Jetrader - September/October 2012 - 13

Chart 3: Global Diversity
If there’s one thing that group director and lead forecaster Mike Warner and team can’t stress enough from their research, it’s the incredible resiliency of the air travel market. “There’s a lot of uncertainty now. In Europe, it’s the economic crisis. Globally, high fuel prices have impacted our airline customers. It’s meant slower economic growth than we’ve see on average. Yet, and despite the economic headwinds, trafﬁc has been incredibly resilient. It’s growing at 6.5 percent this year, which is above the long-term trend. That speaks to a lot of what’s going on in the market, and why we think air travel will continue to grow,” Warner told Jetrader. He said emerging markets and new airline business models—like low-cost carriers and the Middle East’s Sixth Freedom carriers (Emirates, Etihad and Qatar Airways)—get a lot of the credit. “The industry is different than it was 10 or 20 years ago. It’s more geographically diverse, which is good. While there may be slowing economic growth in one region, others pick up the slack. We’re also beneﬁting from demographic issues, like rising middle classes in many parts of the world. And because air travel has become so affordable and plays such a vital role in our lives, people still travel even when economic growth is slow or consumer conﬁdence starts to fall. All of these things speak to why things are more resilient,” Warner explains.
Boeing’s latest 20-year outlook ﬁnds Asia Paciﬁc as the primary growth driver, followed by Europe, North America, Latin America and the Middle East. Estimates reﬂect unique market characteristics. For example, demand in North America and Europe concentrates on replacement of single-aisle jetliners. Asia Paciﬁc and the Middle East, in contrast, favor business models that rely heavily on twin-aisle airplanes. The increasing geographical diversity underlies manufacturers’ planned expansion and signiﬁcantly increases the industry’s resilience to regional ﬂuctuations. (Source: Boeing)

Global Diversity: Market for new airplanes set to become considerably more geographically balanced

Chart 4: New Freighter Demand
The world’s air freighter ﬂeet is expected to double between 2012 and 2031. Although growth has slowed of late, air-cargo trafﬁc (based on revenue tonne-kilometers) is expected to grow at an average annual rate of 5.2 percent over the next 20 years. Growing world trade, increasing demand for time-sensitive transport and the need to replace aging airplanes will require 2,760 freighter deliveries over the next 20 years. About two-thirds will be P-to-F conversions, and one-third new freighters. (Source: Boeing)

New Freighter Demand: 940 new, 1,820 converted

Model Mix Fine Tuning
After a forecasted surge in single-aisle model demand in the two previous editions, this year’s CMO represents a ﬁne tuning of market needs. The single-aisle marketplace, served by Boeing’s Next-Generation 737, the future 737 MAX and Airbus’ A320 family, will continue to see strong demand, with a forecasted 23,370 deliveries, worth more than $2 trillion by 2031. Widebodies, such as Boeing’s 747-8, 777 and 787 Dreamliner, will account for an anticipated 8,790 new deliveries, worth almost $2.5 trillion dollars. “Up-gauging” will see the total dollar value of deliveries increase as airlines order larger versions of speciﬁc airplane models.

Chart 5: 1977 vs. Today: Top 10 Airlines
Boeing recalled the industry landscape change between the late 1970s and today as part of its 2012 CMO edition. At the time, some 6,500 jetliners—the majority of them single-aisle models, not unlike today’s market, were operating, compared to nearly 20,000 today. With the exception of Boeing, none of the top ﬁve airplane builders of the time are still in business, and Airbus had about a half percent of the in-service ﬂeet, compared to nearly a third today. (Boeing graphic)

Jetrader 13

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Jetrader - September/October 2012

Table of Contents for the Digital Edition of Jetrader - September/October 2012