF SINGLE-AISLE AIRCRAFTSource: OAG, Airbus Market Research and Forecasts
+14%
20-YEAR GROWTH IN AVERAGE
SINGLE-AISLE SEATS
045Global Market Forecast Global Market Forecast044
0
200
400
800
1,00
0
1,20
0
1,40
0
1,60
0
1,80
0
2,00
0
2,20
0
2,40
0
2,60
0
2,80
0
3,00
0
3,20
0
3,40
0
3,80
0
4,00
0
4,20
0
4,40
0
4,60
0
4,80
0
5,00
0
5,20
0
5,40
0
5,60
0
5,80
0
6,00
0
6,20
0
6,40
0
6,60
0
6,80
0
7,00
0
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%GCD Range (nm)
CLEAR SHIFT IN AIRCRAFT-TYPE DEPLOYMENT AROUND 2,000 NAUTICAL MILESSource: OAG, Airbus Market Research and Forecasts
Regional
VLASingle-aisle
Twin-aisle
047Global Market Forecast Global Market Forecast046
Between secondary cities
From/To/Between AMC
A380
777-300/300ER
787
747-400/8
All Widebody Aircraft
777-200/200ER/-200LR
767
A330
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
Long-haul �ights by operation type
THE LARGER THE AIRCRAFT THE HIGHER THE FOCUS ON AVIATION MEGA-CITIESSource: OAG (Sept 2013)
049Global Market Forecast Global Market Forecast048
1% 85%14%
7% 61%32%
1% 89%10%
2% 75%23%
GLOBAL NETWORK NORTH AMERICA
LCCs
OTHERS*
1% 79%20%
LATIN AMERICA 3% 75%22%
AFRICA
16% 38%
46%
MIDDLE EAST
2% 85%13%
CIS
5% 66%29%
ASIA PACIFIC
3% 79%18%
EUROPE
10%
47%43%
US$ 4.4 trillion
1,228
22,071
7,256
30,555 aircraft
New deliveries
Market valueFleet evolution
16,855
17,963
12,592
4,263
Beginning 2014
2033
Growth
Replaced
Stay in service& remarketed
New deliveries by neutral category
100 125 150 175 210 250 300 350 400 VLA
US$ 2.1 trillion
1,219
3,364
7,228 6,547
3,713
2,439 2,514
1,405898 1,228
US$ 1.9 trillion
US$ 0.4 trillion
TA
SA
VLA
New deliveries by region
051Global Market Forecast050 Global Market Forecast
Demandby region
05
055Global Market ForecastGlobal Market Forecast054
• Asia-Pacific will lead world economic growth, both in real GDP with an average of 4.6% per year and in trade with an average of 5.7% per year. GDP is an important driver of aviation growth.
• Over 50% of the new routes will connect with Asia-Pacific.
• Emerging markets, such as Africa and the CIS, are also set for more connectivity with Asia-Pacific, with nearly 20% of new routes to the region coming from these regions.
• Seats and flights offered by the LCCs have increased dramatically since 2000.
• The fact that the seats offered has out-paced flight growth, means that the average aircraft capacity utilised by LCCs has grown more than 50% over that period.
• Domestic and intra-regional flying set to grow faster than inter-regional traffic; 6.2% per annum vs 5.2%. Although both are well above the global average for 20 year traffic growth at 4.7% CAGR.
12,253
34%
38% 62%
NEW DELIVERIES
WILL BE WIDE-BODY WITH MANY OF THESE TO BE USED ON MEDIUM RANGE OPERATIONS, AS WELL AS LONG-HAUL.
REPLACEMENT FOR GROWTH
Asia- Pacific
057Global Market Forecast
Beginning2014
In 2014
5,083
* Passenger aircraft ≥100 seats ** 2013-2033 CAGR
2023-2033
ResultsRPK traffic growth from/to Asia-Pacific by region
Global Market Forecast056
059Global Market Forecast Global Market Forecast058
• Europe will represent 20% of the world economy by 2033.
• Air traffic in Europe, expressed in ASKs, is 15% larger than the peak pre-crisis in 2007/2008.
• Today, 45% of all seats offered within Europe are on an LCC flight and there have been significant increases in LCC traffic to/from other regions such as CIS, Northern Africa and the Middle East.
• Today, there are more than 50 million monthly passengers connecting to long-haul flights. For major international carriers in Europe, these represent the core short haul market.
• While the majority of the growth has come from the short-haul market, which has grown by 75% in the last ten years; the long-haul market has also seen impressive growth of 45% over the same period.
• Today, nearly 50% of all long-haul flights connect with Europe and over 50% of long-haul seats offered connect to the region.
• For the next 20 years, long-haul passenger traffic will grow slightly faster than short-haul traffic (3.9% per year vs 3.8%.)
Europe
6,167
79%
49% 51%
NEW DELIVERIES
WILL BE SINGLE-AISLES DUE TO EUROPEAN POPULATION LANDSCAPE
REPLACEMENT FOR GROWTH
061Global Market Forecast Global Market Forecast060
Results RPK traffic growth from/to Europe by region
063Global Market ForecastGlobal Market Forecast062
• US real GDP growth is forecast to average 2.5% per year in the 2013-2033 period. By 2033, North America will still account for 22% of the global economy (in real terms).
• Origin and destination (O&D) traffic to/from North America to grow at an average of 3.4% for the next 20 years.
• The annual retirement trend of passenger aircraft (>=100 seats) in North America is on an upward trajectory, with a 10-year CAGR of 6.8%.
• The Federal Aviation Administration (FAA) estimates that airport congestion and delays cost the economy $22 billion in 2012, which could escalate to $63 billion in 2040.
• One tactic, which is helping to alleviate some of the effects today is the use of larger aircraft.
• Inter-regional flying set to grow significantly faster than domestic or intra-region operations, CAGR of 4.2% vs 1.9%.
North America
5,533
85%
65% 35%
NEW DELIVERIES
WILL BE SINGLE-AISLES, DUE TO THE IMPORTANCE OF THE US DOMESTIC MARKET. BUT REPLACEMENTS, AND AN OPPORTUNITY AND FOCUS ON INTERNATIONAL OPERATIONS WILL STIMULATE DEMAND FOR LARGER TYPES
REPLACEMENT FOR GROWTH
065Global Market Forecast Global Market Forecast064
Results
RPK traffic growth from/to North America by region
067Global Market Forecast Global Market Forecast066
• The Middle East has become a major centre for air transport, one of growing global importance.
• The share of passenger aircraft in the world operated by the regions carriers has doubled in 10 years. This has occurred even with the global fleet of wide-body aircraft growing 24%.
• It is the only region in the world where the wide-body fleet is larger than the single-aisle fleet.
• Globally, air traffic has doubled every 15 years; in the Middle East, ASKs multiplied three and a half times in the last 10 years alone.
• Medium and long-haul routes between the Middle East and Asia-Pacific or Europe constitute the core growth markets for traffic.
• Since 2007, the ASK market share of low-cost carriers on Middle Eastern short-haul markets has increased significantly, reaching nearly 25% today.
Middle East
2,148
62%
20% 80%
NEW DELIVERIES
WILL BE WIDE-BODIES DUE TO THE POSITION THE REGION IS CREATING FOR ITSELF AS A MAJOR GLOBAL HUB
REPLACEMENT FOR GROWTH
069Global Market Forecast Global Market Forecast068
Results RPK traffic growth from/to Middle East by region
071Global Market ForecastGlobal Market Forecast070
• The region’s real GDP growth is expected to average 3.9% per year in the 2013-2033 period, above world average of 3.2%, and helping to stimulate air travel.
• In countries such as Chile, Brazil and Colombia, the propensity to travel is expected to reach the levels currently observed in many more mature economies by 2033.
• Traffic within the region is expected to be prominent over the next 20 years, representing 35% of total RPKs in 2033, from 30% in 2013.
• Two of the top twenty largest traffic flows, are international traffic flows connecting to the region: Western Europe - South America, with an expected annual growth of 4.6% and South America - USA, with an average annual expansion of 5.2%.
• There has been strong growth in domestic markets, even beyond the two largest markets, Brazil and Mexico. For example, over the last ten years a double digit annual growth rate in Chile was matched by Colombia and Peru.
Latin America & Caribbean
2,263
79%
33% 67%
NEW DELIVERIES
REPLACEMENT FOR GROWTH
WILL BE SINGLE-AISLES DRIVEN BY STRONG GROWTH IN AIR TRAVEL DOMESTICALLY AND AROUND THE REGION (5.6% INTRA-REGIONAL AND DOMESTIC GROWTH PER ANNUM).
073Global Market Forecast Global Market Forecast072
ResultsRPK traffic growth from/to Latin America by region
075Global Market ForecastGlobal Market Forecast074
1,218
132%
85%
NEW DELIVERIES
THE MAJORITY WILL BE FOR GROWTH
WILL BE SINGLE-AISLES
THE CIS PASSENGER FLEET IS FORECAST TO GROW
• The Commonwealth of Independent States (CIS) is one of the largest regions in the world, departing from St Petersburg in Russia, it would take almost 9 hours flying to reach its eastern most city.
• Over the last decade, traffic to/from/within CIS has grown on average 11% a year in terms of ASKs, twice as fast as the world average of 5.1%.
• In 2013, traffic growth reached 7.0%, dramatically outpacing economic activity, aviation’s traditional driver for growth.
• An easing of visa procedures helped, stimulate the number of arrivals in CIS countries, which have increased 50% over the last 10 years.
• Traffic growth will be above the World average, with strong growth in inter-regional traffic at a 6.2% CAGR.
• The share of older less efficient eastern built aircraft in the fleet, above 100 seats, has reduced in 10 years from 86% in 2003 to only 12% today.
CIS
TO
AIRCRAFT2,044
Global Market Forecast076
1,036
20 year newdeliveries
1,218
Results RPK traffic growth from/to CIS by region
077Global Market Forecast
079Global Market Forecast Global Market Forecast078
• Africa’s biggest asset is people, its population is set to grow to 1.7 billion by 2033.
• Strengthening entrepreneurship, travel and tourism, regional integration are often listed as just a few of the drivers of sustainable growth in Africa.
• Over the 2013-2033 period, Africa is forecast to reach similar economic growth as Asia-Pacific, with average real GDP growth of 4.6% per year or trade growth of 5.5% per year.
• In terms of air traffic, intra-regional development also represents a huge potential for air transport in Africa, as the share of intra-regional passenger traffic is well below observed levels in Asia-Pacific, the Americas or Europe.
• At just an 8% share of intra-regional traffic, the low cost model could play a bigger role in Africa’s aviation future.
• More growth expected on domestic and intra-regional flying than inter-regionally, 6.1% vs 5.5% CAGR.
Africa
973
146%
8%
75%
92%
NEW DELIVERIES
BY 2033
FLEET SET TO GROW
REPLACEMENT
WILL BE SINGLE-AISLES
FOR GROWTH
Global Market Forecast080
Results RPK traffic growth from/to Africa by region
081Global Market Forecast
Demand for freighters
06
085Global Market Forecast Global Market Forecast084
North America
977
775
Latin America
16274 Africa
8649
Europe & CIS
452337
Middle East
17067
Asia-Paci�c
798
303
Freightforecast 2014
North America fleet is mainlya replacement market Asia-Pacific fleet is set to tripleas growth market
THE FUTURE FREIGHTER FLEET DISTRIBUTION WILL REFLECTTHE GROWING INFLUENCE OF EMERGING MARKETSSource: Airbus GMF 2014, ASCEND
2014: 1,605
2033: 2,645
World fleet evolutionFreight traffic growth
4.5% CAGR*
087Global Market ForecastGlobal Market Forecast086
• Today, there are 1,605 dedicated freighter aircraft with a cargo hold of at least 10 tons.
• Air Cargo transports a third of total World trade by value.
• Demand fundamentals remain strong in the long term. Global trade is forecast to develop at 4.3% per year for the next 20 years.
• Freight market dynamics have changed however. In recent years, changing practices in inventory management, available capacity and pricing from other modes, such as ships, has had an effect.
• In the future an increase in passenger airlines will lead to increased belly capacity, potentially leading to less demand for dedicated freighters.
• More intra-regional traffic and the express freight boom means that freighters in the mid-size category are becoming more attractive to the freight operators.
• Despite the challenges facing the air cargo market, the long-term prospects remain positive, with freight traffic set to double over the next 20 years.
• Airbus forecasts demand for more than 800 new build freighters over that time
• Our forecast suggests that the highest demand in terms of volumes, both new and converted, will come from the mid-size freighter category with 1,145 aircraft (414 new and 731 converted).
1,555Converted
803New build
Fleet to almost Double
FREIGHTER DELIVERIES WILL EXCEED 2,300 AIRCRAFT IN THE NEXT 20 YEARS
New freighters
Conversions
Sm
all
10t <
pay
load
< 3
0t
1,500
1,000
500
0
1,145
601612
Freighter deliveries over the next 20 years
Mid
-Siz
e30
t < p
aylo
ad <
80t
Larg
epa
yloa
d <
80t
731
414
212
389
Summary & methodology
07
091Global Market Forecast Global Market Forecast090
Summaryof results
Africa Asia-Pacific
CIS Europe Lat. &Caribb.
Middle East
North America
TOTAL
Single-Aisle 734 8,066 1,036 4,895 1,784 826 4,730 22,071
Small Twin-Aisle
158 2,510 132 754 349 481 569 4,953
Intermediate Twin-Aisle
54 1,055 25 368 102 500 199 2,303
Very Large Aircraft
27 622 25 150 28 341 35 1,228
TOTAL 973 12,253 1,218 6,167 2,263 2,148 5,533 30,555
Africa Asia-Pacific
CIS Europe Lat. &Caribb.
Middle East
North America
TOTAL
Single-Aisle 734 8,066 1,036 4,895 1,784 826 4,730 22,071
Small Twin-Aisle
162 2,535 134 763 356 486 709 5,145
Intermediate Twin-Aisle
57 1,147 39 410 125 543 320 2,641
Very Large Aircraft
32 724 32 185 29 387 112 1,501
TOTAL 985 12,472 1,241 6,253 2,294 2,242 5,871 31,358
Africa Asia-Pacific
CIS Europe Lat. &Caribb.
Middle East
North America
TOTAL
Small - - - - - - - -
Mid-size 5 72 13 36 30 29 229 414
Large 7 147 10 50 1 65 109 389
TOTAL 12 219 23 86 31 94 338 803
Africa Asia-Pacific
CIS Europe Lat. &Caribb.
Middle East
North America
TOTAL
Small 39 311 7 81 82 6 86 612
Mid-size 23 116 22 123 37 24 386 731
Large 10 73 13 27 - 16 73 212
TOTAL 72 500 42 231 119 46 545 1,555
NEW PASSENGER AIRCRAFT DELIVERIES BY REGION
NEW PASSENGER & FREIGHT AIRCRAFT DELIVERIES BY REGIONNEW FREIGHT AIRCRAFT DELIVERIES BY REGION
CONVERTED FREIGHT AIRCRAFT DELIVERIES BY REGION
Passenger aircraft ≥100 seats and freight aircraft ≥10 tons
093Global Market ForecastGlobal Market Forecast092
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