Forecasting ina cyclical industry

Transcription

1 DAY 1: WEDNESDAY 18 APRIL 2012 Strategies and Tools for Forecasting ina cyclical industry Mario Formica, Vice President Strategic Marketing & AirlineStudies

2 ATR at a glance The role of regional air transport towards sustainability Forecasting in a cyclical industry Conclusion

3 ~ 50bn revenues ~ 20bn revenues 50 % ~ 1.4bn$ revenues 50 %

4 Leadership 1,200+ firm orders 22 Million cycles 180 operators in 95 countries Production ramp up to 72 aircraft per year in 2012 Backlog valued at 5.0 Bn US$ 585 new ATR orders in the last 7 years; 70% from emerging g economies 157 new orders in 2011 (+79 options) 33% 17% Strategies and Tools for Orders by region 10% As of 31 of December % 8% Europe/CIS North America Asia Pacific Africa - Middle East Latin America Milestone 2011: ATR -600 Series Certification, first deliveries & EIS Milestone 2012: 1000th ATR delivery

5 Preparing next step of fatr ATR s growth More than 3 years of full production Strategies and Tools for 80 Production/Deliveries Ramp-Up F2012 F2013 F2014

6 The role of regional air transport towards sustainability

7 Regional Aircraft Relevance in the Air Transport System Fleet 14% Wide body 38% Regional 9,750 units Narrow body 51% Departures 7% Wide body 42% Regional Narrow body 23% Flown Hours Wide body Narrow body Regional Correlated with gaseous emissions i 28% 48% Total World Passenger Fleet 25,600 units Worldwide Year % Regional aircraft fleet account for about 40% of total world regional fleet. Fully 60% of airports with scheduled service are served by regional aircraft. More than 40% of new routes in the last 5 years are operated by regional aircraft only. Sources: Lundkvist, Avsoft and Back-OAG databases

8 Short haul is a big market 100% Pax seats 90% 80% 70% 60% 50% 50% pax worldwide fly less than 500 nm 40% 30% 20% 10% 0% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 nm 30% pax worldwide fly less than 300 nm Over 750 M pax per year : not a niche market! Source: OAG

9 Regional aircraft operate half of short haul flights NM 55% of OAG frequencies NM 39% of OAG frequencies Turboprop 26% WB 3% Turboprop 39% SA 47% RJ 24% RJ 22% WB 1% SA 38% Source: OAG scheduled flights database TP = Turboprop RJ = Regional Jet SA = Single-aisle (above 120 seats) WB = Widebody Source: OAG - January, 2012 Turboprops are the preferred choice for airlines on short haul, thin sectors and this is expected to be reinforced in the next years

10 Turboprop advantage: Propulsive efficiency is the key efficienc cy (%) Pro opulsive TURBOPROP TURBOFAN Turboprop is optimised for speed around 300 kts, over short range trips Airspeed (kts) Typical turboprop speed Typical regional jet speed

11 Fuel efficiency i is a must for regional airlines ili operating on short haul sectors Kg of fuel 1,800 1,600 TP RJ 1,400 1,200 1, Turboprop low fuel consumption is an hedge against rocketing fuel prices nm 300 nm 400 nm

12 Winds of change in regional aviation iti Regional airline business model is evolving: the key driver of this change is economics, and this factor now favors large capacity Turboprops and RJ. High fuel prices, below-average yield, are pushing up dramatically the demand for modern turboprops, an hedge against high fuel prices Total seat net Orders Turboprop Regional Jet 894 (77%) 270 (23%) TP market share: 77% in the seat category. 65% in the seat category. Over the last 7 years, turboprops have clearly dominated the 30- to 70-seat regional market. Emerging markets, namely Asia and Latin America, are leading the global growth

13 Oil Price volatility expected to continue Macroeconomic factors are driving this volatility Unfolding story in the Middle East Lybia is still restive Iraqi production has not fully come back online Iran s threat to prevent oil shipments through the straits of Hormuz. Recovery at risks, as oil heads for $176/barrel in 2013 Inadequate investment in oil production and regional politics in the Middle East and North thafrica is threatening t to push prices as high h as $176/barrel in 2013 At $120 today, economic recovery "is in a danger zone (5% of global GDP). An oil price rise towards $176 "is a very risky ik scenario". Source: Int l Energy Agency chief economist Fatih Birol, in London presenting IEA's World Energy Outlook report 2011

14 «The small jet airplane era is over because the economics simply are not there» «By 2015, US airlines will have about 200 jets with 50 or fewer seats, down from about 1,200. More than 150 have been scrapped in the last 4 years» «With oil averaging 120$ this year, up 45% from 2010, airlines favor new turboprops or regional jets that carry 90 or more people and fly less often» Michael Boyd, President of Consultant «Boyd Group Int l Inc «in Evergreen, Colorado, Sep. 2011

15 Reducing the DOC/seat/miles.. is a sustainable approach Strategies and Tools for Airlines are more & more looking for cost cutting and efficiencies! By optimising fleet and capacity, and selecting the right aircraft on the right sector

16 HARD TIMES S? Strategies and Tools for

17 survivingi the four horsemen of the apocalypse.. More than 100$!!! +130% Credit Crunch & Financial Market Turmoil

18 Volcano s exuberance: the Eyjafjallajökull eruption in April 2010

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20 TO IMPROVE THE SALES PROCESS Why a Market Forecast? UNDERSTAND MARKET EVOLUTIONS Short- haul Medium- haul Long- haul ANTICIPATE OPERATORS NEEDS Environment Regulations Costs ANALYSE COMPETITIVENESS OF CURRENT PRODUCTS AGAINST COMPETITION TO IMPROVE THE STRATEGIC DECISION MAKING PROCESS ANALYSE OPERATORS FUTURE BE CLOSE TO DETERMINE NEEDS MARKET REQUIREMENTS FUTURE COMPETITIVE THREATS

21 Forecasting. How??Whi Which h drivers? di Strategies and Tools for Oil Price GDP Growth % World Brazil China India Turkey Propensity to travel Year % Regional Year Market Share % Market Share Low-cost 27.7% 7% Market Share 78.5% 40 Market Share % 20 Majors 10.2% 13.9% Market Share 40.4% Market Share 45.7% Year

22 Aviation: A Cyclical Industry Where are we now? (early 2011) Strategies and Tools for

23 Aviation: A Cyclical Industry Where are we now? (April 2012) Strategies and Tools for Or here Still here? Or here

24 Dealing with forecast Aviation industry subject to highly volatile and unpredictable external influences. Factors such as oil price volatility, economic uncertainty, congestion concerns, credit crunch/financial turmoils and environmental issues are not going away. They eyae are here eetostay,ao along with possible new, unknown challenges. Developing forecast of aviation demand and activity levels continues to be challenging. In terms of amplified volatility, the process is filled with uncertainty. Given the current instability in the global economy, there is much uncertainty as to the timing and strength of the different cycles and the relative speed of recovery in aviation demand. Short-term discontinuities of cycles hard to predict

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26 Strategies for sustainability: Larger Capacity Turboprop?

27 Abreast A318 A319NEO SJ NG130 SJ Abreast X ARJ ARJ X 4 Abreast ATR CRJ-200 DASH8-Q300 3 Abreast ERJ140 ERJ135 ERJ145 ATR CRJ-700 DASH8-Q400 E 170 X MRJ-70 CRJ-900 E 175 New F100? MRJ-90 CRJ-1000 MRJ-100? E 190RE CSeries 110 CSeries 130 E 195X? E 195RE Comac MAX MS21 CSeries 150? Next E-Jet Family??? best Seating - One Class MAX A320NEO MAX A321NEO The dangerous zone : the territory of the Boeing and Airbus best selling models in their product line Regional Jet market demand is clearly moving towards the seat category. Turboprops set to dominate the sub-100 seat market

28 Long Term demand df for Modern Turboprops remains strong 20 Years, Airlines will need 3,350 new turboprops p Value: $ 78.5Bn 50 seat 400 A/C 70-seat 1,600 A/C 90+ seat ,350 A/C About 80% of the total demand for new turboprops is represented by 70 and 90+seat segments

29 Priorities and future directions Strategies and Tools for A generation ago, Higher, Further, Faster were the imperatives for any vision of the future for air transport. Now they eyae are More oeaffordable, Safer, Cea Cleaner, e,quieter, reflecting the need to combine cost effectiveness with an uncompromisingattachment to safety and environmental objectives.

30 The Future: Sustainability 1. The environmental dimension Seeks to reduce environmental impact on a global and regional scale (noise, pollution, land-use ) 2. The economic dimension Considers economic efficiency and contribution to economic growth (jobs, ability to easily move, productivity, cost recovery ) 3. The social dimension Represents solidarity it and equity (access to remote areas, public service obligations, safety ) Regional aircraft and turboprops namely can play a fundamental role towards a sustainable air transport growth

31 Merci de votre attention