Navigating Future: Global Aviation Forecast 2012-2031

Global Market Forecast 2012-2031 Presented by: JOHN LEAHY

COO, Customers

Global Market Forecast 2012: Highlights

Market value of $4 trillion

Passenger aircraft ≥100 seats, Freight aircraft ≥10t

Source: Airbus GMF

GMF 2012 key numbers and 20-year change

World Fleet Forecast 2011 2031 % Change

RPK (trillions) 5.1 12.8 150%

Passenger aircraft fleet 15,560 32,550 109%

New passenger aircraft deliveries 27,350

Dedicated freighters 1,620 2,940 82%

New freighter aircraft deliveries 850

Total New Aircraft Deliveries 28,200

20-year demand for 28,200 new passenger and freight aircraft

20-year new deliveries of passenger and freight aircraft

Jet freight aircraft (>10 tons)

1,710 very large aircraft

Market value of $4 trillion

6,970 twin-aisle aircraft

19,520 single-aisle aircraft

Passenger aircraft (≥ 100 seats)

28,200 new aircraft

+353 aircraft over GMF 2011

+60 aircraft

+30 aircraft

+443 aircraft

Source: Airbus GMF

Continued economic uncertainties leading to lower growth in 2011-2012

The depth of this crisis and ancillary economic factors

have resulted in slower than expected growth Source: IHS Global Insight

Strong growth since 2004 Slowdown Deep crisis Recovery

Continued growth and recovery

World real GDP year-over-year quarterly evolution (%)

2006 2007 2008 2009 2010 2011 2012 -10%

2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1

After a strong recovery, ASK traffic now growing at a slower pace

Source: IHS Global Insight, OAG, Airbus

World ASK year-on-year growth rate (monthly) vs. GDP year-on-year growth rate (quarterly)

August passenger traffic up

Air transport growth is highest in expanding regions

Billions of people will increasingly want to travel by air

Source: IHS Global Insight, Airbus

Middle East

Africa

Latin America

Eastern Europe Expandin

Western Europe

North America

Yearly RPK growth

2012 -2031

1 billion

people 2012

6 billion

people 2012

1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015

A two-speed world

54 emerging economies.

Data Source: IHS Global Insight, Airbus

History Forecast

Emerging economies*

Mature economies

Real GDP growth (%)

J M M J S N J M M J S N J M M J S N J M M J S N

Emerging markets, driving growth

Emerging economies continue to lead the way

August 2012 data,

Source OAG (ASKs data), Airbus

ASKs year-over-year monthly evolution (%)

2009 2010 2011 2012

Emerging Markets traffic up

US traffic down

–0.1%

Western Europe

traffic up

Airbus is the market leader in deliveries

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Airbus

Boeing

Annual deliveries

Source: Airbus

Largest aircraft manufacturer for the last 9 years

Airbus order backlog

Backlog of 4,381 aircraft

North America

509 (12%)

America

352 (8%)

Middle East

432 (10%)

Corporate Jet,

Private, Military

30 (~1%)

Africa

79 (2%)

Europe & CIS

593 (14%)

Asia-Pacific

1,498 (34%)

At end July 2012, Percentages are rounded

In addition, undisclosed orders for 2 aircraft

Source: Airbus

Lessors

888 (20%)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Since 2000, air travel has grown 53%, with relatively flat growth in fuel demand

Source: IHS CERA, ICAO, OAG, Airbus

Traffic

Evolution of RPKs, ASKs and jet fuel demand (Base 100 in 2000)

Traffic growth

Jet fuel demand

1980 1990 2000 2010 2020 2030

High oil prices here for the long-term

Source: IHS CERA, Airbus; Average price in the year displayed

History Forecast Brent oil price (current US$ per bbl)

A320neo development is on schedule

EIS of A320neo in October 2015

A320neo offers environmental benefits

• Annual fuel savings of 15% equate to:

1.4 m litres of fuel: the consumption of 1000 mid size cars

• 3,600 tonnes of CO2

the CO2 absorption of 240,000 trees

• NOx emissions 50% below CAEP/6

• 500nm more range

or 2 tonnes more payload

• Aircraft noise up to 15dB below Stage IV

Significant environmental improvements

Air travel has proved to be resilient to external shocks

Source: ICAO, Airbus

World annual traffic (RPKs - trillions)

*Since 2000

1970 1975 1980 1985 1990 1995 2000 2005 2010

Gulf Crisis Oil Crisis Asian Crisis

WTC Attack Oil Crisis SARS

Financial Crisis

Main drivers of traffic and fleet growth

• More people, bigger cities, more wealth

• Emerging markets, more first time flyers and a growing middle class

• Growing tourism and internationalisation will stimulate demand

• More liberalisation to come, particularly in Asia, Africa and Latin America

• Replacement of less eco-efficient aircraft,

– 2/3 of existing fleet will be replaced

• Low cost model set to grow in Asia-Pacific and Africa

• Growth in the number of Aviation mega-cities driving demand for VLAs

0 20,000 40,000 60,000 80,000 100,000 120,000

Trips* per capita - 2011

2011 nominal GDP per capita ($US)

Emerging economies drive strong travel growth

Source: Sabre (annualized September 2011 data), IHS Global Insight, Airbus

* Passengers originating from respective country

In 2031 vs 2011

China & India

average propensity

to travel

France

United Kingdom

Germany

China & India Average 2011

China & India Average 2031

0 1,000 2,000 3,000 4,000 5,000

Asia-Pacific

Europe

North America

Middle East

Latin America

Africa

Asia-Pacific airlines to lead in world traffic by 2031

2011 traffic 2012-2031 traffic 28%

20-year world annual traffic growth

World Traffic by airline domicile (RPK billions) % of 2011

world RPK

20-year

growth

% of 2031

world RPK

Source: Airbus

Domestic PRC and Domestic India lead the growth in RPKs 2011 to 2031

Source: Airbus

0 500 1,000 1,500 2,000

Domestic Russia

Japan - USA

PRC - USA

Asia - Middle East

Western Europe - North Africa

Domestic Asia

Central Europe - Western Europe

Western Europe - PRC

Indian Sub Continent - Middle East

Western Europe - Middle East

Domestic Brazil

Asia - Western Europe

Intra Asia

Asia - PRC

Western Europe - South America

Domestic India

Western Europe - USA

Intra Western Europe

Domestic USA

Domestic PRC

2012 – 2031

Largest 20 flows in 2031, by RPK (billion)

2011 traffic 2012-2031 traffic Domestic PRC

2031 Share of

World traffic

2011 cities with more than 10,000 daily long-haul passengers

42 cities in the world handle more than 10,000 long haul passengers per day, …

Long-haul traffic is concentrated on a few main aviation centres

Traffic as of month of September; Source: Airbus

Long haul traffic: flight distance >2,000nm, excl. domestic traffic;

42 Aviation

Mega-cities

(2011)

> 90% of long-haul traffic

on routes to/from/via

42 cities

… and by 2031 it will be over 90

Long-haul traffic is concentrated on a few main aviation centres

Traffic as of month of September. Source: Airbus

Long haul traffic: flight distance >2,000nm, excl. domestic traffic;

2031 cities with more than 10,000 daily long-haul passengers

92 Aviation

Mega-cities

(2031)

> 95% of long-haul traffic

on routes to/from/via

92 cities

The 80th A380 was delivered to SIA on July 31st 2012

81 A380 deliveries to end August

A380s link the worlds Aviation Mega-cities

Over 100 flights per day carrying more than 1m passengers per month

A380 weekly departures: Week 33 August 2012 - Source: OAG

Top 10 A380 airports ranked by weekly departures

Dubai Singapore Frankfurt London (LHR)

Paris (CDG)

Sydney Hong Kong

Seoul (ICN)

New York (JFK)

Tokyo (NRT)

Air France

China Southern

Emirates

Korean Air

Lufthansa

Malaysia Airlines

Qantas

Singapore Airlines

An A380 takes off or lands every 7 minutes

Carrying more passengers in more comfort to more and more destinations

EK Photo credit Markyharky

Air travel remains a growth market

1971 1981 1991 2001 2011 2021 2031

Air traffic has doubled

every 15 years

Air traffic will double

in the next 15 years

Airbus

GMF 2012

total traffic

2011-2021

2021-2031

World annual RPK (trillion)

Demand for over 27,000 new passenger aircraft

15,556

New aircraft 27,347

+ 3.8 % per annum

Fleet size

Passenger aircraft above 100 seats

32,551

10,352

16,995

10,000

15,000

20,000

25,000

30,000

35,000

Beginning 2012 2031

Stay in service

Replaced

Growth

Source: Airbus

Single-aisle: 69% of units; Twin-aisle: 44% of value

Passenger aircraft (≥ 100 seats) and jet freight aircraft (>10 tons)

Source: Airbus

12,000

16,000

20,000

Single-aisle & Small jet freighters

Small-twin aisle & Regional freighters

Intermediate twin-aisle & Long range freighters

Large aircraft & Large freighters

GMF 2011

GMF 2012

69% 17% 8% 6% % units

40% 27% 17% 16% % value

20-year new deliveries of passenger and freighter aircraft

12,160

3,210 12,570

10,000

15,000

20,000

25,000

30,000

Beginning 2012 Fleet in 2021 Fleet in 2031

Open Demand

Backlog

Stay-in-service from today’s fleet

Strong open demand for A320ceo and A320neo

Single-aisle aircraft in-service

A320neo will continue to build on success of the A320 Family

Source: Ascend, Airbus

Summary

• Strong growth in passenger traffic – resilient growth through in a

turbulent economy

• Demand for over 28,000 new aircraft by 2031 – ~27,300 passenger

aircraft and nearly 900 freighter aircraft

• Replacement of ageing fleets – 20 year demand for more than 10,000

passenger aircraft for replacement, largely in the single-aisle segment

• A quarter of the demand for twin-aisle aircraft – demand for nearly

7,000 small and intermediate twin-aisle aircraft

• VLA demand driven by aviation mega-cities – more than 90% of all

long-haul passengers will fly to, from or through these cities

Global Market Forecast 2012-2031 Presented by: CHRIS EMERSON

SVP, Future Programmes & Market Strategy

Aviation is a major driver of the world economy

millio

Job supported

World-wide

Globally

contributes $2.2

trillion

Aviation’s global

economic impact

19th If aviation was a

country ranked

by GDP

2,681,000,000 passengers carried in 2010

$5.3 trillion worth of cargo shipped by

air in 2010

of global man-made CO2

emissions come from aviation

Source: ATAG

Month 200X

Despite economic uncertainties, the world traffic continued to post strong growth…

World annual traffic (RPKs - trillions)

* since 2000

1970 1975 1980 1985 1990 1995 2000 2005 2010

Gulf Crisis Oil Crisis Asian Crisis

WTC Attack Oil Crisis SARS

Financial Crisis

Month 200X

…and is expected to remain resilient in the future

1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031

Air traffic has doubled

every 15 years Air traffic will double

in the next 15 years

4.7% Airbus

GMF 2012

total traffic

2011-2021

2021-2031

World annual RPK (trillion)

Economy spending less time in recession even through recent crises

% of time spent in recession at world level

1919-1939 1940-1962 1963-1985 1986-2011

Source: IHS Global Insight, Airbus

Short term economic growth will be driven by emerging markets

Europe North America

Asia* Middle East

Latin America

Pacific CIS Africa Indian Sub Continent

Month 200X

Source: IHS Global Insight (August 2012), Airbus *- Excluding Indian Sub-continent and PRC

2012 and 2013 real GDP forecast by region

2013 World Average

2012 World Average

Emerging regions will represent a larger share of traffic in 2031

2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031

Advanced - Advanced Advanced - Emerging Emerging - Emerging

Month 200X

World annual RPK (share of total), by type of flow

20-year annual traffic

growth

Traffic with emerging markets represent 55% of traffic today, 68% in 2031

Source: Airbus

... driving the center of gravity of traffic to the south and east

Geographic centre of gravity of departing/arriving/connecting passengers per city

Traffic as month of September; estimates for historic passenger derived from offered seats;

respective centres of gravity as median of city coordinates weighted by passenger traffic

2021 2031

Source: OAG, Airbus

Traffic to, from and within USA and Western Europe are the largest...

3% 4% 5% 6% 7% 8%

Month 200X

2011 RPK from/to/within traffic

2011-2031 RPK traffic CAGR Size of the bubble is proportional to 2011 RPK traffic

Western Europe

Indian Sub-

Continent

Middle East

South America Japan

Caribbean Pacific

Australia

Canada Central

America Russia

Asia-Pacific*

Source: Airbus

*-Asia-Pacific is comprised of PRC, Asia, Pacific, Japan, India Sub-continent and Australia/NZ

Traffic to, from and within USA and Western Europe are the largest...

3% 4% 5% 6% 7% 8%

Month 200X

2011 RPK from/to/within traffic

2011-2031 RPK traffic CAGR Size of the bubble is proportional to 2011 RPK traffic

Western Europe

PRC Indian Sub-

Continent

Middle East

South America

Caribbean Pacific

Australia

Canada Central

America

Russia

Source: Airbus

*-Asia-Pacific is comprised of PRC, Asia, Pacific, Japan, India Sub-continent and Australia/NZ

Asia-Pacific*

Visiting friends and relatives is a key driver of traffic growth

Region definition according to United Nations; Asia including Oceania, countries of the Middle East and countries of CIS,

Europe including Russia

2010 world inter-regional migration corridors per sending and receiving region (million persons) North America

Europe

America

Africa

America

Europe

Latin America

Africa

•>215M live outside their country of birth

•700K foreign students studying in the US

•Visiting friends and relatives remained much more stable than business travel

•North America and Europe as largest destinations of immigration

•Asia-Pacific growing as a destination for immigrants

Source: UN Population Division, Airbus

Population (billions) Urbanisation rate

World urban population expected to rise from 3.5 billion people today up to 5 billion by 2030

Urban population: 1.3B 2.3B 3.5B 5.0B 6.4B

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Urban population

Rural population

Urbanisation rate

History Forecast

Source: UN Population Division, Airbus

Urbanisation and subsequent wealth generation leads to more flying

0% 20% 40% 60% 80% 100%

Month 200X

Propensity to travel per country

Source: Sabre, UN Department of Economic and Social Affairs, Airbus

% of population in Urban centers

Trips per capita (logarithmic scale)

671 701 678

265 263 254

2011 2021 2031

Asia-Pacific

North America

Europe & CIS

Leading to a larger “Global Middle Class”

Global Middle Class* (Millions of people)

% of World population 30%

8,400 World population

* Households with daily expenditures between $10 and $100 per person (at PPP)

Source: Kharas and Gertz, Airbus

Airlines are becoming more efficient

1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031

Other costs

Fuel cost

Unit cost (cents/RPK in 2011 US$)

History Forecast

40% % cost from fuel 29% 13% 13% 33% 36%

Source: ICAO, EIA, HIS Global Insight, Airbus

The air cargo industry today ensures economic growth through timely delivery

$5.3 trillion worth of cargo shipped by air in

worth of cargo shipped by

air in 2011

>1,600 Aircraft ≥ 10t, performing cargo only

operations

>200 Airlines Performing freight or freight

and passenger operations

50% North America represents 50%

of the dedicated cargo fleet in

service

Percentage growth of 2011

traffic above 2008 peak

Source: ATAG, Seabury, ASCEND, Innovata, OAG, US DOT RITA, Airbus

Like the passenger market, fastest growth from traffic between and within emerging regions

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031

Developed to Developed

Emerging to Emerging

Emerging to Developed

Developed to Emerging

Future Historical

Growth

2011-2031

Freight traffic growth (billions of FTKs)

Source: Seabury, Airbus

20-year world annual FTK growth

Demand for 851 new freighter aircraft, largely destined for North America, Asia-Pacific and Europe

Source: Airbus

411 440 523

Small jets Regional & Long range

Conversions

New Freighters

North America

Asia-Pacific

Europe 16%

Middle East 7%

Latin America

3% Africa

CIS 1%

New Aircraft demand by Region Total Aircraft demand by New and Converted

…taking all of these factors into account and many more

A 20 year aircraft demand and passenger traffic forecast

Airlines

• Business Models • Operations • Competition • Geopolitics

Trends Analysis

• Consumer & Travel Surveys

• Tourism • Migration • Traffic flows • Passenger demands

Governments & Regulators

• Liberalization/ deregulation

• Investments and constraints

• Geopolitics

Network Development

• Route planning • Origin and

destination demand • Population centers

Traffic

• Economics and Econometrics

• Fuel costs • Yields • Load Factors • Trade and Value of

Fleet trends

• Aircraft economics • Utilization • Fleet age and

retirements

Market Research Forecast

>200.000 O&D city pairs

>10.000 country pairs

157 global traffic flows

>1.000.000

O&D city pair routings

Macro traffic forecast Micro network forecast

Details behind the forecast

Summary

Aircraft Demand

20 Year Aircraft Demand

(Thousands)

2031 RPKs

(Trillions) Africa CIS Latin America Middle East North America Europe Asia-Pacific World

980 Aircraft 1,240 Aircraft 2,110 Aircraft 1,960 Aircraft 6,200 Aircraft 5,840 Aircraft 9,870 Aircraft 28,200 Aircraft

3% of 2031 World RPKs

>12 trillion RPKs in 2031

Traffic by

domicile:

Asia-Pacific

Europe

North America

Middle East

Latin America

CIS Africa

Source: Airbus

Navigating Future: Global Aviation Forecast 2012-2031

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Transcript of Navigating Future: Global Aviation Forecast 2012-2031

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