Global Market Forecast 2003-2022

Global Market Forecast 2003-2022
Global Market Forecast
                2003-2022
Global Market Forecast 2003-2022
December 2003



 The Airbus Global Market Forecast
 may also be found on the Internet at
       http://www.airbus.com




                   AIRBUS S.A.S.
          31707 BLAGNAC CEDEX, FRANCE
            REFERENCE CB 390.0008/02
                  DECEMBER 2003
                PRINTED IN FRANCE
                © AIRBUS S.A.S. 2003
              ALL RIGHTS RESERVED

              AN EADS JOINT COMPANY
                WITH BAE SYSTEMS



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.
Contents :
                1. Forecast highlights                          4
                2. Introducing the Global Market Forecast       8
                3. Impact of the crisis                        10
                4. Demand for air travel                       13
                5. Air transport operational evolution         17
                6. Passenger fleet renewal                     19
                7. World passenger fleet development           21
                8. Demand for passenger aircraft deliveries:   23
                      • Mainline single-aisles                 26
                      • Small twin-aisles                      28
                      • Intermediate twin-aisles               30
                      • Large aircraft                         32
                9. Air cargo forecast                          35


                Appendices

                A. Airlines & cargo carriers studied           46
                B. Detailed passenger traffic forecast         50
                C. Detailed passenger fleet forecast           53
                D. Detailed cargo traffic forecast             55
                E. Freighter fleet forecast                    58




Global Market Forecast 2003
                                                               3
1. Forecast highlights
This edition of the Airbus Global          The major predictions of the 2003
Forecast covers the evolution through      GMF are that during the period 2003-
2022 of the fleet of mainline              2022 :
passenger jets with at least 100 seats
and freighters operated by airlines
outside the Commonwealth of                Worldwide demand for
Independent States.                        air travel will grow
Following the rapid termination of         strongly
major conflict in Iraq, the faster-than-
                                           After three years of negative or at the
expected recovery from the SARS
                                           best weak growth triggered by the
outbreak should open the way to a
                                           current crisis, traffic will rebound
rapid worldwide recovery of air
                                           powerfully to resume a more normal
travel, which has been severely
                                           growth trend averaging just over 5%
affected by these events.
                                           per year. Traffic growth will vary
Even as traffic recovers, creating a       substantially between different air
need for additional capacity, airline      travel markets. Some - including the
revenues – eroded by deep price            US domestic market - have matured,
discounting – are likely to lag.           but revenue passenger-kilometres
Nevertheless the potential for further     (RPKs) will grow strongly on routes
growth in demand for air travel,           serving the dynamic Asia-Pacific
especially among citizens of the           region as well as on those operated by
developing world, is such that, absent     low-cost “no-frills” airlines. By 2022
another      major       crisis, Airbus    global RPKs will be at two-&-two-
forecasters continue to predict a bright   thirds times their current level. During
long-term future for the civil aircraft    the same period freight tonne-
manufacturing and support industries.      kilometres (FTKs) will more than
Increasing cost and competitive            triple, growing at a strong average
pressures, generated partly by a new       annual 5.7%;
generation of aggressive “no-frills”
carriers, are driving airlines to
consolidate their networks so as to        Price will remain the
exploit economies of scale, minimise       #1 demand driver
environmental impact and provide           Until recently, air travel demand has
smaller communities with more              been driven largely by convenience.
service choices.                           But in the harsh new airline world
Despite the impact of the worst crisis     travellers (or those who buy their
ever suffered by the world’s airlines,     tickets) now base their travel
carriers have continued to place           decisions primarily on price. In
orders for the very large and              response, airline managers have
economical A380, reflecting a vote of      modified their route networks in such
confidence not just in this exciting       a way as to improve efficiency, and
new aircraft but also in the very future   the total number of city-pairs served
of air transport itself.                   by mainline jets has stagnated. This
                                           has established a clear trend for the
                                           future;

                                                            Global Market Forecast 2003
     4
Forecast highlights


                     The capacity of both                        The airlines will offer
                     passenger and                               more seats per flight
                     freighter aircraft will                     Infrastructure capacity constraints
                     more than double                            mean that the numbers of flights will
                                                                 be unable to keep pace with the
                     The number of seats in service will         growth of traffic. Consequently
                     increase from 1,944,992 to 4,527,891        average seats per departure will have
                     while the capacity of the active            to increase from 163 to 200;
                     dedicated freighter fleet will increase
                     from 75,630 to 196,948 tonnes;
                                                                 The active passenger
                     The number of flights                       fleet will increase by
                     offered on passenger                        90%
                     routes will double                          To provide the required increase in
                                                                 departures, the number of passenger
                     Despite current levels of congestion        aircraft in service will increase from
                     and delays, this represents a more          10,789 to 20,554;
                     rapid rise than in the past, and will
                     present a major challenge to the
                     world’s airports and air traffic            40% of the current
                     management       systems.      If     the   active fleet will be
                     infrastructure proves unable to
                     accommodate so many flights, airlines       retired from
                     will have to acquire larger aircraft;       commercial service
                                                                 Having already stored many of their
The world jetliner fleet will grow by more
                                                                 superfluous aircraft, airlines will still
than 11,500 aircraft
                                                                 retire 4,914 of their older, noisier and
                                                                 less efficient passenger and cargo jets;
            15,632        Delivered        831
                           16,463
                                                                 Traffic growth and
                                                                 fleet renewal will
       Passenger                      Freighter                  require delivery of
         Fleet                          Fleet                    15,632 new passenger
                          Converted

 Recycled
                            2,019
                                                                 aircraft
  3,197                                                          Almost two thirds of these will be
                           Retired
             3,848                           1,066               single-aisle types in nominal size
                            4,914
                                                                 categories from 100 to 210 seats;




                Global Market Forecast 2003
                                                                                                       5
Forecast highlights


North America first in                   Nearly 16,500 new aircraft will be
fleet size, Europe first                 delivered
in deliveries
                                                                                                     20-year deliveries
The frequency-driven airlines of
                                                    Mainline single-aisle aircraft like the
North America will continue to                      Airbus A318, A319, A320 and A321
                                                                                                                10,184

operate more aircraft than all other                Small twin-aisle aircraft like the Airbus
                                                                                                                1,782
                                                    A330-200
regions’ airlines, but less mature                  Intermediate twin-aisle aircraft like the
                                                                                                                2,962
markets will grow more strongly and                 Airbus A330-300 and A340

the airlines of Europe will take the                Very large and economical aircraft like
                                                    the Airbus A380
                                                                                                                1,535
greatest number of deliveries;                                                       Total aircraft             16,463



Asia-Pacific airlines
will dominate the
market for large                        The 16,463 new
aircraft                                passenger aircraft and
By 2022 60% of the world fleet of       freighters represent a
very large passenger aircraft will be
operated by the airlines of the Asia-
                                        business volume of
Pacific region alone;                   approximately $1.6
                                        trillion*
The active world                        The largest volume of business will be
                                        generated by single-aisle aircraft.
freighter fleet will                    Large passenger aircraft and freighters
grow to 3,283 aircraft                  will account for almost 20% of the
with an average                         total business ;
capacity of 60 tonnes
                                         A business worth $1.6 trillion
from 1,499 aircraft
with an average 50.4                      2003 $ (billion)
                                             700
                                                          640
tonnes capacity                              600


 This increase of 1,784 aircraft,            500                                                 440

coupled with the need to retire 1,066        400                                                                        339
aircraft when they reach the end of          300
                                                                             196
their lives, will create a need for          200

acquisition of a total of 2,850              100
freighters, of which 831 will be                0
factory-built freighters and 2,019                   Mainline single-   Small twin-aisle   Intermediate twin-     Large aicraft
                                                          aisle                                  aisle
passenger-to-freighter conversions;
                                                        40%                  12%                  27%                   21%




                                        * Terminology used throughout this report:
                                        billion = 109, trillion = 1012

                                                                    Global Market Forecast 2003
     6
Forecast highlights


Top Ten end-user nations
                                                                                             The greatest demand
                                                                                             for passenger aircraft
            Passenger aircraft delivered                      By $ value (billion)
                                                                                             will come from airlines
                                                                                             in the United States,
1.     United States                      5,211   United States                      388.5

2.     People’s Republic of China     1,530       People’s Republic of China         175.5

3.     United Kingdom                 1,115       United Kingdom                     113.3   the People’s Republic
4.     Germany                            853     Japan                              95.5
                                                                                             of China and the
                                                                                             United Kingdom
5.     Japan                              682     Germany                            77.4

6.     Canada                             514     France                             52.0

7.     France                             485     Republic of Korea                  46.7    Almost half of all the new passenger
8.     Brazil                             464     Canada                             44.9    aircraft delivered, accounting for 45%
9.     Spain                              411     Singapore                          43.9    of the total dollar value, will be
10.    Italy                              380     Brazil                             42.5    needed by airlines in these three
                                                                                             nations alone.




Key forecast parameters
                                                                                             Key forecast
                                                                                             parameters attest the
      Passenger a/c 100 seats and above           End 2002              End 2022
                                                                                             reasonableness of the
                                                                                             forecast’s results
      World RPKs (billion)                         3,165.7               8,473.1

      World ASKs (billion)                         4,514.2               11,407.3

      Number of aircraft                           10,789                 20,554             To facilitate understanding of the
      Number of installed seats                   1,944,992             4,527,891            GMF and comparison with other
      Number of departures (000)                  15,864.8               31,510.0            forecasts, the table presents the values
      Seats per departure                            163                   200               of eight key parameters at the
      Average flight distance (km)                  1,437                 1,516              beginning and end of the forecast
      Block hours per aircraft per year             3,450                 3,739              period. From these, the corresponding
                                                                                             values of other operational parameters
                                                                                             (such as average speed and size) can
                                                                                             be easily derived. These numbers and
                                                                                             the relationships between them also
                                                                                             give a useful test of the
                                                                                             reasonableness of this (or any other)
                                                                                             forecast’s results.




                             Global Market Forecast 2003
                                                                                                                                  7
2. Introducing the Global Market
Forecast
The 2003 edition of Airbus’ Global          categories and contribute seats to each
Market Forecast (GMF) predicts the          on a basis inversely proportional to its
numbers and capacities of passenger         distance from that category. A 160-
jets and dedicated freighters that will     seat A320, for example, would
be needed to accommodate traffic            contribute 96 (60%) of its seats to the
growth and allow fleet renewal by           150-seater category and 64 (40%) of
airlines and cargo carriers outside the     its seats to the 175-seater category.
Commonwealth of Independent States           This ensures that at every point in the      The GMF is
during the twenty-year period 2003-         forecast the numbers of aircraft              a “bottom-
2022. Recognising the potential             exactly match the projected flight            up” forecast
business opportunity represented by         frequencies, and the numbers of seats         of pure
the airlines of the CIS, Airbus             provide exactly the forecast capacity.        demand for
continues to work towards developing        Freighters are assigned to the different      aircraft in
a reliable forecast for these airlines,     categories      according     to    their     18 size
and looks forward to including it in        payload/range capability.                     categories.
future editions of the GMF.
The GMF is a “bottom-                       Demand is forecast in
up” forecast                                14 passenger
In order to avoid the errors inherent in
calculating from global averages, the
                                            categories …
GMF projects the year-by-year               • Mainline single-aisle (100-, 125-,
evolution of passenger traffic, flight      150-, 175- & 210-seaters (1))
frequencies and aircraft capacity on        • Small twin-aisle (250-seaters)
each of a total of 9,188 individual         • Intermediate twin-aisle (300-, 350-
one-way airport-pair route sectors in       & 400-seaters)
140 distinct domestic, regional and         • Large (450-, 500-, 600-, 800- &
intercontinental submarkets. Similar        1,000-seaters)
projections are made for a total of 145
directional air cargo submarkets.
These route-by-route projections are
then consolidated into the regional
and global fleet forecasts presented in
this summary document.
The GMF is a pure
forecast of demand
It projects demand for aircraft and
seats in a total of 14 “neutral” seating
and four “neutral” cargo capacity
categories. These may be thought of
                                            (1)
as “buckets” of seats (or tonnes of            This category covers the majority of
                                            mainline single-aisle aircraft, although at
lift). Any particular passenger aircraft,   the bottom part of the forecast some
with its own specific seating               demand will be satisfied by 90+-seater
arrangement, will fall between two          regional jets.



                                                               Global Market Forecast 2003
     8
Introducing the Global Market Forecast


                                                                           The GMF applies this approach to the
The GMF covers 407 passenger airlines …                                    active jet fleets of a total of 407
                                                                           individual passenger airlines and 150
   North Am erica
     43 airlines         Europe           Middle East
                                                                           cargo carriers.
    4,269 aircraft     156 airlines       13 airlines
                      2,942 aircraft      297 aircraft


                                                                           … and in 4 freighter
                                                                           categories
                                                                           • Feeder : payload < 30 tonnes
    Latin Am erica
     & Caribbean
                           Africa                                            (typically 22 tonnes)
                         57 airlines
      49 airlines
     737 aircraft
                         378 aircraft
                                                   Asia-Pacific            • Regional : payload 30-60 tonnes
                                                    89 airlines
                                                   2,166 aircraft            (typically 45 tonnes)
2002 active passenger fleet = 10,789 aircraft (100 seats and above)        • Long-range : payload 30-80 tonnes
                                                                             (typically 60 tonnes)
                                                                           • Large : payload > 80 tonnes
                                                                             (typically 120/110 tonnes,
                                                                              new/converted)
… and 150 freighter operators
                                                                           These airlines and cargo carriers,
                                                                           grouped into six consolidated
   North America
    43 operators
                         Europe           Middle East                      geographical regions, are listed in
                      29 operators        7 operators
   978 freighters*
                     214 freighters*     11 freighters*                    Appendix A. The regions in this
                                                                           summary are groupings of the sub-
                                                                           regions listed in IATA reports.
                                                                           Individual forecasts are developed for
                                                                           the 278 larger airlines, and the GMF
                                              Asia-Pacific
                                                                           also includes a less detailed forecast at
    Latin America          Africa
     & Caribbean       21 operators
                                              29 operators                 the lower end of the passenger
    21 operators                             178 freighters*
    67 freighters*
                       51 freighters*                                      market, covering a total of 129
                                                                           smaller airlines. This allows a better
           2002 active freighter fleet = 1,499 freighters
                     * freighter domiciled in its last operator’s region
                                                                           understanding of the potential market
                                                                           penetration by aircraft like the
                                                                           widebody single-aisle 100-seater
                                                                           A318, and increases the number of
                                                                           airlines covered by the GMF to 407
                                                                           which between them account for 96%
                                                                           of total world mainline capacity.




                     Global Market Forecast 2003
                                                                                                                 9
3. Impact of the crisis
This summary of the                       measures at airports, especially in the
                                          USA, have diverted very short haul
GMF provides results                      passengers to other modes of                        The
only for the long term                    transport, and business travellers (or,             question is
                                          rather, those who make their travel
It presents Airbus’ vision of how the                                                         to what
                                          decisions) as well as leisure travellers
world’s air transport system will have                                                        extent, and
                                          have become increasingly sensitive to
evolved by 2022. However following                                                            how rapidly,
                                          the price of the ticket.
recent events it would not be complete                                                        will demand
without some comment on the               This has led airlines the world over to             for air
anticipated impact of the crisis.         discount their prices in an effort to               travel climb
Historical precedents are of limited      stimulate demand, and yields have                   back to the
use in assessing the extent and timing    suffered accordingly. At the same                   previously
of the recovery in demand for air         time travellers’ increasing sensitivity             forecast
travel to be expected after the           to price has contributed to the gains in            levels.
unprecedented sequence of events          market share obtained by a new
which has occurred during the past        generation of aggressive low-cost
three years, including the “dot.com”      carriers at the expense of the
collapse, the terrorist attacks in the    traditional full-service airlines. In
US and elsewhere, the Afghan and          response to these increasingly severe
Iraq conflicts and the SARS epidemic.     cost pressures and competition,
However by studying the pattern of        airlines are being driven even further
recovery following previous crises –      to improve the efficiency of their
notably that following the previous       route networks and to use low-unit-
Iraq war – and reviewing the              cost aircraft.
evolution of successful efforts to
contain the SARS virus, Airbus
forecasters have developed their           The crisis will shift long-term demand by
prediction of the likely profile of the    one & a half years
subsequent recovery.
                                            World annual traffic - trillion RPK
As inputs to its traffic growth models                                                            1.5 years
                                                      ICAO total traffic
Airbus uses projections of economic           8

growth and other indices supplied by                  GMF 2000

the Global Insight (previously                6       GMF 2003
DRI•WEFA) Forecasting Group.
Following the crises of 2001 and              4
2003, Global Insight’s projected long-
                                                                           3.3 years
term growth rates have in general             2
changed very little from the levels
they were predicting prior to 2001.           0
The question is to what extent, and           1990                    2000             2010       2020

how rapidly, will demand for air
travel climb back to the previously
forecast levels. Some loss appears
inevitable, as more irksome security



                                                                    Global Market Forecast 2003
     10
Impact of the crisis


 The residual impact of                   The SARS epidemic,
 the crises will delay                    too, has changed
 traffic recovery to pre-                 people’s perception of
 crisis (i.e. 2000) levels                air travel
 Airbus forecasters predict that total    The collapse in travel demand has
 world revenue passenger-kilometres       been a psychological, not a medical,
 (RPKs) carried by major airlines in      phenomenon, so traffic will take a
 2003 will be as much as 7% below         while to recover even after all WHO
 those carried in 2000.                   travel advisories have been lifted.
 Still, the markets worst affected by     However, historical evidence shows
 the Iraq war and the SARS epidemic       that demand for air travel is
 in 2003 have accumulated a huge          extraordinarily resilient, and Airbus
 pent-up demand which will inevitably     forecasters anticipate that, with
 trigger a very strong traffic recovery   demand stimulated by heavy price
 during the next two years.               discounting, the impact of the Iraq
 As the world economy recovers            war will continue to be felt over no
 intensifying airline competition with    more than a one-year period while the
 more efficient aircraft will make air    impact of SARS will last for two
 travel affordable by more and more       years. Thereafter - absent any other
 people. The resurgence of the pent-up    catastrophes - traffic will resume its
 demand combined with a much more         historical growth path.
 favourable climate will drive the
 industry into an exceptional short-
 term growth period and the GMF           Growth will be
 anticipates that world RPKs will         particularly strong in
 increase by 15% from 2003 to 2004,
 and by 9% from 2004 to 2005.
                                          travel to and from Asia
                                          The GMF predicts that Asia-US RPKs
                                          will grow by 23% from 2003 to 2004
                                          and by 18% from 2004 to 2005, while
                                          Asia-Europe traffic will increase by
                                          26% and 20% respectively. But even
                                          with such a powerful rebound, world
                                          RPKs will not recover to their pre-
                                          crisis 2000 levels before some time in
                                          2004, representing an observed shift
                                          in the near-term air travel demand
                                          curve to the right by some 3.3 years.




Global Market Forecast 2003
                                                                            11
Impact of the crisis


After this strong rebound, global           Long-term passenger traffic growth rates
passenger traffic will follow a more        compared
normal long-term growth trend, with
growth averaging marginally more                          The highlight number is up,
than 5.0% per year over the twenty-              but the growth forecast is in fact slightly down
year period 2002-2022.                                   GMF 2002                       GMF 2003
Comparisons with Airbus’ previous                   RPKs (trillions)                               RPKs (trillions)
forecast of 4.7% per year growth from               3,264.2                   2000
2000 to 2020 are distorted by the                   3,340.2                                        3,165.7 (-5.2%)
                                                                              2002
actual reduction in world RPKs                                4.7%
between 2000 and 2002. In fact, the                                    5.2%          5.1%
                                                                                            5.0%
previous forecast showed average                    8,255.0                   2020                 7,769.8 (-5.9%)
RPK growth of 5.2% from 2002 to
                                                                              2022                 8,473.4
2020, compared with 5.1% for the
same period in the latest forecast;
Airbus forecasters estimate that the
events of 2003 will effectively reduce     Airfreight traffic has
long-term growth in air travel by
approximately 0.1% per year.               been hit by the crisis
Airbus’ current forecast of world          less than passenger
RPKs in 2020 is 5.9% lower than its        traffic
previous projection, representing a
long-term “loss” due to the crisis of
                                           Air cargo has been less affected by
1.5 years’ traffic growth. Especially in
                                           the crisis than passenger traffic.
the US, more irksome security
                                           Because airfreight has become such
procedures and stricter control of
                                           an important driver of industrial
travel expenditure have caused a
                                           growth, Airbus believes the cargo
reduction in travel volume that will
                                           market will recover strongly, and that
never be recovered.
                                           in the longer term the air cargo
                                           transport system will prove to have
                                           benefited from the accelerated
                                           retirement of older, inefficient and
                                           noisy aircraft triggered by the crisis.
                                           Global Insight’s current long-term
                                           forecasts of import and export
                                           volumes are generally more optimistic
                                           than their forecasts issued in 2002.
                                           Consequently, Airbus has increased
                                           its predicted 20-year average annual
                                           freight tonne-kilometre (FTK) growth
                                           rate by one quarter of a percentage
                                           point.




                                                               Global Market Forecast 2003
    12
4. Demand for air travel
                             History shows that                      In particular more and more travel
                                                                     decisions are now based on the
                             demand for air travel                   availability of tickets at an affordable
                             is remarkably resilient                 price. This has been brilliantly
                             Although some markets have largely      exploited by a new generation of
                             matured the prospects for long-term     “low-cost” carriers so that the full-
                             air travel growth remain bright;        service airlines now find themselves
                             especially in developing markets. The   under unprecedented cost pressures.
                             current usage of air transport by the   This will have profound implications
                             citizens of India and the PRC is        both for the way in which the route
                             respectively just 1% and 2½% of that    system is structured and for the types
                             by citizens of the US. Air travel       of aircraft which are needed.
                             worldwide will continue to grow
                             strongly as the wealth of these
                             developing nations grows and it         A hub system reduces
                             becomes affordable by more and more     congestion & costs as
                             of their huge populations.
                                                                     well as expanding
                                                                     service choices
                             Demand will be                          Compared with a point-to-point route
                             increasingly driven by                  system, a hub-&-spoke system can
                             affordability                           significantly reduce costs and
                                                                     congestion      as     well   as     the
                             In the past, growth in RPKs has been
                                                                     environmental impact of air transport.
                             very tightly correlated with economic
                                                                     By consolidating traffic loads between
                             (GDP) growth. But in recent years the
                                                                     different origins and destinations it
                             causality of this relationship has
                                                                     allows more passengers to be
                             become weaker and other demand
                                                                     transported through a congested air
                             drivers have become more important.
                                                                     traffic system at a reduced cost which
Hubbing drastically reduces congestion &                             has become probably the single most
offers secondary cities more service choices                         important economic factor driving
                                                                     airline profitability. In addition, hub
                  Fragmented                   Hubbed
                                                                     systems      can     provide     smaller
                                                                     communities with a greatly increased
          B
                                       B
                                                                     number of service choices.


          A
                                           A
No. of cities :          n                        n
No. of connections : n   (n -1)                2 (n -1)

    Economies
    Economiesof
              ofscale
                 scalereduce
                       reducethe
                               thecost
                                   costof
                                       oftransporting
                                          transportingaapassenger
                                                        passenger
                         across
                          acrossthe
                                 thenetwork
                                     network




                         Global Market Forecast 2003
                                                                                                         13
Demand for air travel

The number of non-
stop services has
reached a saturation
point
Major airlines have recognised these
advantages. As a result since 1996       Number of city pairs served has stagnated
fewer non-stop services have been                                 2,000                                                                                                15,000
opened than have been closed after
                                                                  1,500                                                                                                14,000
proving unprofitable. After a period
when airlines experimented with

                                         Routes dropped / added




                                                                                                                                                                                   Total number of routes
                                                                  1,000                                                                                                13,000

services linking almost all possible
                                                                    500                                                                                                12,000
combinations of cities, the global
route network seems to have reached                                   0                                                                                                11,000

a point of saturation. Moreover, the                               -500                                                                                                10,000
bulk of air travel will continue to be
generated by the concentrations of                                -1,000                                                                                               9,000


population, business and industry in                              -1,500                                                                                               8,000

and around the major cities, and the                                       1985   1987      1989       1991        1993     1995          1997    1999     2001

                                                                    *Source : OAG September data. Scheduled routes operated one or more years in a row.
great majority of passengers will be
carried over and through the major
hubs.


Air travel demand will                   Growing urban populations will need more
become increasingly                      A380s
concentrated                                                                                                                                                        21.15
                                                                                                                                                                         31.85


As urbanisation increases, the                                                                                              20.4
                                                                                                                                                  36.0
                                                                                  21.6 24.9                                                                           Seoul
numbers of people living in major                                                                                                                                           44.0
                                                                                                                                                                     34.9
                                                                                                                          Istanbul 29.1
cities   and     agglomerations    is                                       20.8 New York
                                                                                                                          30.6
                                                                                                                                                  Delhi
increasing more rapidly than the                                                    20.75
                                                                                            29.6
                                                                                                                                                  20.8       23.7
                                                                      Los Angeles                                                   Karachi                            Tokyo
general growth in population. Today                                                                                   Cairo                                                  20.05
                                                                                     Mexico                                        21.0          Kolkata
just five cities or agglomerations                                                                 20.25
                                                                                                           27.4
                                                                                                                                                 28.8
                                                                                                                                                            Manila
                                                                                                                                                                            Osaka
worldwide have more than 20 million                                                                                              Dacca                      23.9
                                                                                                   Sao Paulo
inhabitants;    based    on   current                                                                                                        Mumbai
                                                                                                                                                           Jakarta
projections, by 2020 this number will
have grown to 16 – including 10 in                                                                                Cities with population > 20 million

the dynamic Asia-Pacific region.         Source: Thomas Brinkhoff: City Population, http://www.citypopulation.de                                                            2002 2020




                                                                                              Global Market Forecast 2003
    14
Demand for air travel

                                                                                                                                                                                                    Other developments
                                                                                                                                                                                                    will have little impact
                                                                                                                                                                                                    The GMF growth projections reflect
                                                                                                                                                                                                    the expectation by Airbus forecasters
                                                                                                                                                                                                    that high-speed rail systems will
                                                                                                                                                                                                    continue to take a substantial share of
                                                                                                                                                                                                    some highly-travelled short-haul
                                                                                                                                                                                                    markets, but that their proliferation
                                                                                                                                                                                                    will be severely constrained by the
                                                                                                                                                                                                    huge      infrastructure     investment
                                                                                                                                                                                                    required as well as by growing
                                                                                                                                                                                                    environmental constraints.
                                                                                                                                                                                                    Airbus also anticipates that the impact
                                                                                                                                                                                                    on air travel of improved electronic
                                                                                                                                                                                                    communications will be neutral, as the
                                                                                                                                                                                                    stimulus they provide to business and
Travel growth will vary widely between                                                                                                                                                              personal contacts will counterbalance
different markets                                                                                                                                                                                   any direct substitution.
     Average annual RPK growth rate (% p.a.)                                                              Top Ten markets                                                                           Airbus does not anticipate that air
     2002 - 2022
                                                                                                                                                                                                    travel will be significantly affected by
        9
                                                                                                                                                                                                    unavailability      of     conventional
        8
        7     World
                                                                                                                                                                                                    hydrocarbon fuels during the next
        6
             average                                                                                                                                                                                twenty years, although in the long run
             5% p.a.
        5                                                                                                                                                                                           increasing price and environmental
                                                                                                                                                    Europe - South America




                                                                                                                                                                                                    pressures will rightly provide strong
                                                                                                                                                                             Europe – Middle East
                                                                                                             Domestic P.R.China




        4
                                                                                        Domestic Europe




                                                                                                                                                                                                    incentives to improve fuel efficiency.
                                                                                                                                   Domestic Japan




        3
                                                                       Europe - Asia
                          Europe - USA



                                          Intra Europe



                                                          Asia - USA




        2
              Dom. USA




        1
        0
 % of world
                                                                                                                                                                                                    World air travel will
 2002 RPK
            20.4%        9.4%            6.4%            3.3%          3%              2.2%                 2.1%                  2.0%              1.8%                     1.6%
                                                                                                                                                                                                    recover from the crisis
                                                                                                                                                                                                    & continue to grow
                                                                                                                                                                                                    strongly
                                                                                                                                                                                                    The twenty-year RPK growth
                                                                                                                                                                                                    projections for each of the 140 travel
                                                                                                                                                                                                    markets studied are listed in Appendix
                                                                                                                                                                                                    B. Overall, the result is a prediction
                                                                                                                                                                                                    that the RPKs carried by the world’s
                                                                                                                                                                                                    major airlines will grow at an average
                                                                                                                                                                                                    annual 5.0% to reach just under 8.5
                                                                                                                                                                                                    trillion by 2022, compared with some
                                                                                                                                                                                                    3.2 trillion in 2002.




                                         Global Market Forecast 2003
                                                                                                                                                                                                                                        15
Demand for air travel


Lower-than-average
growth in the US                           Europe’s airlines will take the largest
market means it will                       share of world traffic
lose its historical                                       Africa
                                                                                                 Africa Middle East
                                                                                    Latin America 2%        3%

dominance
                                                                                     & Caribbean
                                                           3% Middle East                                                 North America
                                                                 3%                       5%
                                              Latin America                                                                    29%
                                              & Caribbean              North America
Obviously this global average covers                5%                      35%
a wide variety of growth rates in
                                            Asia-Pacific
different air passenger markets,               24%

largely reflecting their varying
degrees      of     maturity.    Airbus                                          Asia-Pacific
                                                           Europe                   28%
forecasters     project     twenty-year                     30%                                                            Europe
                                                                                                                            33%
average annual growth ranging from                             World traffic                         World traffic
2.7% for the mature domestic US                                at end 2002                           at end 2022
                                                             3.2 trillion RPK                      8.5 trillion RPK
market to 8.5% for domestic routes in
China, which will be one of the great
dynamos for future growth in air
travel. As a result, by 2022 the North     US domestic share of world traffic will
American domestic market will have         decrease
lost its historical dominance, having                                                                                 US domestic
been overtaken by the dynamic Asia-                                       US domestic                                    13%
                                                                            20.4%
Pacific region as the world’s largest
air travel market. At the same time the
share of world RPKs carried by the
airlines of North America will have
been surpassed by that of airlines
based in Europe.


Despite declining                                           World total
                                                             in 2002
                                                                                                  World total
                                                                                                   in 2022

growth rates, the                                      3.2 trillion RPK                         8.5 trillion RPK


annual traffic
increment will
continue to increase
Between 2021 and 2022 world annual
RPKs will increase by 360 billion.
This single year’s incremental traffic
will be greater than the total of 351
billion RPKs reported by the world’s
airlines in 1969 when the 747 entered
service, and helps explain why the
A380, larger than anything flying
today, is already recognised as an
essential part of the world’s future air
transport system.

                                                                       Global Market Forecast 2003
    16
5. Air transport operational
evolution
                               The numbers of aircraft and seats                           • Passenger load factor: after a
                               required to generate the forecast                           decline from 70.1% in 2002 to 68.8%
                               volume of RPKs at the projected level                       in 2003 as airlines did not manage to
                               of service frequencies will result from                     reduce capacity in line with the drop
                               the forecast evolution of a variety of                      in traffic, average load factors will
                               parameters, which are projected year-                       then resume their historical trend,
                               by-year for each of the 9,188                               growing progressively to reach 74.3%
                               individual     airport-pairs    studied.                    in 2022.
                               Airbus forecasters predict that, within                     All these figures are global averages,
                               the constraints of available airport and
Higher                                                                                     embracing wide variations between
                               ATC capacity, these factors will
growth on                                                                                  the groups of airlines based in
                               continue to evolve along historical
longer                                                                                     different geographical regions, but the
                               trends:
routes will                                                                                overall impact is such that in 2022
help                           • Flight      distance:       reflecting                    each installed seat in service will
improve                        generally higher growth on longer                           generate 1.87 million RPKs per year,
seat                           rather than shorter routes, the average                     compared with just 1.63 million in
productivity                   distance flown will increase from                           2002; an average increase of 0.7% per
                               1,437 km in 2002 to 1,516 km in                             year in seat productivity.
                               2022;                                                       Consequently, to accommodate the
                               • Block speed: in consequence,                              forecast average annual 5.0% increase
                               average speed will increase slightly                        in traffic, the world’s major airlines
                               from 612 km/h in 2002 to 622 in                             will have to increase the number of
                               2022;                                                       mainline seats they operate at an
                               • Aircraft       utilisation:       also                    average annual 4.3%.
                               reflecting the increasing flight                            The additional seats will be provided
                               distance, average utilisation will grow                     partly by an increase in the number of
                               from 3,450 block hours per aircraft in                      aircraft operated, and partly by an
                               2002 to 3,739 in 2022;                                      increase in the number of seats per
                                                                                           aircraft. The number of aircraft
Seat productivity & capacity growth will vary                                              operated depends, of course, on the
between different airline regional groups                                                  number of departures offered and the
       RPK per seat        Capacity (seats in service)
                                                                                           average number of departures per
                                                                                           aircraft. Under intensifying cost
         0.7%              World traffic (RPK) 5.0%                 4. 3%
                                                                                           pressure, airlines will manage to
                                                                                           squeeze a few more flights per year
         0.7%              Latin America & Caribbean 5.3%              4. 6%
                                                                                           out of each of their aircraft. From
         0.7%              Asia-Pacific 5.9%                                   5.1%        1,470 in 2002, this number will
            0.4%           Africa 4.7%                              4.3%                   increase to 1,533 in 2022; broadly
         0.7%              N. America 4.0%                 3.3%                            equivalent to one more flight per
       0.9%                Middle East 5.8%                                 4.8%
                                                                                           aircraft per week representing an
        0. 8%                                                          4. 6%
                                                                                           average rate of increase of 0.2% per
                           Europe 5.4%
                                                                                           year.
  2%       1%         0%         1%        2%        3%        4%       5%            6%
                                                          Average annual growth(%)




                            Global Market Forecast 2003
                                                                                                                              17
Air transport operational evolution


To determine the future number of         The GMF assumes liberal frequency
departures, Airbus forecasters use a      development
unique approach based on the                Total daily flights (all airlines combined)
observed distribution of flight              60




                                                                              Capacity
                                                                               share
frequencies between airport-pairs            40                                                     Capacity
                                                                                                   growth only
worldwide as a function of flight                       Capacity/
                                             20
distance. Obviously, the longer the                  frequency split

flight the fewer the number of               10
                                                                                                                      Maximum
                                                                                                                      service levels
departures required to provide an             8
                                             6
“acceptable” level of service.                                                                                        Satisfactory
                                             4
                                                                                                                      regional




                                                                              Frequency
                                                                                                                      service levels




                                                                                share
                                                      Frequency                                                       (Europe-Asia
At the same time the observed                2
                                                      growth only                                                      shown)
behaviour of airlines shows that –           1
again as a function of distance – there      200         400 600 8001000             2000   4000 6000 8000 10000    Distance (km)

is a “maximum” level of frequency
beyond which any further increase         Coupled with the forecast 0.2%
will not in itself generate any more      increase in departures per aircraft, it
travel demand. As traffic grows on        leads to the prediction that in order to
any particular route, the extent to       provide the forecast 4.3% average
which it will be accommodated by an       annual increase in seats, the number
increase in aircraft seat capacity as     of seats per aircraft will have to
opposed to an increase in frequency       increase by 1% per year. This means
will depend upon where it is situated     that the average 180 seats per aircraft
between these two thresholds.             installed in the world mainline fleet in
                                          2002 will have to grow to 220 seats
This analysis for each airport-pair       by 2022. This represents an
leads Airbus to predict that overall,     acceleration of the historical trend
assuming that the infrastructure is       which has seen average mainline seat
able to cope with the increased           capacity grow from 166 seats per
volume of flights, airlines worldwide     aircraft in 1982.
during the next twenty years will
increase the number of departures          Despite a doubling in departures, aircraft
they offer at an average annual rate of    size will have to grow
3.5%. This is significantly higher than                                                             Seats
                                                                                                 (4.3% p.a.)
the increase achieved during the past
                                                                Departures                                            Seats
25 years, and will present a major                              (3.5% p.a.)                                        per aircraft
                                             Departures
challenge to the world’s airports and        per aircraft                                                          (1.0% p.a.)

ATC systems.                                 (0.2% p.a.)


                                                                                      No. of
                                                                                     aircraft
                                                                                   (3.3% p.a.)




                                                              Average annual growth rates 2002-2022




                                                                    Global Market Forecast 2003
    18
6. Passenger fleet renewal
                                                                 Airlines will need to acquire aircraft                                                                                              More and more airlines, including the
                                                                 not only to accommodate the traffic                                                                                                 new breed of “no-frills” carrier,
                                                                 growth described in Chapter 4 but                                                                                                   recognise the value of maintaining a
                                                                 also to replace their older, noisier and                                                                                            young attractive fleet, not merely to
                                                                 less efficient aircraft as their age                                                                                                enhance their market image but also
                                                                 increases, utilisation falls and                                                                                                    to improve traveller acceptability and
                                                                 maintenance costs rise.                                                                                                             exploit the economic advantages of
                                                                                                                                                                                                     new, more advanced aircraft.

Airlines will continue to replace passenger
aircraft before the end of their economic life                                                                                                                                                       Airbus forecasters reflect as far as
                                                                                                                                                                                                     possible each individual airline’s
       Default replacement age (years)                                                                                                                                                               approach to fleet renewal. Where no
       30
                                                                                                                                                                                                     clear policy is evident, they assume
       25                                                                                                                                                                                            the airline will replace an aircraft
                                                                                                                                                                                                     when it reaches a default age which
                                                                                                                                                                         Latin America & Caribbean



       20
                                                                                                                                                                                                     reflects the general behaviour in the
                                                                                                                                                                                                     region in which the airline is based.
                                                                                    Indian Subcontinent




       15
                                                                                                                                                                                                     This varies from 20 years for airlines
                               Western Europe
              Eastern Europe




                                                North America




                                                                                                                                                                                                     in Asia-Pacific or the People’s
                                                                                                                                       Rest of Africa




       10
                                                                                                                        North Africa
                                                                   Asia-Pacific




                                                                                                                                                           Middle East
                                                                                                            P.R.China




                                                                                                                                                                                                     Republic of China to 29 years for
        5
                                                                                                                                                                                                     airlines in Latin America and the
        0                                                                                                                                                                                            Caribbean.

                                                                                                                                                                                                     As a result, aircraft replacement is
European fleet replacement waves reflect                                                                                                                                                             largely driven by the historical
past delivery cycles                                                                                                                                                                                 patterns of aircraft delivery, and tends
N° of aircraft replaced                                                                                    Seat category :                              Intermediate twin-aisle
                                                                                                                                                                                                     therefore to take place in a series of
300                                                                                                                                                     Small twin-aisle                             “waves”, with each “wave” – as it
                                                                                                                                                        Single-aisle                                 occurs – creating new business
250                                                                                                                                                                                                  opportunities         for        aircraft
                                                                                                                                                                                                     manufacturers        and      associated
200
                                                                                                                                                                                                     suppliers of equipment and services.
150                                                                                                                                                                                                  The GMF year-by-year forecast of the
                                                                                                                                                                                                     numbers of aircraft replaced by the
100                                                                                                                                                                                                  airlines of Europe, with clearly-
                                                                                                                                                                                                     defined peaks in 2005, 2013 and
 50
                                                                                                                                                                                                     2021/22, exhibits a classic “wave”
   0                                                                                                                                                                                                 pattern and implies that the region’s
       2003      2005                    2007                   2009              2011                    2013          2015           2017                   2019                        2021
                                                                                                                                                                                                     airlines behave in a more or less
                                                                                                                                                                                                     homogeneous manner.




                                                Global Market Forecast 2003
                                                                                                                                                                                                                                          19
Passenger fleet renewal



In contrast, the forecast for the North     North American fleet replacement activity
American airlines suggests a much           will be less cyclical
more heterogeneous behaviour by the         N° of aircraft replaced                         Seat category :      Intermediate twin-aisle
airlines.                                   300                                                                  Small twin-aisle
                                                                                                                 Single-aisle

                                            250
For the world as a whole, the picture
is one of high replacement activity         200
through 2005, followed by a lull
before the next “wave” starts to build      150

from 2010 onwards.
                                            100


                                              50
Occasionally, as in the case of the past
three years, a slowdown in traffic may          0
drive airlines to reduce capacity by                2003    2005      2007   2009   2011    2013    2015       2017   2019    2021
definitively retiring aircraft or parking
them with a view to reintroducing
them when growth resumes. In                High worldwide fleet replacement activity
practice, only a small fraction of the      through 2005
parked aircraft will in fact return to      N° of aircraft replaced                          Seat category :      Large
service.                                    800
                                                                                                                  Intermediate twin-aisle
                                            700                                                                   Small twin-aisle
                                                                                                                  Single-aisle
Based on their best estimates, Airbus       600
forecasters predict that by 2022 only       500
16% of the end-2002 active fleet will
                                            400
still be in service with their current
operators.                                  300

                                            200

                                            100

                                                0
                                                    2003    2005      2007   2009    2011   2013     2015      2017    2019    2021




                                                                         Global Market Forecast 2003
    20
7. World passenger fleet
development
High aircraft size and fleet growth in Asia-                                                           At the end of 2002 the airlines in the
Pacific                                                                                                GMF were actively operating some
                 Avg. a/c size        Number of aircraft in service
                                                                                                       10,800 passenger jets with 100 seats
                                                                                                       or more. With an average of 180 seats
            1.0%                  World capacity 4.3%                       3.3%
                                                                                                       per aircraft, this provided a little more
                                                                                                       than 1.9 million installed seats.
          1.2%           Latin America & Caribbean 4.6%                     3.3%
                                                                                                       Through 2022, the number of aircraft
          1.3%                    Asia-Pacific 5.1%                                3.8%                will increase by 90% to about 20,500
                  0.6%            Africa 4.3%                                     3.7%                 while the number of installed seats
             0.8%                 N. America 3.3%                  2.4%                                will reach more than 4.5 million.
                0.8%              Middle East 4.8%                                     4.0%

                0.7%              Europe 4.6%                                      3. 8%               These numbers represent global
     2%            1%            0%          1%           2%          3%          4%          5%       average rates of growth of 3.3% per
                                                                    Average annual growth              year in numbers of aircraft and 4.3%
                                                                                                       per year in installed seats. The airlines
                                                                                                       domiciled in the different regions
                                                                                                       show considerable variation around
Airlines in Europe & Asia-Pacific will                                                                 these global averages. High traffic
operate more seats than in North America                                                               growth on routes to, from and within
                                                                                                       the region will drive the dynamic
                                                      Rest of World                    North America   Asia-Pacific airlines based there to
                                                          13%                               28%
                                                                                                       achieve the most rapid increase in
           Rest of World          North America
               12%                     35%                                                             both average seat capacity and
                                                                                                       installed seats. The most rapid
                                                                                                       increase in fleet size will be achieved
 Asia-Pacific
    25%                                                                                                by airlines in the Middle East. In
                                                                                                       contrast the airlines of North America,
                             Europe
                                                  Asia-Pacific
                                                     29%
                                                                                                       with their high exposure to the mature
                                                                                          Europe
                              28%
                                                                                           30%
                                                                                                       US domestic market, will have the
                   World total                                      World total                        slowest growth in installed seats.
                   at end 2002                                      at end 2022
                1.94 million seats                               4.53 million seats

                                                                                                       Consequently the North American
                                                                                                       airlines will become progressively
                                                                                                       less dominant. By 2022 they will be
                                                                                                       operating fewer seats than the airlines
                                                                                                       of Europe or of the Asia-Pacific
                                                                                                       region.




                                 Global Market Forecast 2003
                                                                                                                                            21
World passenger fleet development



As an inevitable response to
intensifying cost pressures and            The trend is towards widebodies
infrastructure capacity constraints, the                                                                             Large
composition of the world fleet will                               Large                                               6%
                                                                                            Intermediate
shift towards larger aircraft. By 2022     Intermediate twin-aisle >1%                        twin-aisle
                                                    14%                                          16%
mainline single-aisles will make up
                                           Small twin-aisle
just two-thirds of the fleet, compared           9%

with three-quarters in 2002. At the                                                            Small
                                                                                             twin-aisle
same time very large aircraft will                                                             11%

account for 6% of the world passenger
                                                                                                                                        Mainline
fleet; the same percentage as                                                   Mainline                                              single-aisle
                                                                              single-aisle                                               67%
represented by 747s in the current                                               77%
                                                               World total                                            World total
fleet.                                                         at end 2002                                            at end 2022
                                                              10,789 aircraft                                       20,554 aircraft

However the role played by very large
aircraft is seen more clearly in terms
of capacity. By 2022 these aircraft        Very large aircraft will provide a significant
will provide 14% of all seats in           share of world airline capacity
service.                                                                                                   Large
                                                                                                            14%
                                                                  Large                                                                 Mainline
                                             Intermediate          1%                                                                 single-aisle
Some care is needed when reading the           twin-aisle
                                                  26%
                                                                                                                                         49%

results of the fleet forecast in                                                     intermediate
                                                                                       twin-aisle
Appendix C. The GMF does not, for                                                         25%

example, forecast delivery of just 484
A320s through 2022; the figure of 484      Small twin-aisle
                                                12%                            Mainline
represents the number of A320s                                               single-aisle
already in Airbus’ firm order backlog                                           61%             Small twin-aisle
                                                                                                     12%
at end 2002. In addition, the A320                             World total                                         World total
will of course compete to supply part                          at end 2002                                         at end 2022
                                                          1.94 million seats                                4.53 million seats
of the forecast “open” demand for
10,467 single-aisle types for which
firm orders had not been placed at end
2002.




                                                                          Global Market Forecast 2003
    22
8. Demand for passenger aircraft
deliveries
                                Global summary                                                  Five-eighths of the new aircraft
                                                                                                delivered will be for growth and
                                During 2003-2022, to accommodate
                                                                                                three-eighths for fleet renewal.
                                traffic growth and renew their fleets,
                                the world’s major airlines will require                         Of the 5,867 aircraft replaced, 2,019
                                delivery of a total of 18,829 passenger                         will be converted to freighters (see
                                jets with 100 seats or more.                                    Chapter 9) and 3,848 will be
                                                                                                definitively withdrawn from airline
                                Of these deliveries, 3,197 represent
                                                                                                service.
                                demand that will be satisfied by
                                aircraft replaced by their initial                              The new aircraft will include
                                operator and recycled back into the                             approximately :
                                fleet of another airline. The remaining
                                15,632 will be new aircraft; an                                 • 10,000                mainline
                                average of 782 per year.
                                                                                                single-aisle      aircraft; a market
Total demand will be met by 15,632 new                                                          where the A320 family has built up a
and 3,197 recycled aircraft                                                                     leading position;
   Fleet size


                                                                                                • 1,800 small twin-
                                                          20,554 @ 220
   20,000


                               + 3.3 % per annum                              9,765@ 265        aisle aircraft; a market where the
   15,000
                                                Growth                                          A330-200 is setting new standards
                      10,789 @ 180                                               15,632 @ 233
                                                                                 new aircraft
                                                                                                which cannot be cost-effectively
   10,000
                                               Replaced                                         superseded in the foreseeable future;
                                                                              5,867 @ 181


                                                                                                • 2,600 intermediate
    5,000
                                               Recycled
                                                                              3,197 @ 186

        0
                                                Stay                          1,725 @ 168
                                                                                                twin-aisle aircraft; a market
                           2002                                  2022                           where the larger A330/A340 family
                                                                                                offers an unmatched combination of
                                                                                                capability and efficiency, and;
New passenger aircraft deliveries will
average 782 per year                                                                            • Nearly 1,200              very large
Number of new aircraft
                                                                                                and economical aircraft; a market
   12,000                                                                New passenger          which it now appears the highly
                                                                        aircraft delivered
                  10,075                                                   2003 - 2022
                                                                                                successful A380 will have to itself
   10,000                                                                Totala= 15,632         when it enters service in 2006.
    8,000


    6,000


    4,000
                                                         2,612
                                     1,782
    2,000                                                                     1,163

        0
                Single-aisle     Small twin-aisle   Intermediate         Large aircraft
                                                      twin-aisle
                                                                           Seat category




                           Global Market Forecast 2003
                                                                                                                                  23
Demand for passenger aircraft deliveries



The European airlines will constitute      European airlines will account for most deliveries; Asia-
the largest single regional market in      Pacific airlines for the largest number of seats delivered
terms of numbers of aircraft delivered                                                                           Middle East
                                                         Africa Middle East                                          4%
during the next twenty years, but their    Latin America 4%         3%
                                                                                                            Africa
                                                                                               Latin America 3%
                                            & Caribbean
greater appetite for very large A380-            7%                                North America
                                                                                                & Caribbean
                                                                                                     6%
                                                                                                                             North America
                                                                                                                                  26%
type aircraft means that the airlines of                                                30%

Asia-Pacific will account for the
largest share of seats delivered.


                                           Asia-Pacific                             Europe                                         Europe
                                              24%                                    32%        Asia-Pacific                        30%
                                                                                                   31%

                                                          15,632 new passenger                             3.6 million new seats
                                                             aircraft deliveries                                 delivered
                                                                 2003-2022                                      2003-2022




                                                                         Global Market Forecast 2003
    24
Demand for passenger aircraft deliveries



Most aircraft will fly from airports in the US &                                                  By 2022 the world’s active mainline
Europe – with Tokyo’s Narita also in the Top Ten                                                  fleet of 20,554 passenger jets will be
                                                                                                  operating at 1,511 airports, linking a
                                                                                                  total of 9,125 airport-pairs with more
                                                                                      9
                                                                                                  than 82,900 daily one-way flights.
                  2
                ORD                                               8
                                                                                    NRT
                                                                                    (228)
                                                                                                  Operations will remain largely
                (350)                                 1         AMS
     3
                              10
                             JFK
                                                    LHR
                                                    (368)
                                                                (230)                             focused on flights to, from and within
   LAX                      (220)
   (307)
                      6                                           5
                                                                                                  North America, Europe and Asia-
                     ATL
                    (294)
                                                      4
                                                    CDG
                                                                FRA
                                                                (295)
                                                                                                  Pacific. Flights from just the Top 25
          7
        DFW
        (262)
                                                    (303)                                         airports – led by London Heathrow
                                                                                      Rank
                                                                                    (n° of a/c)
                                                                                                  and Chicago O’Hare – will absorb the
                                                                                                  productive capacity of 28% of the
                                                                                                  aircraft, while half the aircraft will be
     In
      In2022,
         2022,14%
               14%of
                  ofthe
                      theworld
                         worldmainline
                                mainlinefleet
                                         fleetwill
                                               willbe
                                                    beused
                                                       usedon
                                                           onflights
                                                              flights
                     from
                      fromjust
                           justthe
                                theTop
                                    TopTen
                                        Tenairports
                                             airports
                                                                                                  used on flights from just the Top 75
                                                                                                  airports.

                                                                                                  Five of the Top Ten airports
Most aircraft will be used on short flights                                                       worldwide (measured by aircraft
                                                                                                  utilisation) will be in the US, and four
  Percent of aircraft operated at range                                    2022                   in Europe, with Tokyo Narita in 9th
  25%
                                                                                                  place the sole representative from
  20%                                                                                             Asia-Pacific.

  15%
                                                                                                  By 2022, 62% of the active world
  10%                                                                                             mainline fleet will be deployed on
                                                                                                  flights of no more than 2000 km
   5%                                                                                             (roughly equivalent to Frankfurt to
                                                                                                  Moscow).
   0%
        500       2,000     3,500   5,000   6,500      8,000    9,500    11,000 12,500
                                                               Range band (500 km steps)




                              Global Market Forecast 2003
                                                                                                                                       25
Demand for passenger aircraft deliveries



Results by size
category :

• Mainline single-aisles                   10,075 new mainline single-aisles will be
                                           needed
Through 2022 the world’s major
                                            Fleet size                                                 Number of new aircraft
airlines will need more than 12,400         16,000                                                     3,000
                                                                        13,830 @ 159
single-aisle passenger aircraft to                               + 2.6 %
                                            14,000                                                                                        2,798
                                                              per annum
accommodate traffic growth and                                                    5,536                2,500
                                            12,000                  Growth                                                                        2,442
                                                                                                                                  2,363
renew their fleets. Of these, some                                                                     2,000
                                            10,000       8,294                           10,075 new
2,400 will be provided by aircraft                       @ 145                           aircraft                      1,888
                                             8,000                                                     1,500
recycled back into the fleet after being                             Repl.

replaced by their initial operator.          6,000                                     4,539           1,000
                                             4,000
                                                                     Rec.              2,357            500
                                             2,000                                                             584
The advanced and efficient A320                                      Stay              1,398
                                                 0                                                        0
family, ranging from the A318 to the                         2002               2020                           100         125      150    175      210
                                                                                                                            Seat category
A321, is well placed to secure a large
share of the remaining demand for
10,100 new aircraft in this category.
                                           Mainline single-aisle operations will be
                                           concentrated on US domestic routes
By 2022 the active fleet of 13,830
                                                                                                                     9
mainline      single-aisles will      be                                                         5
                                                                                                                   DTW
                                                                                                                   (141)
operating at 1,506 airports, linking                                          10
                                                                                               MSP
                                                                                               (162)
                                                                                                             1
8,216 airport-pairs with some 63,000                                         DEN
                                                                             (139)                         ORD
                                                                                                           (267)
daily one-way flights. Operations will
                                                                                                                                   7
be largely focused on domestic US                       8                                                                        EWR
                                                      PHX                                                                        (151)
routes; all the Top Ten airports served               (147)
                                                                       2
by these aircraft (measured in terms of                              DFW
                                                                     (225)
                                                                                                    3
                                                                                                   ATL
                                                                                                  (215)
aircraft utilisation) will be in the US.               6
                                                     LAX
                                                                                                                                                   Rank
                                                                               4                                                                 (n° of a/c)
Indeed, the most highly-ranked non-                  (154)
                                                                              IAH
                                                                             (174)
US airport, Frankfurt, is in only 11th
place.                                       In
                                              In2022,
                                                 2022,13%
                                                       13%of
                                                           ofthe
                                                              theworld
                                                                  worldmainline
                                                                         mainlinesingle-aisle
                                                                                  single-aislefleet
                                                                                               fleetwill
                                                                                                    willbe
                                                                                                         beused
                                                                                                            usedon
                                                                                                                 on
                                                            flights
                                                             flightsfrom
                                                                     fromjust
                                                                          justthe
                                                                               theTop
                                                                                  TopTen
                                                                                       Tenairports
                                                                                            airports




                                                                       Global Market Forecast 2003
    26
Demand for passenger aircraft deliveries



Mainline single-aisles will be largely flown                                                                      Similarly, the Top Ten routes will all
on short routes …                                                                                                 be within the US. In this case, the first
                                                                                                                  non-US route (Bangkok- Koh Samui)
     Percent of aircraft operated at range                                              2022                      is ranked just 33rd.
     25%


     20%                                                                                                          Compared with the world fleet as a
                                                                                                                  whole, the use of single-aisles will be
     15%
                                                                                                                  relatively dispersed. Flights from the
     10%                                                                                                          Top 25 airports, led by Chicago
                                                                                                                  O’Hare and Dallas/Fort Worth, will
       5%                                                                                                         absorb the productive capacity of just
                                                                                                                  26% of the aircraft, and 50% of the
       0%
             500           2,000         3,500     5,000          6,500         8,000     9,500      11,500
                                                                                                                  single-aisle fleet will be used on
                                                                          Range band (500 km steps)               flights from the Top 87 airports.

                                                                                                                  The single-aisle aircraft will be flown
… with 41% flown by airlines in North                                                                             overwhelmingly on short flights; by
America                                                                                                           2022 39% of the aircraft will be used
                           Middle East                                      Africa Middle East
                                                                                                                  on flights of no more than 1,000 km
                              5%                                             4%
             Africa
                                          North America         Latin America
                                                                                      2%                          equivalent to Paris to Madrid.
                                               10%               & Caribbean                      North America
             16%
                                                                      8%                               40%


                                                                                                                  By 2022, 22 North American airlines
Latin America
& Caribbean                                               Asia-Pacific
                                                                                                                  will each be operating an average of
     12%                                                     15%
                                                                                                                  254 mainline single-aisles, compared
                                                  Europe
                                                                                                                  with 82 European airlines operating
                                                   37%
            Asia-Pacific                                                                                          an average of 53 aircraft each.
               20%                                                         Europe
                                                                            31%

                           222 airlines                                     13,830 aircraft

                           GMF mainline single-aisle fleet in 2022




                                    Global Market Forecast 2003
                                                                                                                                                       27
Demand for passenger aircraft deliveries



• Small twin-aisles                        1,782 new small twin-aisles aircraft will be
                                           needed
Demand will develop for a total of
                                                        Fleet size
2,100 aircraft in this category. With         2,500
                                                                                                  2,227 @ 249
almost 300 to be replaced by recycled
aircraft, this will leave a need for          2,000
                                                                                                                 1,289
some 1,800 new aircraft to be                                                  + 4.4 %
delivered during 2003-2022.                   1,500                         per annum
                                                                                         Growth                          1,782 new
                                                                                                                         aircraft
                                                                938 @ 246
                                              1,000
By 2022 the active fleet of 2,227                                                        Repl.
                                                                                                                 493
small twin-aisle aircraft will be               500
operating at 609 airports, linking a                                                      Rec.                   297

total of 2,623 airport-pairs with some            0
                                                                                          Stay
                                                                                                                 148
                                                                     2002                             2022
8,200     daily    one-way      flights.
Operations will be largely focus on
intra-European and US domestic
flights. The Top Ten airports include      Operations of small twin-aisle aircraft will
six in Europe and three in the US,         mainly be in the US & Europe
while the Top Ten routes include
three in the US and four in Europe.                                                                                        9
                                                                                                           2
Amongst Asian airports, only Beijing                                                                      LHR
                                                                                                          (45)
                                                                                                                         AMS
                                                                                                                         (31)

features among the Top Ten.                                                    3
                                                                              JFK
                                                         6                                                           5
                                                                              (44)                                 FRA
                                                        LAX                                             1
                                                        (38)                                          CDG          (40)
                                                                                                      (55)
                                                                       4
                                                                     ATL
                                                                                                                         8
                                                                     (44)
                                                                                                                       FCO
                                                                                                    7                  (34)
                                                  10
                                                                                                   MAD
                                                 PEK                                               (37)
                                                 (28)                                                                             Rank
                                                                                                                                (n° of a/c)



                                              In
                                               In2022,
                                                  2022,18%
                                                        18%of
                                                            ofthe
                                                               thesmall
                                                                   smalltwin-aisle
                                                                         twin-aislefleet
                                                                                    fleetwill
                                                                                         willbe
                                                                                              beused
                                                                                                usedon
                                                                                                     onflights
                                                                                                        flights
                                                               from
                                                                fromjust
                                                                     justthe
                                                                          theTop
                                                                             TopTen
                                                                                  Tenairports
                                                                                       airports




                                                                     Global Market Forecast 2003
    28
Demand for passenger aircraft deliveries



Small twin-aisle operations will include                                                          As a measure of concentration, flights
both short-range & long-range routes …                                                            from the Top 25 airports will use the
                                                                                                  productive capacity of 32% of the
    Percent of aircraft operated at range                                   2022                  fleet, and 50% of the fleet will be
    18%
                                                                                                  used on flights from the Top 56
    16%
                                                                                                  airports, led by Paris Charles de
    14%

    12%
                                                                                                  Gaulle and London Heathrow.
    10%

     8%                                                                                           The world fleet of small twin-aisles
     6%                                                                                           will be used on a broad spectrum of
     4%
                                                                                                  routes, but will mainly fly on local
     2%
                                                                                                  and domestic routes largely served
     0%
           500       2,000    3,500   5,000      6,500      8,000   9,500   11,000   12,500
                                                                                                  today by single-aisles. The higher
                                                               Range band (500 km steps)          proportion of these routes will result
                                                                                                  in a sustained reduction in average
                                                                                                  flight distance from its current 2,561
                                                                                                  km to 1,974 km in 2022. By 2022
… with European airlines the main users                                                           70% of the aircraft will be used on
                                                                                                  flights of no more than 4,000 km;
                                                                Africa Middle East
                     Middle East
                         6%      North America                   4%       5%                      equivalent to Los Angeles to New
            Africa                                 Latin America
            12%
                                      10%
                                                    & Caribbean                   North America   York.
                                                         6%                            22%

                                                  Asia-
   Latin
                                                  Pacific                                         The airlines of Europe will constitute
                                                   25%
  America
& Caribbean
                                                                                                  the largest single regional market for
   12%                                                                                            these aircraft, with 50 airlines
                                         Europe
                                          34%                                                     operating an average of 17 aircraft
          Asia-Pacific
             26%                                                                     Europe       each. Fifteen North American
                                                                                      38%
                                                                                                  operators, however, will have a larger
                      146 airlines                                  2,227 aircraft
                                                                                                  average fleet of 32 aircraft each.
                             GMF small twin-aisle fleet in 2022




                               Global Market Forecast 2003
                                                                                                                                    29
Demand for passenger aircraft deliveries



• Intermediate twin-                       2,612 new intermediate twin-aisles will be
                                           needed
aisles
                                            Fleet size                                                Number of new aircraft
The world’s major airlines will need a      3,500                          3,326 @ 335               1,400
total of more than 3,100 aircraft in
                                            3,000                                                    1,200
this category; a market segment                              + 4.0 %                   1,799
                                                                                                                  1,219

                                                          per annum
covered by the A330-300 and the             2,500                                                    1,000


A340 family. 2,600 of these aircraft        2,000         1,527
                                                                  Growth
                                                                                            2,612 new
                                                                                                          800
                                                          @ 326                                                                 744
will be new, leaving 500 to be              1,500
                                                                                            aircraft
                                                                                                          600                                649
satisfied by recycled aircraft. Almost      1,000                  Repl.                                  400
half of the new aircraft will be 300-                                                   813
                                             500                   Rec.                                   200
seaters, with the remainder split                                  Stay
                                                                                        525
                                                                                        189
equally between 350-seaters (28%)               0                                                           0
                                                          2002                2022                                300           350          400
and 400-seaters (25%).                                                                                                    Seat category




By 2022 the active fleet of 3,326
twin-aisles will be operating at 506
airports, linking a total of 2,059         Intermediate twin-aisle operations will be
airport-pairs with some 9,400 daily        concentrated largely on Asia-Pacific & Europe
one-way flights. Operations will be                                                          2
                                                 7
spread globally, with only a small             LAX                           9
                                                                                            LHR
                                                                                            (96)
                                                                                                                                              3
                                                                                                                                             NRT
                                               (67)                         AMS
proportion of flights on US domestic                                        (62)
                                                                                                    4
                                                                                                                                             (89)


routes. Of the Top Ten airports                                                       1
                                                                                     CDG
                                                                                                   FRA
                                                                                                   (84)
                                                                                     (97)
served, five will be in the Asia-Pacific                                                                                        5
                                                                                                                               PEK
                                                                                                                               (73)
region and four in Europe, leaving
just Los Angeles in the US. The Top                                                                                   8
                                                                                                                     BKK               10
                                                                                                                     (66)             ICN
Ten routes also show a global spread.                                                                        6
                                                                                                                                      (55)
                                              Rank                                                         SIN
                                            (n° of a/c)                                                    (71)



                                               In
                                                In2022,
                                                   2022,23%
                                                         23%of
                                                             ofthe
                                                                 theintermediate
                                                                     intermediatetwin-aisle
                                                                                   twin-aislefleet
                                                                                              fleetwill
                                                                                                   willbe
                                                                                                        beused
                                                                                                          usedon
                                                                                                               on
                                                            flights
                                                             flightsfrom
                                                                      fromjust
                                                                           justthe
                                                                                theTop
                                                                                    TopTen
                                                                                        Tenairports
                                                                                             airports




                                                                       Global Market Forecast 2003
    30
Demand for passenger aircraft deliveries



A significant proportion of intermediate twin-                                                          Compared with the world fleet as a
aisle flights will demand 4-engine autonomy                                                             whole, operation of intermediate twin-
                                                                                                        aisles will be relatively concentrated,
     Percent of aircraft operated at range                                     2022                     with flights from the Top 25 airports –
     14%
                                                                                                        led by Paris Charles de Gaulle and
     12%
                                                                                                        London Heathrow – absorbing the
     10%                                                                                                productive capacity of 44% of the
      8%                                                                                                aircraft. Half the aircraft will be used
      6%
                                                                                                        on flights from the Top 32 airports.
      4%

      2%
                                                                                                        The deployment of the intermediate
                                                                                                        twin-aisle fleet shows a similar
      0%
            500       2,000   3,500    5,000     6,500   8,000     9,500    11,000 12,500
                                                                                                        pattern to that of the smaller twin-
                                                                 Range band (500 km steps)              aisle aircraft, but with a substantially
                                                                                                        greater use on long-range routes. Half
                                                                                                        the fleet will be used on flights of no
                                                                                                        more than 4,000 km (roughly
Asia-Pacific will be the largest market                                                                 equivalent to San Francisco to
                                                                   Africa Middle East
                                                                                                        Montreal) , but one-third will be used
                       Middle East

             Africa
                           7%    North America
                                      9%           Latin America
                                                                    4%        6%                        on flights longer than 7,500 km
                                                                                        North America
             10%                                   & Caribbean
                                                                                             20%
                                                                                                        (roughly equivalent to New York to
                                                         5%
                                                                                                        Moscow).
Latin America
 & Caribbean
     11%
                                                                                                        The 35 Asia-Pacific operators will
                                           Europe
                                                                                                        constitute the largest single regional
           Asia-Pacific
                                            35%                                             Europe      market, with an average of 38 aircraft
                                                           Asia-Pacific                      25%
              28%
                                                              40%                                       each.
                        124 airlines                                 3,326 aircraft

                       GMF intermediate twin-aisle fleet in 2022




                               Global Market Forecast 2003
                                                                                                                                            31
Demand for passenger aircraft deliveries



• Large aircraft                           1,163 very large passenger aircraft will be
By 2022, in order to sustain profitable    needed
                                            Fleet size                                                        Number of new aircraft
operations in the face of maturing                                           1,171 @ 558
                                                                                                           600
markets, continuing severe price            1,100

competition,       and      increasingly                                                                   500             537
                                             900
stringent       infrastructure       and                                                   1,141
                                                                                                           400
environmental constraints, major             700              (+ 20.1 %
                                                            per annum)
                                                                                            1,163 new
airlines will need a total of almost         500
                                                                                            aircraft 300
                                                                                                                                      292
1,200 very large and economical                                      Growth
                                                                                                           200
aircraft like the A380. Just 18 will be      300
                                                           30
                                                                                                                    203

recycled back into the fleet after being     100
                                                          @ 551
                                                                                                  22
                                                                                                           100
                                                                       Repl.                                                                  101
replaced by their initial operators (ten                                                            18
                                                                                                             0
                                                                                                                                                        30
                                             -100          2002                  2022              -10
of these being aircraft delivered                                                                                   450    500        600     800   1,000
                                                                                                                                  Seat category
during the 20-year forecast period).

Over 70% of the new large aircraft         Eight of the Top Ten large aircraft airports
delivered will be in the 500- and 600-     will be in Asia-Pacific
seater categories. The remaining 30%
                                                                                                            2
of demand will be satisfied by some                                    1
                                                                     LHR                                  NRT
                                                                                                                                    6
                                                                                                                                  LAX
                                                                     (106)                                (100)                   (48)
200 450-seaters leaving only 130
aircraft in the 800- and 1000-seater                                                          7               8
                                                                                             PEK             HND
categories. The average capacity of all                                                      (40)            (37)           9
                                                                                                                           ICN
deliveries will be 559 seats, very close                                         5                                         (37)
                                                                                BKK                  3
to    the    555     3-class     seating                                        (48)                HKG
                                                                                                    (88)                           10
configuration of the A380.                                            4
                                                                     SIN
                                                                                                                                  SYD
                                                                                                                                  (35)
                                              Rank                   (66)
                                            (n° of a/c)


By 2022, these large aircraft will be
                                                    In
                                                     In2022
                                                        2022more
                                                              morethan
                                                                    thanhalf
                                                                         halfof
                                                                             ofthe
                                                                                 theworld’s
                                                                                     world’sfleet
                                                                                             fleetof
                                                                                                   of1,171
                                                                                                      1,171very
                                                                                                            verylarge
                                                                                                                  large
serving 209 airports, linking 489                    aircraft
                                                      aircraftwill
                                                              willbe
                                                                   beused
                                                                      usedon
                                                                           onflights
                                                                               flightsfrom
                                                                                       fromjust
                                                                                            justthe
                                                                                                 thetop
                                                                                                     topten
                                                                                                          tenairports
                                                                                                              airports
airport-pairs with some 3,400 daily
departures.
Unsurprisingly, operation of very
                                           Nine of the Top Ten large aircraft routes
                                           will serve Asia
large aircraft will be highly
concentrated, with flights from just                                            15 (628)
                                                          22 (654)                                  CTS                    16 (530)         LAX
the Top 25 airports using the capacity          JFK
                                                                     LHR
of 70% of the fleet.                                                                        16 (816)                 NRT                     16 (526)
                                                                                                            HND                                     HNL
Flights from London Heathrow will                                                           16 (771)

use the productive capacity of more of                                                              FUK
                                                                                                                     18 (608)
                                                                     23 (594)
these aircraft than flights from any                                                   16 (716)

other airport, but – apart from Los
Angeles in 6th place – all the other                                               SIN                       HKG                TPE

Top Ten airports are in Asia-Pacific.       Number of aircraft (avg. seats)
                                                                                                                     22 (754)

And of the Top Ten routes, only
London Heathrow-New York JFK                  In
                                               In2022,
                                                  2022,the
                                                        theTop
                                                           TopTen
                                                               Tenairport
                                                                   airportpairs
                                                                           pairsalone
                                                                                 alonewill
                                                                                        willuse
                                                                                             use180
                                                                                                 180out
                                                                                                    outof
                                                                                                        of1,171
                                                                                                           1,171
                                                                     very
                                                                      verylarge
                                                                           largeaircraft
                                                                                 aircraft
does not serve this dynamic region.

                                                                             Global Market Forecast 2003
    32
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