September 2002 September 2002 The statements made herein do not constitute an offer. They are based on the assumptions shown and are expressed in good faith. Where the supporting grounds for these statements are not shown the Company will be pleased to explain the basis thereof. AIRBUS S.A.S. 31707 BLAGNAC CEDEX, FRANCE REFERENCE CB 390.0008/02 PRINTED IN FRANCE © AIRBUS S.A.S. 2002 ALL RIGHTS RESERVED AN EADS JOINT COMPANY WITH BAE SYSTEMS Contents 1. Forecast highlights 4 2. Introducing the Global Market Forecast 9 3. Impact of the crisis 12 4. Demand for air travel 14 5. Passenger transport operational evolution 24 6. Passenger fleet renewal 30 7. World passenger fleet development 34 8. Demand for passenger aircraft deliveries: 39 - Mainline single-aisles 42 - Twin-aisles 43 - Very large aircraft 45 9. Air cargo forecast 47 Appendices A.Airlines & cargo carriers studied 66 B. Detailed passenger traffic forecast 71 C. Detailed passenger fleet forecast 74 D.Detailed cargo traffic forecast 76 3 2002 Global Market Forecast 1. Forecast highlights As this edition of the Airbus Global Market Forecast (GMF) goes to press, many airlines are still struggling to come to terms with the most severe crisis the industry has ever faced. In response to a substantial drop in demand for air travel they have moved decisively to cut flight schedules, prematurely ground unprecedented numbers of aircraft, and defer delivery of new aircraft on order. The result has been a significant reduction in aircraft manufacturers’ near-term production plans. At the time of writing, however, traffic volumes are recovering, especially on routes which do not serve the US. The history of air transport shows a pattern of strong growth interrupted by a series of short-term downturns from which traffic has invariably rebounded to resume its secular growth trend. Consequently, although recognising that the present crisis is likely to have a lasting effect on travel habits in some major markets, Airbus forecasters are confident that in the long term civil air transport will continue to grow strongly, providing a huge business opportunity for manufacturers of civil aircraft, engines and equipment as well as related services. One very significant development since the publication of the last GMF has been the launch of the A380, reflecting the recognition by major passenger and cargo carriers that a key to sustaining their future growth and profitability will be operation of a new type of aircraft larger, more spacious and more economical than anything flying today. The major predictions of the new GMF are that during the period 2001 - 2020: Worldwide demand for air transport will grow strongly Traffic will recover swiftly from the impact of the present crisis, to resume something close to its historical rate of growth. As major air travel markets mature the annual growth in revenue passenger- kilometres (RPKs) will progressively decline, but will still average a strong 4.7% during the next twenty years. By 2020 global passenger traffic will be two-&-a-half times its current volume. Freight tonne-kilometres (FTKs) will triple during the period, growing at an even more rapid average annual 5.5%. 4 Forecast highlights Airlines will significantly improve productivity Average flight distance and consequently speed will increase slightly. Together with improvements in aircraft utilisation and load factors, this will drive annual RPKs per seat to 1.9 million from less than 1.7 million at end 2000, and annual FTKs per tonne of lift capacity to 1.18 million from 0.95 million at end 2000. The numbers of seats and dedicated freighter lift capacity will more than double The number of seats in service will increase to 4.3 million from 2 million, while the lift capacity of the dedicated freighter fleet will increase to approximately 186,000 tonnes from 72,000 tonnes at end 2000. The numbers of departures offered on existing and new passenger routes will increase by 86% Despite current levels of congestion and delays, this represents a more rapid rise than in the past, and will present a major challenge to the world’s airports and air traffic management systems. The airlines will offer more seats per departure Infrastructure capacity constraints mean that in the long term the numbers of departures will be unable to keep pace with the growth of traffic. Consequently average seats per departure will have to increase to 196 from 161 in 2000. Smaller aircraft tend to make more flights than larger ones, so average aircraft capacity will have to increase more rapidly, to 219 seats from 180. The active passenger fleet will increase by more than 80% To provide the required increase in capacity, the number of passenger aircraft in service will increase to 19,732 from 10,900 at end 2000; an increase of 8,832 aircraft. 5 2002 Global Market Forecast 36% of the current passenger fleet will be retired from active commercial service During the next twenty years the airlines will replace 9,370 of their older, noisier and less efficient passenger jets. Of these, 3,021 will be recycled back into the passenger fleet with other operators, 2,237 converted to freighters, and 4,112 will be retired. To accommodate traffic growth and renew their fleets, the airlines will take delivery of 15,181 new passenger aircraft Two-thirds of the new passenger aircraft delivered will be single- aisle types in nominal size categories from 100 to 210 seats, and one-third will be widebodies. North American airlines will take the largest share of passenger aircraft deliveries, yet their share of world seats will be overtaken by that of airlines in Europe and Asia-Pacific Air travel will grow more strongly in less mature markets outside the US. While the frequency-driven airlines of North America will take delivery of a higher proportion of small aircraft, airlines in Asia-Pacific will dominate the market for very large aircraft. The active world freighter fleet will grow to 3,338 aircraft with an average lift capacity of 55.6 tonnes from 1,540 aircraft with an average 46.9 tonnes capacity at end 2000 This represents an increase of 1,798 aircraft. Coupled with the need to replace 1,145 aircraft when they reach the end of their economic lives, it will create a need for acquisition of a total of 2,943 freighters, of which 2,237 will be passenger-to-freighter conversions and 706 factory-built freighters. 6 Forecast highlights The world jetliner fleet will grow by nearly 11,000 aircraft Aircraft inflows/outflows 2000 - 2020 15,181 Delivered 706 15,887 Passenger Freighter Fleet Fleet Converted 2,237 Recycled 3,021 Retired 4,112 5,257 1,145 Nearly 16,000 new aircraft will be delivered 20-year deliveries Mainline single-aisle aircraft like the Airbus A318, A319, A320 and A321 10,201 Twin-aisle aircraft like the Airbus A330 and A340 3,842 Very large and economical aircraft like the Airbus A380 1,138 Total passenger aircraft 15,181 Freighters 706 Passenger + freighter aircraft 15,887 7 2002 Global Market Forecast A business worth $1.5 trillion 2002 $ (billion) 700 609 600 524 500 400 300 270 200 106 100 0 100-210 250-400 >400 Freighters Seat categories 40% 35% 18% 7% The 15,887 new passenger aircraft and freighters to be delivered during the next twenty years represent a business volume of approximately $1.5 trillion* (2002 catalogue prices) The greatest business volume will be generated by aircraft in the single-aisle category, while very large aircraft will account for 18% of the total. * Terminology used throughout this report: billion = 109, trillion = 1012. 8 Introducing the GMF 2. Introducing the Global Market Forecast The 2002 edition of Airbus’ annual Global Market Forecast predicts the numbers and capacities of passenger jets and dedicated freighters that will be required to accommodate traffic growth and allow fleet renewal by airlines and cargo carriers outside the Commonwealth of Independent States during the twenty-year period 2001 – 2020. Airbus continues to recognise the potential business opportunity represented by the airlines of the CIS, but the lack of a consistent statistical base and reliable economic projections requires use of a forecasting technique different to that used in the GMF. Consequently Airbus publishes this forecast separately. 2000 is retained as the base year for the forecast so as to avoid any distortion resulting from the unprecedented events which occurred in 2001. The latest GMF introduces three new features Compared to previous editions : a) Coverage is expanded, especially at the bottom end of the market, in order to give a better understanding of the potential market penetration by the 100-seat A318; b) The traffic forecasting process has been enhanced by increasing the number of individual submarkets so as better to differentiate some significant traffic flows, and by using a more rigorous statistical methodology which more closely fits historical traffic data; c) In this summary document the grouping of aircraft size categories has been changed so as better to reflect the characteristics of available aircraft types while retaining Airbus’ unique approach to market segmentation. The GMF is a “bottom-up” forecast It projects the year-by-year evolution of passenger traffic, flight frequencies and aircraft capacity on a total of 10,037 individual one-way airport-pair route sectors in 134 distinct domestic, regional and intercontinental submarkets. Similar projections are made for a total of 123 directional air cargo submarkets. These projections are then consolidated into the regional and global fleet forecasts presented in this summary document. This avoids the errors inherent in calculating from global averages. 9 2002 Global Market Forecast The GMF forecasts pure demand It projects demand for aircraft and seats in a total of 15 “neutral” seating and four “neutral” cargo capacity categories.