Flying on demand 2014 2033
003 004 Introduction 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 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!
005 006 01 P.007 Executive summary 02 Demand for air travel P.015 Demand by region P.053 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 05 03 P.029 04 P.041 Traffic forecast Demand for passenger aircraft Demand for freighters P.083 Summary & methodology P.89 06 07
01 Executive summary
008 009 Passenger traffic growth next 20 years Passenger deliveries (>100 seats) 4.7% CAGR* 2014-2033 30,555 Freight traffic growth 4.5% CAGR New freighters Passenger fleet 2014-2033 803 2014 16,855 Freighter fleet 2033 34,818 +17,963 Passenger & new freighter deliveries 2014-2033 31,358 2014 1,605 2033 2,645 +1,040 2013-2023 2023-2033 2013-2033 TRAFFIC WILL DOUBLE IN THE NEXT 15 YEARS Source: ICAO, Airbus GMF 2014 5.2% 4.2% 4.7% World annual RPK* (trillion) 16 14 ICAO total traffic Airbus GMF 2014 12 10 8 6 4 2 0 Air traffic has doubled every 15 years Air traffic will double in the next 15 years 1973 1978 1983 1988 1993 1998 2008 2013 2018 2023 2028 2033 * Revenue Passenger Kilometres
010 011 Traffic > double Pax fleet > double Demand for 31,358 New pax & freight aircraft Value of demand $4.6 trillion 2014-2033 NEW DELIVERIES 31,358 SINGLE-AISLE: 70% OF UNITS; WIDE-BODIES: 55% OF VALUE Source: Airbus 40,000 35,000 DEMAND FOR OVER 31,350 NEW AIRCRAFT Source: Airbus Passenger and freighter aircraft 37,463 20-year new deliveries of passenger and freighter aircraft 24,000 20,000 30,000 25,000 20,000 +3.8% per annum 18,460 19,003 Growth New aircraft 31,358 16,000 12,000 8,000 15,000 10,000 5,000 0 Beginning 2014 12,355 Replaced 6,105 Stay in service & converted 2033 4,000 0 % units % value Single-aisle Small twin-aisle Intermediate twin-aisle 70% 16% 9% 45% 26% 18% Very Large Aircraft 5% 11% Passenger aircraft ( 100 seats) and jet freight aircraft (>10 tons) Passenger aircraft 100 seats, Freighter aircraft 10 tonnes
013 NEW AIRCRAFT DEMAND PASSENGER AND FREIGHTER 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% Most deliveries to go to Asia Pacific, 39% or 12,253 passenger aircraft North America and Europe 38%, or 11,700 aircraft deliveries DEMAND FOR MORE THAN 31,000 NEW 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 30,555 New deliveries 31,358 803 12,355 aircraft will be retired to be replaced by more eco-efficient type Asia/Pacific Alone to take 39% deliveries N.America/ Europe 38% deliveries Passenger Fleet Remarketed & stay in service 4,263 Converted 1,555 Freighter Fleet 1,555 Pax aircraft Converted to freighters 11,037 Pax aircraft Replaced by more Eco-efficient types Retired 11,037 1,318 12,355 Passenger aircraft ( 100 seats) and jet freight aircraft (>10 tons)
02 Demand for air travel
016 017 Key drivers for air traffic growth: Economic growth rates in emerging regions/ countries will outstrip the developed. Economic growth Increasing urbanisation Emerging markets do not only include Asia/ Pacific, but also Latin America, Africa and the Middle East. Expanding middle class Rise in migration, tourism A ten percentage point increase in passengers from emerging countries in the last 10 years: more to come. and international students 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 (million) 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 1995 2000 2005 2010 2015 2020 History Forecast INTERNATIONAL TOURIST ARRIVALS EXPECTED TO REACH 1.6 BILLION PEOPLE BY 2020 Source: World Tourism Organization, Airbus
018 019 THE WORLD IS MORE URBANISED Source: UN population division, Airbus GLOBAL MIDDLE CLASS TO MORE THAN DOUBLE Source: Kharas and Gertz, Airbus World population and share of urban agglomerations evolution (billion) Other North America 10 9 8 7 6 5 4 3 2 1 0 80% 70% 60% 50% 40% 30% 20% 10% 0% Asia-Pacific Europe & CIS World Population 2013 2023 2033 7,100 7,900 8,500 33% 48% 63% Middle class as % of world population 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 5,375 Rural Urban Urban share x 2.3 MORE AND MORE AIR PASSENGERS ORIGINATING FROM EMERGING COUNTRIES Source: Sabre GDD (September data of each year), Airbus 3,740 2033 775 Share of international trips tickets issued in emerging countries 40% 35% 30% 2,356 2023 596 3,675 25% 20% 2013 2,186 x 3.8 15% 446 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Global Middle Class* (Millions of people) *Households with daily expenditures between $10 and $100 per person (at PPP) 967 264 679 261 252 697 673
020 021 MOST OF THE NETWORK FRAGMENTATION IS DRIVEN BY LCCS AND MIDDLE EAST CARRIERS Source: OAG Network development 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 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 Much of the fragmentation has been driven by LCCs and Middle Eastern airlines LCC Middle East Others 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 CODE SHARE GENERALISATION Source: OAG, September month Evolution of monthly number of flights, 1996-2013 1,400, 000 1,200, 000 1,000, 000 Code share flights Operating flights 800,000 600,000 400,000 200,000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
022 023 > 50,000 daily long-haul passengers > 20,000 daily long-haul passengers > 10,000 daily long-haul passengers Cities with more than 10,000 daily long-haul passengers, Long-haul traffic: flight distance >2,000nm, excl. domestic traffic Source: Airbus 2013 AVIATION MEGA-CITIES Source: Airbus Market Research and Forecasts 2033 AVIATION MEGA-CITIES Source: Airbus Market Research and Forecasts 42 AVIATION MEGA-CITIES 91 AVIATION MEGA-CITIES 0.8M 2.2M DAILY PASSENGERS: Long Haul traffic to/from/via Mega Cities DAILY PASSENGERS: Long Haul traffic to/from/via Mega Cities 94% 99% OF LONG-HAUL TRAFFIC ON ROUTES to/from/via 42 cities OF LONG-HAUL TRAFFIC ON ROUTES to/from/via 91 cities
024 025 Productivity up, Environmental impact down 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 x2.4 x1.8 MOVEMENT PER AIRPORT AIRPORT CONNECTIVITY Is there a limit to productivity improvements? Still some margin regarding airport use AIRPORT MOVEMENTS Source: OAG, Airbus AIRPORT CONNECTIVITY Source: OAG, Airbus Avg. number of destinations per airport Avg. number of movements per airport 20,000 14 18,000 16,000 12 14,000 10 12,000 10,000 8,000 x 2.4 8 6 x 1.8 6,000 4 4,000 2,000 2 0 0 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
026 027 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 CO 2 is also down 31% OFFERED SEATS PER AIRCRAFT Source: OAG, Ascend, Airbus FUEL CONSUMPTION Source: ICAO, IATA, Airbus Avg. number of offered seats per aircraft (000) Kilograms per passenger per trip (avg.) 250 120 200 150 + 43% 100 80-31% 60 100 40 50 20 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 OFFERED ASKS PER AIRCRAFT Source: OAG, Ascend, Airbus C0 2 EMISSIONS Source: ICAO, IATA, Airbus Kilograms per passenger per trip (avg.) 350 + 111% 300 250 200-31% 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
03Traffic forecast
030 031 Passenger traffic forecast AIR TRAVEL HAS PROVED TO BE RESILIENT TO EXTERNAL SHOCKS Source: ICAO, Airbus 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 7 th 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. 2013-2033 4.7% PER ANNUM 73% GROWTH DESPITE MULTIPLE CRISES OVER THE LAST TEN YEARS World annual traffic (RPKs - trillions) 6.0 5.0 Oil Crisis Oil Crisis Gulf Crisis Asian Crisis 9/11 SARS 4.0 73% 3.0 2.0 1.0 0.0 1963 1968 1973 1978 1983 1993 1998 2003 2008 2013 Financial Crisis
032 033 DOMESTIC PRC WILL BE THE LARGEST O&D TRAFFIC FLOW IN 2033 Source: Airbus GMF 2014 DOMESTIC INDIA WILL BE THE FASTEST O&D TRAFFIC FLOW Source: Airbus GMF 2014 2,000 400 1,500 1,000 500 8.4% Billions RPK _ Domestic PRC Domestic USA Intra Western Europe Western Europe - USA Domestic Asia Emerging Asia Emerging - Western Europe Domestic India India Sub-Continent - Middle East Western Europe - Middle East Domestic Brazil Western Europe - PRC PRC - USA Western Europe - South America South America - USA Asia Emerging - PRC Billions RPK Central Europe - Western Europe 8.9% India Sub-Continent - USA Asia Emerging - Middle East Asia Advanced - Asia Emerging Sub Sahara Africa - Western Europe Domestic India Indian Sub - PRC North Africa - PRC Sub Sahara Africa - PRC Indian Sub - South America Asia Emerging - Indian Sub Middle East - Russia Asia Emerging - South America Sub Sahara Africa - Middle East CIS - PRC PRC - Russia Middle East - South America Central Europe - Middle East Middle East - PRC Asia Emerging - PRC Intra Asia Emerging Asia Advanced - Indian Sub Indian Sub - Russia CIS - Middle East Middle East - South Africa 8.3% 7.8% 7.0% 9.5% 8.4% 8.6% 8.0% 8.2% 7.6% 7.4% 7.9% 7.8% 7.5% 7.6% 7.2% 7.5% 9.5% 300 200 7.0% 100 _
034 035 ASIA-PACIFIC TO LEAD IN WORLD TRAFFIC BY 2033 Source: Airbus GMF 2014 RPK traffic by airline domicile (billions) 0 1,000 2,000 3,000 4,000 5,000 % SHARE OF 2013 WORLD RPK 20-YEAR CAGR % SHARE OF 2033 WORLD RPK Asia-Pacific 2013 traffic 2012-2033 traffic 30% 5.7% 36% Europe 25% 3.6% 20% North America 24% 2.9% 17% Middle East 8% 7.1% 13% Latin America 5% 5.4% 6% CIS 4% 5.4% 5% Africa 3% 4.7% 3%
036 037 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. EMERGING REGIONS WILL ACCOUNT FOR THE LARGEST SHARE OF ORIGIN AND DESTINATION TRAFFIC WORLDWIDE Source: ICAO, Sabre GDD, Airbus GMF 2014 World annual RPK (trillion) 16 ICAO total traffic Airbus GMF 2014 14 12 Advanced- Advanced CAGR 2.6% Emerging- Advanced CAGR 5.0% Emerging- Emerging CAGR 6.8% 28% 10 Advanced-Advanced 8 34% 6 4 42% Advanced-Emerging 2 33% Emerging-Emerging 38% 25% 0 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
038 039 Freight traffic forecast 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 2013 GMF 2014 GMF FREIGHT FORECASTS REVISED DOWN SLIGHTLY Source: Seabury, Airbus World trade evolution (billion 2010 $US) WORLD TRADE FORECASTS HAVE BEEN REVISED DOWNWARDS COMPARED TO PREVIOUS GMF Source: IHS Global Insight, Airbus 60,000 50,000 2012-2032 +4.6%/year 40,000 30,000 20,000 10,000 2012-2032 +4.3%/year 0 2000 2002 2004 2006 2008 2010 2012 2014 2018 2020 2022 2024 2026 2028 2030 2032
04 Demand for passenger aircraft
043 Demand 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 LESS THAN 2,000 NM
044 045 20-YEAR GROWTH IN AVERAGE SINGLE-AISLE SEATS +14% DENSIFICATION OF SINGLE-AISLE AIRCRAFT Source: OAG, Airbus Market Research and Forecasts Average seats per single-aisle flight 160 155 150 145 140 135 130 125 120 1993 1998 2008 2013
200 400 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 3,000 3,200 3,400 3,800 4,000 4,200 4,400 4,600 4,800 5,000 5,200 5,400 5,600 5,800 6,000 6,200 6,400 6,600 6,800 7,000 0 046 047 CLEAR SHIFT IN AIRCRAFT-TYPE DEPLOYMENT AROUND 2,000 NAUTICAL MILES Source: OAG, Airbus Market Research and Forecasts Regional Single-aisle Twin-aisle VLA 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% GCD Range (nm)
048 049 A380 THE LARGER THE AIRCRAFT THE HIGHER THE FOCUS ON AVIATION MEGA-CITIES Source: OAG (Sept 2013) From/To/Between AMC 777-300/300ER Between secondary cities 787 747-400/8 All Widebody Aircraft 777-200/200ER/ -200LR 767 A330 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
050 051 New deliveries by region CIS GLOBAL NETWORK 32% 7% 61% NORTH AMERICA 1% 85% 14% EUROPE 3% 79% 18% 13% 2% 85% ASIA PACIFIC 10% LCCs 1% 89% LATIN AMERICA 1% 79% 20% AFRICA 3% 75% 22% 46% MIDDLE EAST 16% 38% 29% 5% 66% OTHERS* 23% 2% 75% New deliveries 30,555 aircraft 1,228 SA TA 7,256 22,071 VLA New deliveries by neutral category 7,228 6,547 Fleet evolution 17,963 Growth Market value US$ 4.4 trillion 3,364 3,713 10% 1,219 2,439 2,514 1,405 898 1,228 16,855 12,592 Replaced 43% 47% 100 125 150 175 210 250 300 350 400 VLA US$ 2.1 trillion US$ 1.9 trillion US$ 0.4 trillion Beginning 2014 4,263 2033 Stay in service & remarketed
05 Demand by region
054 055 Asia- Pacific 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. NEW DELIVERIES 12,253 Seats and flights offered by the LCCs have increased dramatically since 2000. 38% 62% 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. REPLACEMENT FOR GROWTH Domestic and intraregional 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. 34% WILL BE WIDE-BODY WITH MANY OF THESE TO BE USED ON MEDIUM RANGE OPERATIONS, AS WELL AS LONG-HAUL.
056 057 Results RPK traffic growth from/to Asia-Pacific by region 2023-2033 In 2014 5,083 Beginning 2014 * Passenger aircraft 100 seats ** 2013-2033 CAGR
058 059 Europe 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. NEW DELIVERIES 6,167 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. 49% 51% REPLACEMENT FOR GROWTH 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%.) 79% WILL BE SINGLE-AISLES DUE TO EUROPEAN POPULATION LANDSCAPE
060 061 Results RPK traffic growth from/to Europe by region
062 063 North America 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%. NEW DELIVERIES 5,533 65% 35% REPLACEMENT 85% FOR GROWTH 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
064 065 RPK traffic growth from/to North America by region Results
066 067 NEW DELIVERIES 2,148 20% 80% REPLACEMENT FOR GROWTH 62% Middle East WILL BE WIDE-BODIES DUE TO THE POSITION THE REGION IS CREATING FOR ITSELF AS A MAJOR GLOBAL HUB 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 shorthaul markets has increased significantly, reaching nearly 25% today.
068 069 Results RPK traffic growth from/to Middle East by region
070 071 Latin America & Caribbean 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. NEW DELIVERIES 2,263 33% 67% REPLACEMENT FOR GROWTH 79% 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).
072 073 Results RPK traffic growth from/to Latin America by region
074 075 NEW DELIVERIES CIS 1,218 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. THE MAJORITY WILL BE FOR GROWTH 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%. 85% WILL BE SINGLE-AISLES 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. THE CIS PASSENGER FLEET IS FORECAST TO GROW 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. 132% 2,044 AIRCRAFT TO
076 077 Results RPK traffic growth from/to CIS by region 1,036 20 year new deliveries 1,218
078 079 Africa 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, intraregional 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 intraregional traffic, the low cost model could play a bigger role in Africa s aviation future. NEW DELIVERIES 973 8% REPLACEMENT 75% 92% FOR GROWTH More growth expected on domestic and intra-regional flying than inter-regionally, 6.1% vs 5.5% CAGR. WILL BE SINGLE-AISLES FLEET SET TO GROW 146 % BY 2033
080 081 Results RPK traffic growth from/to Africa by region
06 Demand for freighters
084 085 North America fleet is mainly a replacement market Asia-Pacific fleet is set to triple as growth market THE FUTURE FREIGHTER FLEET DISTRIBUTION WILL REFLECT THE GROWING INFLUENCE OF EMERGING MARKETS Source: Airbus GMF 2014, ASCEND Freight forecast 2014 977 775 North America 452 337 170 67 798 Europe & CIS Middle East 303 49 86 162 74 Africa Asia-Pacific Latin America Freight traffic growth 4.5% CAGR* World fleet evolution 2014: 1,605 2033: 2,645
086 087 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. FREIGHTER DELIVERIES WILL EXCEED 2,300 AIRCRAFT IN THE NEXT 20 YEARS Freighter deliveries over the next 20 years 1,500 New freighters Conversions 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. 1,000 1,145 414 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. 1,555 Converted 500 612 601 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. 803 New build 731 389 Airbus forecasts demand for more than 800 new build freighters over that time 212 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). Fleet to almost Double 0 Small 10t < payload < 30t Mid-Size 30t < payload < 80t Large payload < 80t
07 Summary & methodology
090 091 Summary of results NEW PASSENGER AIRCRAFT DELIVERIES BY REGION CONVERTED FREIGHT AIRCRAFT DELIVERIES BY REGION Africa Asia- Pacific CIS Europe Lat. & Caribb. Middle East North America TOTAL 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 39 311 7 81 82 6 86 612 Small Twin-Aisle Intermediate Twin-Aisle Very Large Aircraft 158 2,510 132 754 349 481 569 4,953 54 1,055 25 368 102 500 199 2,303 27 622 25 150 28 341 35 1,228 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 TOTAL 973 12,253 1,218 6,167 2,263 2,148 5,533 30,555 NEW FREIGHT AIRCRAFT DELIVERIES BY REGION NEW PASSENGER & FREIGHT AIRCRAFT DELIVERIES BY REGION Africa Asia- Pacific CIS Europe Lat. & Caribb. Middle East North America TOTAL Africa Asia- Pacific CIS Europe Lat. & Caribb. Middle East North America TOTAL Small - - - - - - - - Single-Aisle 734 8,066 1,036 4,895 1,784 826 4,730 22,071 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 Small Twin-Aisle Intermediate Twin-Aisle Very Large Aircraft 162 2,535 134 763 356 486 709 5,145 57 1,147 39 410 125 543 320 2,641 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 Passenger aircraft 100 seats and freight aircraft 10 tons
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