Jetrader - September/October 2010 - 13

p as Economies Rebound
Chart 1: Airlines will need 30,900 new airplanes valued at $3.6 trillion
Airplane deliveries: 30,900
2010 - 2029

Market value: $3.6T
2010 - 2029

25,000 Market value, $ billions Airplane units 20,000 15,000 10,000 5,000 0 1,920 21,160 regional jets single-aisle 6% 69% 7,100 twin-aisle 23% 720 large 2%

1,800 1,600 1,200 800 400 0 $60B regional jets 2% $1,680B single-aisle 47% $1,630B twin-aisle 45% $220B large 6%

emerging markets, from low-cost carriers, and for replacements. That’s really what’s been driving overall demand for single aisles. To a minor extent, fuel price has forced small regional jets to become no longer economically viable, and as a result, there’s been some up gauging in that market to single-aisle airplanes.”

Asia, China Lead Regional Growth
The CMO expects the Asia-Paciﬁc region will have the most robust market gains, led by China. (See Chart 3, page 14). “Today, about one-third of all airline trafﬁc touches the Asia-Paciﬁc region, and as a result of this market’s growth, by 2029 almost 45 percent of all trafﬁc will be to, from or within the region,” said Tinseth. The region’s airlines will also be the largest buyer of twin-aisle airplanes— about 40 percent of the total demand. The Middle East, which has been one of air travel’s fastest growing regions, represents another very strong market. Airlines there have been growing rapidly by taking advantage of geography, demographics, airplane technology, and well-coordinated growth and investment plans. The North American and European markets will see substantial demand for replacement airplanes as they retire aging, less-efﬁcient jets. Robust growth in emerging markets with dynamic populations and growing incomes will lead toward a more balanced airplane demand worldwide.

Improved Forecast – Boeing predicts that over the next 20 years, single-aisle airplanes will make up the bulk of airplane deliveries at 21,160 units valued at more than $1.6T. This is up from last year, particularly due to strong domestic growth in emerging Asian nations. The forecast includes the introduction of the CSeries in 2015 and the C919 in 2018. Airlines will continue to augment their ﬂeets with midsize twin-aisle airplanes (7,100) to serve fragmenting long-haul markets such as the trans-Atlantic and trans-Paciﬁc, as well as higher density shorter routes, such as those within Asia. (Boeing graphic)

Chart 2: Emerging business models are growing and gaining market share
Air traffic, RPKs (billions)
14,000

12,000

38%
10,000

Emerging business models

8,000

Passenger Preference Pilots Progress
25% 14% 86% 62% Network & other

6,000

4,000

2,000

75%

1990

2009

2029

*Emerging business models include LCCs, 6th Freedom Gulf carriers and Chinese carriers

Robust Growth – Expansion of low-cost carriers, Sixth Freedom Gulf operators and Chinese airlines are expected to push those business models from a quarter share of today’s market to nearly 40 percent by 2029. (Boeing graphic)

The new CMO expects airlines will grow by responding to their passengers’ preference for more ﬂight choices, lower fares and direct access to a wider range of destinations. Air carriers will focus on offering more ﬂights using more efﬁcient airplanes, rather than on using signiﬁcantly larger airplanes. As a result, the large-airplane market (747 and larger) is small at 720 aircraft. But it remains an important market segment with a value of $220 billion. It is a market largely for replacement of existing airplanes, not Jetrader 13

Jetrader - September/October 2010

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