Global Market Forecast 2012-2031 Presented by: JOHN LEAHY COO, Customers
Global Market Forecast 2012: Highlights GMF 2012 key numbers and 20-year change World Fleet Forecast 2011 2031 % Change RPK (trillions) 5.1 12.8 150% Passenger aircraft fleet 15,560 32,550 109% New passenger aircraft deliveries 27,350 Dedicated freighters 1,620 2,940 82% New freighter aircraft deliveries 850 Total New Aircraft Deliveries 28,200 Market value of $4 trillion Passenger aircraft 100 seats, Freight aircraft 10t Source: Airbus GMF
20-year demand for 28,200 new passenger and freight aircraft 20-year new deliveries of passenger and freight aircraft 19,520 single-aisle aircraft +353 aircraft over GMF 2011 6,970 twin-aisle aircraft +60 aircraft 1,710 very large aircraft +30 aircraft 28,200 new aircraft +443 aircraft Passenger aircraft ( 100 seats) Jet freight aircraft (>10 tons) Market value of $4 trillion Source: Airbus GMF
Continued economic uncertainties leading to lower growth in 2011-2012 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% World real GDP year-over-year quarterly evolution (%) Strong growth since 2004 Slowdown Deep crisis Recovery Continued growth and recovery 2006 2007 2008 2009 2010 2011 2012 The depth of this crisis and ancillary economic factors have resulted in slower than expected growth Source: IHS Global Insight
After a strong recovery, ASK traffic now growing at a slower pace World ASK year-on-year growth rate (monthly) vs. GDP year-on-year growth rate (quarterly) 10% 8% 6% 4% August passenger traffic up 3.0% 2% 0% -2% -4% -6% 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 Source: IHS Global Insight, OAG, Airbus
Expanding regions Air transport growth is highest in expanding regions China India Middle East Asia Africa CIS Latin America Eastern Europe 6 billion people 2012 Yearly RPK growth 2012-2031 Western Europe North America Japan 1 billion people 2012 Billions of people will increasingly want to travel by air Source: IHS Global Insight, Airbus
A two-speed world 10% Real GDP growth (%) History Forecast 8% 6% 4% Emerging economies* 2% 0% -2% Mature economies -4% 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 54 emerging economies. Data Source: IHS Global Insight, Airbus
Emerging markets, driving growth 16% 12% 8% 4% 0% -4% -8% ASKs year-over-year monthly evolution (%) Emerging Markets traffic up 6.5% Western Europe traffic up 2.6% US traffic down 0.1% -12% J M M J S N J M M J S N J M M J S N J M M J S N 2009 2010 2011 2012 Emerging economies continue to lead the way August 2012 data, Source OAG (ASKs data), Airbus
Airbus is the market leader in deliveries Annual deliveries 700 600 500 Airbus Boeing 400 300 200 100 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Largest aircraft manufacturer for the last 9 years Source: Airbus
Airbus order backlog Lessors 888 (20%) Corporate Jet, Private, Military 30 (~1%) North America 509 (12%) Latin America 352 (8%) Africa 79 (2%) Europe & CIS 593 (14%) Middle East 432 (10%) Asia-Pacific 1,498 (34%) Backlog of 4,381 aircraft At end July 2012, Percentages are rounded In addition, undisclosed orders for 2 aircraft Source: Airbus
Since 2000, air travel has grown 53%, with relatively flat growth in fuel demand 160 150 140 130 120 110 100 90 80 Evolution of RPKs, ASKs and jet fuel demand (Base 100 in 2000) Jet fuel demand Traffic growth 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Traffic +53% Fuel +3% Source: IHS CERA, ICAO, OAG, Airbus
High oil prices here for the long-term 140 120 100 80 60 40 20 Brent oil price (current US$ per bbl) History Forecast 0 1980 1990 2000 2010 2020 2030 Source: IHS CERA, Airbus; Average price in the year displayed
A320neo development is on schedule EIS of A320neo in October 2015
A320neo offers environmental benefits Annual fuel savings of 15% equate to: 1.4 m litres of fuel: the consumption of 1000 mid size cars 3,600 tonnes of CO2 the CO2 absorption of 240,000 trees NOx emissions 50% below CAEP/6 500nm more range or 2 tonnes more payload Aircraft noise up to 15dB below Stage IV Significant environmental improvements
Air travel has proved to be resilient to external shocks World annual traffic (RPKs - trillions) Oil Crisis Oil Crisis Gulf Crisis 5.0 Asian Crisis WTC Attack SARS Financial Crisis 4.0 +53%* 3.0 2.0 1.0 0.0 1970 1975 1980 1985 1990 1995 2000 2005 2010 *Since 2000 Source: ICAO, Airbus
Main drivers of traffic and fleet growth More people, bigger cities, more wealth Emerging markets, more first time flyers and a growing middle class Growing tourism and internationalisation will stimulate demand More liberalisation to come, particularly in Asia, Africa and Latin America Replacement of less eco-efficient aircraft, 2/3 of existing fleet will be replaced Low cost model set to grow in Asia-Pacific and Africa Growth in the number of Aviation mega-cities driving demand for VLAs
Emerging economies drive strong travel growth 10 Trips* per capita - 2011 1 United Kingdom Germany France USA 0.1 India 0.01 China China & India Average 2011 China & India Average 2031 China & India average propensity to travel 4.6x In 2031 vs 2011 0.001 0 20,000 40,000 60,000 80,000 100,000 120,000 2011 nominal GDP per capita ($US) * Passengers originating from respective country Source: Sabre (annualized September 2011 data), IHS Global Insight, Airbus
Asia-Pacific airlines to lead in world traffic by 2031 World Traffic by airline domicile (RPK billions) 0 1,000 2,000 3,000 4,000 5,000 % of 2011 world RPK 20-year growth % of 2031 world RPK Asia-Pacific 2011 traffic 2012-2031 traffic 28% 5.4% 32% Europe 27% 4.1% 24% North America 27% 3.3% 20% Middle East 7% 7.3% 11% Latin America CIS 20-year world annual traffic growth 4.7% 5% 3% 5.9% 5.4% 6% 4% Africa 3% 5.0% 3% Source: Airbus
Domestic PRC and Domestic India lead the growth in RPKs 2011 to 2031 Largest 20 flows in 2031, by RPK (billion) Domestic PRC 2011 traffic 2012-2031 traffic Domestic USA Intra Western Europe Western Europe - USA Domestic India Western Europe - South America Asia - PRC Intra Asia Asia - Western Europe Domestic Brazil Western Europe - Middle East Indian Sub Continent - Middle East Western Europe - PRC Central Europe - Western Europe Domestic Asia Western Europe - North Africa Asia - Middle East PRC - USA Japan - USA Domestic Russia 0 500 1,000 1,500 2,000 2012 2031 CAGR 7.0% 2.2% 3.1% 3.7% 9.9% 5.1% 6.5% 6.0% 4.1% 6.5% 5.4% 6.5% 5.7% 5.6% 5.4% 5.2% 5.6% 6.2% 3.7% 5.0% 2031 Share of World traffic 10.4% 10.4% 7.5% 5.3% 2.9% 2.3% 2.2% 2.2% 2.1% 2.1% 2.0% 1.9% 1.9% 1.9% 1.8% 1.5% 1.5% 1.4% 1.3% 1.3% Source: Airbus
42 cities in the world handle more than 10,000 long haul passengers per day, 2011 cities with more than 10,000 daily long-haul passengers > 90% of long-haul traffic on routes to/from/via 42 cities 42 Aviation Mega-cities (2011) Long-haul traffic is concentrated on a few main aviation centres Traffic as of month of September; Source: Airbus Long haul traffic: flight distance >2,000nm, excl. domestic traffic;
and by 2031 it will be over 90 2031 cities with more than 10,000 daily long-haul passengers > 95% of long-haul traffic on routes to/from/via 92 cities 92 Aviation Mega-cities (2031) Long-haul traffic is concentrated on a few main aviation centres Traffic as of month of September. Source: Airbus Long haul traffic: flight distance >2,000nm, excl. domestic traffic;
The 80 th A380 was delivered to SIA on July 31 st 2012 81 A380 deliveries to end August
A380s link the worlds Aviation Mega-cities Top 10 A380 airports ranked by weekly departures 140 120 100 80 60 Air France China Southern Emirates Korean Air Lufthansa Malaysia Airlines Qantas Singapore Airlines 40 20 0 Dubai Singapore Frankfurt London (LHR) Paris (CDG) Sydney Hong Kong Seoul (ICN) New York (JFK) Tokyo (NRT) Over 100 flights per day carrying more than 1m passengers per month A380 weekly departures: Week 33 August 2012 - Source: OAG
An A380 takes off or lands every 7 minutes Carrying more passengers in more comfort to more and more destinations EK Photo credit Markyharky
Air travel remains a growth market 14 12 World annual RPK (trillion) ICAO total traffic Airbus GMF 2012 2021-2031 4.4% 20-year world annual traffic growth 4.7% 10 8 2011-2021 5.1% 6 4 2 Air traffic has doubled every 15 years Air traffic will double in the next 15 years 0 1971 1981 1991 2001 2011 2021 2031 Source: ICAO, Airbus
Demand for over 27,000 new passenger aircraft Fleet size 35,000 30,000 + 3.8 % per annum 32,551 25,000 16,995 Growth 20,000 15,000 15,556 New aircraft 27,347 10,000 10,352 Replaced 5,000 0 5,204 Beginning 2012 2031 Stay in service Passenger aircraft above 100 seats Source: Airbus
Single-aisle: 69% of units; Twin-aisle: 44% of value 20,000 16,000 20-year new deliveries of passenger and freighter aircraft GMF 2011 GMF 2012 12,000 8,000 4,000 0 % units Single-aisle & Small jet freighters Small-twin aisle & Regional freighters Intermediate twin-aisle & Long range freighters Large aircraft & Large freighters 69% 17% 8% 6% % value 40% 27% 17% 16% Passenger aircraft ( 100 seats) and jet freight aircraft (>10 tons) Source: Airbus
Strong open demand for A320ceo and A320neo Single-aisle aircraft in-service 30,000 25,000 20,000 15,000 3,210 12,570 Open Demand 10,000 5,000-6,510 6,950 12,160 8,360 4,480 Beginning 2012 Fleet in 2021 Fleet in 2031 Backlog Stay-inservice from today s fleet A320neo will continue to build on success of the A320 Family Source: Ascend, Airbus Page 28
Summary Strong growth in passenger traffic resilient growth through in a turbulent economy Demand for over 28,000 new aircraft by 2031 ~27,300 passenger aircraft and nearly 900 freighter aircraft Replacement of ageing fleets 20 year demand for more than 10,000 passenger aircraft for replacement, largely in the single-aisle segment A quarter of the demand for twin-aisle aircraft demand for nearly 7,000 small and intermediate twin-aisle aircraft VLA demand driven by aviation mega-cities more than 90% of all long-haul passengers will fly to, from or through these cities
Global Market Forecast 2012-2031 Presented by: CHRIS EMERSON SVP, Future Programmes & Market Strategy
Aviation is a major driver of the world economy 2,681,000,000 passengers carried in 2010 $5.3 trillion worth of cargo shipped by air in 2010 2% of global man-made CO 2 emissions come from aviation Globally contributes 56.6 Job supported World-wide million $2.2 trillion Aviation s global economic impact 19th If aviation was a country ranked by GDP Source: ATAG
Despite economic uncertainties, the world traffic continued to post strong growth Month 200X World annual traffic (RPKs - trillions) Oil Crisis Oil Crisis 5.0 Gulf Crisis Asian Crisis WTC Attack SARS Financial Crisis 4.5 4.0 +53%* 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: ICAO, Airbus * since 2000
Month 200X and is expected to remain resilient in the future World annual RPK (trillion) 14 12 ICAO total traffic Airbus GMF 2012 2021-2031 4.4% 20-year world annual traffic growth 4.7% 10 8 2011-2021 5.1% 6 4 2 Air traffic has doubled every 15 years Air traffic will double in the next 15 years 0 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031 Source: ICAO, Airbus
Economy spending less time in recession even through recent crises % of time spent in recession at world level 45 40 35 30 25 20 15 10 5 0 1919-1939 1940-1962 1963-1985 1986-2011 Source: IHS Global Insight, Airbus
Short term economic growth will be driven by emerging markets Month 200X 2012 and 2013 real GDP forecast by region 9% 8% 7% 2012 2013 6% 5% 4% 3% 2% 1% 2013 World Average 2012 World Average 0% -1% Europe North America Asia* Middle East Latin America Pacific CIS Africa Indian Sub Continent PRC Source: IHS Global Insight (August 2012), Airbus *- Excluding Indian Sub-continent and PRC
Emerging regions will represent a larger share of traffic in 2031 Month 200X World annual RPK (share of total), by type of flow 14 Advanced - Advanced Advanced - Emerging Emerging - Emerging 12 10 38% 20-year annual traffic growth 6.6% 8 6 4 2 0 27% 28% 45% 30% 32% 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 20-year annual traffic growth 5.1% 20-year annual traffic growth 2.9% Traffic with emerging markets represent 55% of traffic today, 68% in 2031 Source: Airbus
... driving the center of gravity of traffic to the south and east Geographic centre of gravity of departing/arriving/connecting passengers per city 1971 1991 2011 1981 2001 2021 2031 Source: OAG, Airbus Traffic as month of September; estimates for historic passenger derived from offered seats; respective centres of gravity as median of city coordinates weighted by passenger traffic
Traffic to, from and within USA and Western Europe are the largest... 2011 RPK from/to/within traffic Month 200X Asia-Pacific* USA Western Europe Japan Caribbean Canada Pacific Australia Central America Asia Russia South America Middle East 3% 4% 5% 6% 7% 8% Size of the bubble is proportional to 2011 RPK traffic 2011-2031 RPK traffic CAGR Source: Airbus *-Asia-Pacific is comprised of PRC, Asia, Pacific, Japan, India Sub-continent and Australia/NZ CIS PRC Indian Sub- Continent
Traffic to, from and within USA and Western Europe are the largest... 2011 RPK from/to/within traffic Month 200X Asia-Pacific* Western Europe USA Asia South America Middle East PRC Indian Sub- Continent Japan Caribbean Canada Pacific Australia Central America Russia 3% 4% 5% 6% 7% 8% Size of the bubble is proportional to 2011 RPK traffic 2011-2031 RPK traffic CAGR Source: Airbus *-Asia-Pacific is comprised of PRC, Asia, Pacific, Japan, India Sub-continent and Australia/NZ CIS
Visiting friends and relatives is a key driver of traffic growth 2010 world inter-regional migration corridors per sending and receiving region (million persons) North America Africa Latin America >215M live outside their country of birth 700K foreign students studying in the US Asia Europe Africa Asia Visiting friends and relatives remained much more stable than business travel North America North America and Europe as largest destinations of immigration Asia-Pacific growing as a destination for immigrants Latin America Europe Source: UN Population Division, Airbus Region definition according to United Nations; Asia including Oceania, countries of the Middle East and countries of CIS, Europe including Russia
World urban population expected to rise from 3.5 billion people today up to 5 billion by 2030 10 9 8 7 6 5 4 3 2 1 0 Population (billions) Urbanisation rate History Forecast Urban population Rural population Urbanisation rate 70% 60% 51% 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Urban population: 1.3B 2.3B 3.5B 5.0B 6.4B Source: UN Population Division, Airbus
Urbanisation and subsequent wealth generation leads to more flying Propensity to travel per country Month 200X 10.00 Trips per capita (logarithmic scale) 1.00 0.10 0.01 0.00 0% 20% 40% 60% 80% 100% % of population in Urban centers Source: Sabre, UN Department of Economic and Social Affairs, Airbus
Leading to a larger Global Middle Class Global Middle Class* (Millions of people) 5,000 5,048 739 X 2 4,000 3,000 2,000 1,000 0 2,101 419 3,413 560 X 5 3,377 1,889 Other Asia-Pacific North America Europe & CIS 746 265 263 254 671 701 678 2011 2021 2031 7,700 8,400 World population 7,000 30% 44% 60% % of World population * Households with daily expenditures between $10 and $100 per person (at PPP) Source: Kharas and Gertz, Airbus Page 43
Airlines are becoming more efficient Unit cost (cents/rpk in 2011 US$) 25 20 15 History Forecast Other costs Fuel cost 10 5 0 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031 % cost from fuel 29% 13% 13% 33% 36% 40% Source: ICAO, EIA, HIS Global Insight, Airbus
The air cargo industry today ensures economic growth through timely delivery worth of cargo shipped by air in 2011 7% Percentage growth of 2011 traffic above 2008 peak $$$$$ $5.3 trillion worth of cargo shipped by air in 2010 >1,600 Aircraft 10t, performing cargo only operations 50% North America represents 50% of the dedicated cargo fleet in service >200 Airlines Performing freight or freight and passenger operations Source: ATAG, Seabury, ASCEND, Innovata, OAG, US DOT RITA, Airbus
Like the passenger market, fastest growth from traffic between and within emerging regions Freight traffic growth (billions of FTKs) 600 500 Developed to Developed Emerging to Emerging Emerging to Developed Developed to Emerging 20-year world annual FTK growth 4.9% Growth Rate 2011-2031 3.2% 400 5.7% 300 Historical Future 200 5.0% 100 5.2% 0 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 Source: Seabury, Airbus
Demand for 851 new freighter aircraft, largely destined for North America, Asia-Pacific and Europe Total Aircraft demand by New and Converted 1,400 1,200 1,000 Conversions New Freighters New Aircraft demand by Region Latin America Middle 3% East 7% Africa 2% CIS 1% 800 847 600 423 Europe 16% North America 41% 400 200 523 411 440 0 Small jets Regional & Long range Large Asia- Pacific 30% Source: Airbus
taking all of these factors into account and many more A 20 year aircraft demand and passenger traffic forecast Market Research Trends Analysis Consumer & Travel Surveys Tourism Migration Traffic flows Passenger demands Airlines Business Models Operations Competition Geopolitics Governments & Regulators Liberalization/ deregulation Investments and constraints Geopolitics Forecast Traffic Economics and Econometrics Fuel costs Yields Load Factors Trade and Value of Goods Network Development Route planning Origin and destination demand Population centers Fleet trends Aircraft economics Utilization Fleet age and retirements
Details behind the forecast 157 global traffic flows >10.000 country pairs >200.000 O&D city pairs >1.000.000 O&D city pair routings Macro traffic forecast Micro network forecast
Summary 20 Year Aircraft Demand North Latin Asia-Pacific Middle Europe Africa World CIS America America East 30 (Thousands) 25 Africa CIS Latin America Middle East 20 2031 RPKs (Trillions) 14 12 10 North America 8 15 6 Europe 10 4 28,200 1,240 1,960 6,200 5,840 9,870 2,110 980 Aircraft Aircraft Aircraft 5 Traffic by domicile: Source: Airbus >12 20% 24% 32% 11% 3%trillion 4% 5% of of2031 2031RPKs World Worldin RPKs 2031 AsiaPacific 2 0 0 Aircraft Demand RPKs