Growing Horizons Global Market Forecast 2017 - 2036
John Leahy Chief Operating Officer, Customers Global Market Forecast 2017: Highlights
World Fleet Forecast 2016 2036 vs. % change GMF16 2016-2036
RPK (trillions) 7.0 16.5 +3.1% 135%
Passenger Aircraft Fleet 18,890 40,120 +6.4% 112%
New passenger aircraft deliveries 34,166 +1,741
Dedicated Freighters 1,610 2,410 +14.2% 50%
New freighter aircraft deliveries 733 +88
Total New Aircraft Deliveries 34,899 +1,829
2 Notes: Passenger aircraft (≥ 100 seats) | Jet freight aircraft (>10 tonnes) Source: Airbus GMF 2017
20-year demand for almost 35,000 new passenger and freighter aircraft
24,807 single-aisle aircraft +1,277 vs GMF 2016 5.3 8,686 twin-aisle aircraft $US trillion +626
1,406 very large aircraft -74
34,899 new aircraft +1,829
3 Notes: Passenger aircraft (≥ 100 seats) | Jet freight aircraft (>10 tonnes) Source: Airbus GMF 2017
Single-aisle represent 71% of units, and widebodies represent 54% of value
Number of aircraft
30,000
24,810 25,000
20,000
15,000
10,000 8,690
5,000 1,410 0 Single-aisle Twin-aisle Very Large Aircraft
% units 71% 25% 4%
% value 46% 44% 10%
4 Notes: Passenger aircraft (≥ 100 seats) | Jet freight aircraft (>10 tonnes), Rounded figures to the nearest 10 Source: Airbus GMF 2017
Fleet in service evolution
Number of aircraft*
45,000
40,000
35,000 22,030 30,000 Growth 20-year 25,000 34,900 new deliveries
20,000
15,000 12,870 Replacement 10,000 20,500
5,000 7,630 Stay - Beginning 2017 2036 New Deliveries
5 Notes: Passenger aircraft (≥ 100 seats) | Jet freight aircraft (>10 tonnes), Rounded figures to the nearest 10 Source: Airbus GMF 2017 2016 was a good year
Number of countries 142 countries 81% of world population 90 80 78 88% of world GDP 70 64 60
50 42 40
30 20 20
10
0 <0% [0% - 5%] [5% - 10%] >10% % - ASK growth 2015-2016
6 Source: ICAO, OAG, IHS Economics, Airbus GMF
World load factors remain at record levels
World passenger load factor - %
85%
80% 80%
75%
70% 69% 65%
60% 1996 2001 2006 2011 2016
7 Source: ICAO, OAG, IHS Economics, Airbus GMF
Air transport growth is highest in expanding regions Yearly RPK growth 2016 - 2036 Emerging/Developing China India Middle East Rest of Asia Africa CIS 6.4 +5.8 % Latin America billion people Central Europe in 2016
Advanced
Western Europe Israel North America Japan 1 +3.2 % billion people Singapore in 2016 South Korea Australia/New Zealand
8 Source: IHS Economics, Airbus GMF 2017
Middle Class to almost double over the next 20 years
People in Middle Class* (million) Forecast
6,000 4,950 5,000
4,000 3,900
3,000 2,900 3,624 Emerging countries 2,695 1,950 2,000 1,822 1,350 981 1,000 501 322 456 Developing countries 73 144 216 781 828 850 865 859 Advanced countries 0 1996e** 2006 2016 2026 2036
5,820 6,600 7,430 8,200 8,900 World Population (M.) 23% 30% 39% 47% 56% % of world population
Rounded total to nearest 50 9 * Households with yearly income between $20,000 and $150,000 at PPP in constant 2016 prices ** Estimate for 1996 split by region Source: Oxford Economics, Airbus GMF
Almost 50% of world’s private consumption to come from emerging markets
World private consumption (trillion 2010 $US)
90 Forecast
80
70
60 46% 50 Emerging/Developing countries 40 34% 30
20 23% Advanced countries 54% 66% 10 77%
0 1996 2000 2004 2008 2012 2016 2020 2024 2028 2032 2036
10 Source: IHS Economics, Airbus GMF ~60% of international tourists to be transported by air in 2036
International tourist arrivals (million) 2,600 Forecast tourists 2,400 >2.4bn 2,200 2,000
1,800 Tourism by surface 1,600 (Road , Water, Rail) 1,400 1,200 >1.2bn tourists 1,000 Tourism by Air 800 600 400 200 0 2006 2011 2016 2021 2026 2031 2036 Share of tourists travelling by air 48% 51% 54% 57% 59% 61% 62%
11 Source: UNWTO, Sabre GDD, Airbus GMF Low Cost Carrier market penetration has increased significantly since 2006 Low Cost Carrier seats offered on domestic and intra-regional flights (million)
Europe-CIS North America x2.6 38m x1.2 25m Asia-Pacific Middle East x4.8 >39m 2006 2016 2006 2016 x16.4 4m
2006 2016
Latin America Africa 2006 2016 x5.7 0.6m x3.9 9m 2006 2016 2006 2016
12 Source: OAG – September of each year, A i rb us GM F
~30% of the people from emerging countries took a flight in 2016…
2016 trips per capita 10 Africa Asia/Pacific CIS Europe 1 Latin America United States, 2016 1.8 trips per capita Middle East North America
Bubble size proportional to population China, 2016 0.1 0.4 trips per capita India, 2016 0.1 trips per capita
0.01 0 10 20 30 40 50 60 70 80 2016 real GDP per capita (2010 $US thousands at Purchasing Pow er Parity)
13 Source: Sabre, IHS Economics, Airbus GMF 2017
… in 2036, it will be 83%
2036 trips per capita 10 Africa Asia/Pacific CIS Europe United States, 2036 1 2.5 trips per capita Latin America China, 2036 Middle East 1.3 trips per capita North America
Bubble size proportional to population India, 2036 0.1 0.4 trips per capita
0.01 0 10 20 30 40 50 60 70 80 2036 real GDP per capita (2010 $US thousands at Purchasing Pow er Parity)
14 Sources: Sabre, IHS Economics, Airbus GMF 2017
Air travel has proved to be resilient to external shocks
World annual traffic (trillion RPKs) Asian WTC Financial Oil Crisis Oil Crisis Gulf Crisis Crisis Attack SARS Crisis 8
7
6 +60% growth over the last 10 years x2 5 since 9/11
4
3
2
1
0 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016
15 RPK = Revenue Passenger Kilometre Source: ICAO, Airbus GMF Traffic doubles every 15 years
World annual traffic (trillion RPKs)
18 ICAO total traffic Airbus GMF 2017: 4.4% growth p.a.
16
14 x2
12
10
8 x2
6
4 x2
2
0 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031 2036
16 RPK = Revenue Passenger Kilometre Source: ICAO, Airbus GMF 2017
Asia-Pacific continues to grow in importance
Traffic by airline domicile (trillion RPKs) Share of 20-ye ar Share of 0 1 2 3 4 5 6 7 2016 RPKs C AG R 2036 RPKs
Asia-Pacific 2016 traffic 2017-2036 traffic 30% 5.6% 38%
Europe 26% 3.4% 21%
North America 22% 2.6% 16%
Middle East 10% 6.1% 13%
Latin America 5% 4.5% 5%
CIS 4% 4.0% 4%
Africa 3% 5.3% 3%
17 Source: Airbus GMF 2017
Domestic Chinese traffic to become number one Annual traffic per leg flow
Domestic PRC x3.6 Domestic USA x1.5 Western Europe - USA x1.8 Intra-Western Europe x1.6 Western Europe - Middle East x2.5 Domestic Asia Emerging x3.7 Middle East - USA x4.5 Indian Subcontinent - Middle East x3.4 Domestic India x5.4 PRC - USA x3.6 2016 Asia Emerging - Middle East x3.4 2036 Asia Emerging - PRC x3.8 Western Europe - PRC x2.2 Central Europe - Western Europe x2.6 Western Europe - South America x2.0 Asia Developped - Asia Emerging x2.5 Asia Developped - PRC x3.0 Domestic Brazil x2.6 Intra-Middle East x3.1 South America - USA x2.3 0.0 0.5 1.0 1.5 2.0 Trillions RPKs
18 RPK = Revenue Passenger Kilometre Source: ICAO, Airbus GMF 2017
Trend towards densification, especially for Low Cost Carriers
All Airlines average single-aisle aircraft capacity per flight LCCs average single-aisle aircraft capacity per flight
170 170 165
160 156 160 155 150 150 150 143 143 140 140
130 130
120 120
110 110
100 100 2006 2011 2016 2006 2011 2016
19 Note: Aircraft capacity above 100 seats and below 210 seats Source: OAG – September of each year, Airbus GMF A320 Family cabin enablers can raise A320 Family seat counts by up to 10%
Slim-line Space-Flex Smart-Lav New doors rating Airbus seats New rear galley New lavatory Increased exit limit Cabin-Flex configuration design A321neo new door configuration
A319 156 160 seats A320 180 189 seats A321 220 240 seats
20 A320 deliveries above 180 seats (% total deliveries)
60% Densification
50% trend
40% Airlines are choosing cabin 30% enablers to increase seat 20% count beyond 180 seats
10%
0% 2014 2015 2016 2017 2018
Source: Airbus
21 A320 Family deliveries
A319 A320 A321 100% 13% 16% 18% 21% 31% Upsizing 80% 37% 41%
The single-aisle 60% market continues 74% 73% to move towards 73% 71% higher capacity 40% 62% 57% aircraft 59% 20%
13% 11% 8% 8% 7% 5% 0% 1% 2010 2011 2012 2013 2014 2015 2016 Source: Airbus, End December 2016, includes NEO
22 A321 – growing in popularity
65% of net orders 41% of deliveries of Airbus single aisles in 2016 were A321s
23 Capacity Range Fuel per seat
A321neo vs. 737 MAX 10 +10 seats +1,000nm 10% lower A321neo
Up to 240 seats & 4,000nm range with unbeatable fuel efficiency
24 A330neo
… beats the 787 on comfort, fuel and economics at $20m to $25m lower capital cost
25 A350 XWB
25% lower • operating cost • fuel burn
• CO2 emissions
Compared to previous generation
26 10% of all Heathrow passengers
In 2016, 10% of all passengers at London Heathrow travelled on 54 daily A380 flights*
* Inbound and outbound
27 Upper deck door 3 deactivation* A380 8 seats new New rear stair Upper deck sidewall stowage removal revenue 14 seats 6 seats enablers New forward stair* 20 seats Over 80 additional seats with same comfort level as current deliveries
Economy class at 11-abreast Premium Economy Class at 9-abreast
23 seats Combined crew rest compartment 11 seats 3 seats * Project development study
28 Backlog development 2007 - 2016
2007 End 2016
Boeing Airbus Boeing Airbus 5,715 2,533 2,455 X 2.5 6,874 45% 51% 49% 55% X 2.7 X 2.3
Industry backlog Industry backlog
4,988 aircraft 12,589 aircraft Data to end December 2016 Net market share last 10 years
Boeing Airbus 8,978 9,995 47% 53%
Data to end December 2016 Summary
Drivers
Strong & resilient passenger traffic growth
As air transport develops, new drivers become more significant
Middle-class to almost double by 2036
31 Summary
Traffic forecast
Air traffic (RPK) doubles every 15 years
Airbus traffic (RPK) forecast to grow 4.4% p.a.
32 Summary
Fleet forecast
34,900 new deliveries by 2036:
~34,170 passenger aircraft 730 freighters
40% of new deliveries for replacement, 60% for growth
Single-aisle: 71% of units Wide-bodies: 54% of value
33 Summary
Airbus Family
A321 an ideal entry-point into medium to long-haul markets
A330neo & A350XWB: the lowest total cost widebody family with superior comfort levels
A380: The solution for future traffic growth
34