Pages 1 to 24 of BCA 2010 Market Forecast · Commercial Aircraft Market Forecast, our 20-year view...

moving forward>>>

Bombardier Commercial Aircraft >>> Market Forecast 2010-2029

Bombardier Commercial Aircraft >>> Market Forecast 2010-2029 02

Executive Summary >>>

Economic Trends and Key Factors >>>

Airline Industry Trends >>>

The Forecast >>>

Conclusion >>>

Geographic Detail >>>

03

07

16

25

34

36

table of contents >>>

executive summary >>>

moving forward >>> 03

Welcome to the Bombardier Aerospace Commercial Aircraft Market Forecast, our 20-year view of the market for 20- to 149-seat aircraft.

Over the last twelve months, the aviation industry, like many other industries, has faced one of the most challenging environments since the 'Great Depression' of the 1930s. Though negatively affected, the airline industry fared better than many others. Airline operating profits are forecastby IATA to be positive in 2010. The agility exhibited by the aviation industry when facedwith extreme challenges gives BombardierCommercial Aircraft a sense of confidence inits future. Moving forward, we are confidentin the resiliency of the global economy. We are confident in the adaptability of the aviation industry. We are confident that thecommercial aviation industry will continue todevelop and grow over the next twenty years.

The evolution of the industry is occurring globally in both developed and emerging airline markets. Airlines are creating in somecases, and refining in others business modelsthat are designed to increase profitabilitywhile reducing costs and infrastructure inefficiencies. A prime factor in these

models is the effective use, deployment and optimization of modern, efficient aircraft.

Over the next 20 years, Bombardier forecasts delivery demand for 12,800 aircraft in the 20- to 149-seat market. This segment of the overall industry will generate $612 billion in total revenue for original equipment manufacturers (OEMs).Within that market the 20- to 99-seat segment will account for 36% of the revenues $219 billion, while the 100- to 149-seat segment will generate 64% of revenues of $393 billion.

Continued Growth: Economic growth is the primary driver of our forecast model. IHS Global Insight expects the global economy to grow at a rate of 3.2% per year over thenext 20 years, an increase from last year'sforecast of 2.98%. The airline industry willcontinue to benefit as airline passenger demand is closely linked to economic growth.

Optimization: Airlines are continuously refining their business models. This is particularly true in an environment where competition is high and yields are low. Airlines strive to optimize their fleet allocation to best serve their passengers. Airline passengers expect frequency, schedule, comfort and competitive fares while travelling on modern aircraft. New aircraft designs continue to focus on optimizing performance through technology innovations, increased performance and reduced fuel burn and noise levels.

Over the next 20 years, Bombardier Commercial Aircraft forecasts delivery demand for 12,800 aircraft between

20- to 149-seats, valued at $612 billion.



Delivery Forecast (Units)

Seat Category

Aircraft Total

60- to 99-seats

100- to 149-seats

20- to 59-seats

2010-2029

12,800

5,900

200

6,700

Geographic Shift: Growth potential fromdeveloping countries is strong as economicgrowth forecasts are well above the average.As a percentage of the total deliveries, new aircraft demand will grow fastest in emergingmarkets within the Asia/Pacific, African, andLatin American regions. However, the 2008-2009 economic recession has slowed the pace of this emerging demand for the near term.

Environmental Focus: Environmental concerns also influence the course of aviation. Building on a strong track record of technological innovation, the industry in aggregate has formally committed to a future of carbon-neutral growth and increased environmental sustainability.

The Evolution of the 20- to 149-seat market

The 20- to 59-seat segment remains the largest fleet component of the regional airline industry. However, demand for new aircraft in this seat segment is expected to be verylow. The few new deliveries in this segmentare expected toward the end of the

20-year forecast period, driven by the need to replace obsolescent aircraft. Untilthen, significant activity will persist in the secondary market. In particular, developingmarkets will offer considerable opportunitiesfor pre-owned 50-seat regional jets as they grow their airline industries.

The 60- to 99-seat segment is becoming the new foundation of the regional market. Regional airlines are shifting their fleets to larger aircraft, both turboprop and jet. These aircraft offer greater passenger capacity and lower operating costs per available seat. They also satisfy passenger demand for frequent service to primary, secondary andtertiary airports. Additionally, regional aircraftare increasingly configured to provide twoclasses of seating in order to provide seamless services across their fleet.


0

20-Year Worldwide Fleet Forecast

60- to 99-seats

11,200Units

17,300Units

4,000

8,000

12,000

16,000

20,000

2009 2029

5,30

0

9,00

0

2,200

7,00

01,

300

Source: OAG Aviation Solutions, Bombardier Analysis

Total FleetUnits

100- to 149-seats

20- to 59-seats

3,70

0

New Aircraft demand will grow fastest in emergingmarkets within Asia/Pacific, Africa and Latin America.


The 100- to 149-seat segment represents the strongest growth component in terms ofdeliveries within the 20- to 149-seat market.With the arrival of new aircraft designedspecifically for this segment come the comfort, flexibility, lightweight design and'game changing' economics needed to stimulate demand.

At Bombardier Commercial Aircraft, we areconfident the airline industry will continue tostrengthen as the global economy improves.Moving forward we are confident that therewill be a demand for new, larger, more fuel efficient aircraft with 12,800 new deliveriespredicted over the next 20 years.

The Evolution of the 20- to 149-seat market (continued)



economic trendsand key factors >>>


Airline passenger demand is highly correlated to worldwide economic growth. In the second half of 2009, the worldwide economy beganits recovery from a severe global downturn.Moving forward, worldwide Gross DomesticProduct (GDP) is projected to grow at a compound annual growth rate (CAGR) of3.2% over the next 20 years.

Airline traffic growth in developing marketswill continue to increase. Growth in airline passenger traffic is related to changes in the population's propensity to travel. Directly linked to changes in GDP per capita, the propensity to travel increases exponentially in markets where GDP per capita is below $15,000 per year, a common occurrence in developing markets. Increased demand for air travel, in turn, drives increased demand for aircraft.

North America and Europe have well-established aviation markets. With NorthAmerican and European economic growthbelow the worldwide average at 2.7 % and1.9 % respectively, airline passenger and fleetgrowth rates will be proportionately slower.

Economic and Aviation Industry Growth

economic trends and key factors >>>


Strong economic growth combined with an amplified propensity to travel will lead to increased aircraft deliveriesin developing aviation markets.

GDP Per Capita

Source: IHS Global Insight, MIDT data, Bombardier Analysis

Trip

s P

er C

apit

a

Propensity to Travel

10

1

India

China

Russia

South AfricaMalaysia

Portugal

Hong KongAustralia

Germany

CanadaUnited States

Ireland

Switzerland

Qatar

Denmark

Israel

0.001

0.01

0.1

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000

GDP Growth Rates Compound Annual Growth Rate (2010-2029)

Source : IHS Global Insight

1%

0%

2%

3%

4%

8%

5%

6%

7%

Wo

rld

3.2%

Afr

ica

4.4%

1.9%

Ind

ia

6.3%

Ch

ina

7.4%

2.7%

Latin

Am

eric

a

4.0%

Mid

dle

Eas

t

No

rth

Am

eric

a

2.4%

Asi

a/P

acifi

c(e

x. C

hina

, Ind

ia)

Eur

op

e

4.0%

Source: IHS Global Insight

0

GDP Distribution by Region(2009 and 2029)

Asia/Pacific (ex. China)

China

Europe

Rest of World

North America

Tota

l GD

P (

$ Tr

illio

n) $45 Trillion

(48% of World GDP)

10,000

20,000

30,000

50,000

40,000

60,000

70,000

80,000

90,000

100,000

2009 2029

$20 Trillion(39% of World GDP)

By way of contrast, China and India will have strong GDP growth rates and travel demand. China will experience economicgrowth of 7.4% over the next 20 years, India6.3%. This strong growth rate, combinedwith an amplified propensity to travel among the developing middle-class population, will lead to increased new aircraft deliveries to meet demand.

By 2029, economies outside of North America and Europe will account for 48% of the global GDP, up nine points from their current position.

Economic and Aviation Industry Growth (continued)


Global GDP outside of North America and Europe will increase nine percentage points, over the forecast period representing 48% of World GDP by 2029.


Fleet seats, the total number of passenger seats in all in-service commercial aircraft, is directly related to GDP growth. As a measure of airline capacity, total fleet seatsare anticipated to grow by 75% over the forecast period in the 20- to 149-seat market.

The 2008-2009 economic recession resulted in decreased airline passenger demand and airline capacity reductions worldwide. Intra-regional capacity declined by 2.3% from 2008 to 2009. However, the emerging aviation markets of Africa,China, Latin America and the Middle East grew in scheduled seat capacity. ThoughNorth America and Europe saw capacity decreases during the recession, more positive capacity growth trends are evident in the first-half of 2010.

As of June 2010, global capacity growth is increasing at a year-over-year rate of 3.5%.

Airline Capacity



0.4

0.6

0.0

0.2

0.8

1.0

1.2

1.4

1.6

1.8

1999

Fle

et S

eats

(mill

ions

)

2004 2009 2014 2019 2024 2029

Commercial Aircraft Capacity Worldwide by Seat CategoryFleet seats, 20- to 149-seat aircraft, Calendar year 1999-2029

20- to 59-seats

Actual Forecast

60- to 99-seats 100- to 149-seats


Total fleet seats will grow by 75% in the 20- to 149-seat market over the next 20 years.

Tota

l Sch

edul

ed S

eats

(mill

ions

)

1000

1500

0

500

2000

2500

3000

3500

4000

2000 2003 2004 2005 2006 2007 2008 2009

Commercial Aircraft Capacity WorldwideTotal Scheduled Airline Seats By Year

Sources: OAG Aviation Solutions

20- to 59-Seats 60- to 99-Seats 100- to 149-Seats 150- to 199-Seats 200+ Seats

400

600

0

200

800

1000

1200

Africa Asia/Pacific China Europe

Tota

l Sch

edul

ed S

eats

(mill

ions

)

India LatinAmerica

MiddleEast

North America

Commercial Aircraft Capacity by RegionsTotal Scheduled Airline Seats By Year

2008 2009

Airline Capacity (continued)



Overall global scheduled capacity has returned,showing a year-to-year increase of 3.5%.

Decreases in capacity are related to the number of parked and inactive commercialpassenger aircraft. As of June, 2010 inactiveaircraft total 1,912 units, up 57% from a tenyear low of 1,211 in 2007. It is likely that theolder generations of these aircraft will not return to commercial passenger service.

The price of oil remains a key factor in driving the profile and size of the future aviation fleet. Fuel and labour costs are the two highest operating cost factors for airlines. Today, the combination of labour and fuel costs account for nearly half of airline operating costs. Fuel represents 24% of costs, or 2.97 cents per available seat mile (ASM), while labour costs currently represent 25% of costs, or 3.11 cents per ASM as measured by the Air Transport Association of America.

Oil Price and Volatility


Fuel and labour cost represent nearly 50%of airline operating costs today.

FuelLabour

Source: Air Transport Association of America.

Operating Cost History: Fuel & Labour

0.0

1.0

2.0

4.0

5.0

6.0

3.0

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

Uni

t O

per

atin

g C

ost

(C

ents

per

Ava

ilab

le S

eat

Mile

)


Oil Price and Volatility (continued)


Oil prices and volatility impact airline decisionsto replace or retire aircraft. Oil is forecast to average $103 per barrel over the next 20 years.

$200

Oil Price Forecast

Source: US Energy Information Administration (EIA), Annual Energy Outlook 2010

$25

$50

$0

$75

$100

$125

$150

$175

$225

1980

2008

US

do

llars

per

bar

rel

AEO2010 20-Year Average $10319

85

1990

1995

2000

2005

2010

2015

2020

2025

2030

2009 EIA Forecast2010 EIA Forecast

Oil averaged $19 per barrel in the 1990s and $51 in the 2000s. Over the last fiveyears, a new plateau was reached, with oil averaging $71 per barrel while hovering justabove $80 per barrel in the first quarter of2010. The last two years were years with extremely volatile oil prices, reaching a priceof over $145 per barrel in the summer of2008 and a low of under $35 per barrel in the winter of 2009.

Oil prices impact airline decisions to replace or retire less efficient aircraft types. This influence is evident with the increase in demand for new generation, fuel-efficient aircraft, both turboprop and jet. Oil price volatility affects the ability of airlines to forecast direct operating costs accurately enough to make cost-based fleet renewal decisions.

Current forecasts by the US Energy Information Administration (EIA) indicate that the price of oil will average $103 USD per barrel during the 20-year forecast period.


Aircraft retirements impact aircraft delivery volumes.

Old aircraft are historically retired from commercial service as newer, more cost-effective, and fuel-efficient aircraft become available. Some of these aircrafttransition from commercial service into cargo operations.

A wide array of factors impact airline retirement timing:

• aircraft size, capacity and age• new product availability• engine efficiency (fuel burn)• environmental regulations

(noise, emissions)• specific airline policies, practices

or branding• financial and tax considerations

(operating and maintenance costs, depreciation)

Age and refurbishment costs are the primarydrivers of whether inactive or parked aircraftreturn to service. As of June 2010, DC9,MD80, F100 and 737 Classic aircraft haveseen their scheduled capacity reduced by20% from 2008.

Retirements


We anticipate that 60% of today’s 20- to 149-seat fleet,will retire over the period of the forecast.


Commercial Aircraft Retirement Curve

Standard Commercial Passenger Aircraft Retirement Curve

80% retired from commercial passenger service

0%

10%

20%

40%

50%

60%

30%

70%

80%

90%

100%

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45

Source: Bombardier Analysis

Retirements (continued)

In Service Fleet Forecast20- to 149-seat aircraft

11,200

17,300

6,100(48%)

6,700(52%)

4,500

Growth

12,800Deliveries

Retirements

RetainedFleet

2009 In Service Fleet 2029 In Service Fleet


In Service Aircraft 15 Years of Age or Over

Source: OAG Aviation Solutions, All Passenger Aircraft, 2010

500

0

1000

1500

2000

2500

40- to59-Seats

60- to99-Seats

100- to149-Seats

150- to175-Seats

176- to230-Seats

230+Seats

20- to39-Seats

Uni

ts

More than half of the current commercial aircraft fleet will be replaced in the next 20 years due to technical obsolescence, cost inefficiencies, age and individual airline fleet decisions. The retirement of older aircraft types will have a positive impact on the demand for new aircraft.

Bombardier analysis shows that on average80% of aircraft will retire from commercialpassenger service within 28 years.

Retirement activity will be high in the 20- to59-seat segment of the market, with 7 out of 10 aircraft being retired. As these aircraftretire they will be replaced by larger aircraft. In the absence of new in-production 20- to59-seat aircraft, this segment, will be reducedto 8% of the 20- to 149-seat fleet by 2029.

By way of contrast, the 60- to 99-seat segment is projected to retire only 50% of its current fleet during the next 20 years.

The growth of this segment is such that in twenty years it will represent 40% of the 20- to 149-seat commercial aircraft fleet.

The 100- to 149-seat segment is projected to retire 3,000 aircraft. This segment will represent 52% of the total 20- to 149-seat fleet in 2029. Both retirements and growth in this segment will be high.


airline industrytrends >>>


The International Air Transport Association (IATA) in March 2010 suggested that international air traffic growth has suffered a three-year setback. IATA believes the 3.5% downturn in passenger demand experienced during the recent recession created a "permanent" loss of 2.5 years' worth of growth opportunities.

In June 2010, IATA predicted that the industry will achieve $2.5 billion net profitability in 2010, versus a $2.8 million loss predicted three months earlier. The difference between the two statements reflects a significant turnaround of the industry and its sensitivity and responsiveness to global economics.

The pace of the airline industry recovery varies by region. Asia/Pacific carriers willenjoy the fastest turnaround with forecast profitability of $2.2 billion. Airlines in North America are expected to realize a return of $1.9 million, a major turnaround from a March forecast of sluggish market growth and losses of $1.8 billion.

Latin America is expected to be the only region that will post two consecutiveyears of profitability, while Africa and the Middle East are expected to record smallprofits in 2010.

In the near term, Europe is predicted to realize a net loss at the end of 2010. Some of this loss can be attributed to the eruptionof the Icelandic volcano that severely disruptedEuropean passenger travel during April andMay 2010.

Airline Economics

airline industry trends >>>


In June, 2010, IATA predicted that the industry willachieve $2.5 billion net profitability in 2010.

Airline Industry Net Profit History and Forecast(Billions USD)

Source: IATA, June 2010

Region

World

North America

Europe

Asia/Pacific

Middle East

Latin America

Africa

2007 2008 2009 2010F

12.9

3.7

6.4

3.0

-0.1

0.1

-0.2

-16.0

-9.6

0.0

-4.7

-0.3

-1.4

-0.1

-9.9

-2.7

-4.3

-2.7

-0.6

0.5

-0.1

2.5

1.9

-2.8

2.2

0.1

0.9

0.1

The commercial aviation industry can be segmented into three generally distinct business models. Each model has particularcharacteristics: Mainline carriers, Low FareCarriers (LFCs) and Regional carriers. Aircraftcapacities range from less than 20 seats togreater than 600 seats within the three types of business models.

Mainline carriers customarily operate fleets of aircraft with 100 or more seats inhub-and-spoke network models, serving numerous cities and countries. As fleets have evolved over time, Mainline carriershave consistently replaced older types withnewer and more efficient models. In addition,Mainline network optimization through specialization has led to strong partnershipsbetween Mainline and Regional carriers.

Airline Business Models


Historic Distribution Of United States Domestic Market ShareBy Airline Type

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

69%

Source: OAG Aviation Solutions, flight schedules

Historic Distribution Of EuropeanDomestic Market ShareBy Airline Type

Regionals

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Mainline LFCs

67%

64%

60%

57%

55%

52%

50%

47%

46%

16%

18%

19%

21%

22%

23%

25%

27%

29%

29%

15%

16%

17%

19%

21%

23%

23%

23%

24%

25%

75%

72%

68%

66%

64%

62%

59%

56%

54%

53%

7%

7%

10%

13%

17%

21%

24%

28%

31%

32%

18%

21%

22%

20%

19%

18%

17%

16%

15%

15%

Regional aircraft operate more than one-third of all commercial passenger flights worldwide.


Airline Business Models (continued)


City-Pairs Served By Low Fare Carriers Worldwide


0

500

City

-pai

rs

14% CAGR

1000

2000

1500

2500

3000

3500

2003

2005

2004

2006

2000

2002

2001

2007

2008

2009


Regional carriers provide hub feed and market access to smaller cities that wouldotherwise be cost prohibitive to serve. Hubfeed allows Mainline carriers to serve theirpassengers with a more seamless travel experience from their point of origin to theirfinal destination. Regional carriers normallyoperate turboprop and jet aircraft of less than 100 seats. These aircraft are optimized

to provide service on short- to medium-haulroutes where traffic levels are low. Regionalaircraft operate more than one third of allcommercial passenger flights worldwide.

The growth of the LFC segment this decadehas been astounding. LFCs typically offerpoint-to-point service for primarily leisure but also for business passengers. While

LFC models vary greatly, they generally compete using low fares and utilize 70- to200-seat aircraft.

Historically, LFC growth has been strongest in North America and Europe, but today LFC carriers are present in nearly every region of the world.

Labour costs represent a quarter of an airline's operating costs. Managing these costs has been critical for Mainline carrierprofitability as they compete against LFCs forpassengers. Labour costs measured againstavailable seat-miles (ASM) is the foremostmeasure of productivity for airlines. In the USmarket, productivity decreased from 1997 to2001, as costs were higher in proportion toASMs. Since then, from 2002 to 2009, theASM/labour cost ratio has improved by an average of 3.9% per year.

Labour productivity and costs have beenmanaged through contractual negotiations,internet ticket distribution, electronic boarding operations, system technology improvementsand the outsourcing of non-core services.One form of cost optimization involves outsourcing of scheduled services to Regional airline affiliates. These carriers are commonly compensated by their Mainline partners through capacity purchase agreements (CPA) or a pro-rated revenue sharing agreement. Under a CPA, the Mainline carrier purchases the Regional's capacity based on fixed fees for completeddeparture and/or block hours. During the past two years, some US Mainline carriers

have reversed a decade-long trend by increasing the percentage of pro-rate versus CPA services.

Labour Trends


From 2002 to 2009, airline labour productivity has improved by an average of 3.9% per year.

US Airline Labour ProductivityLabour Costs: ASMs (000)

1,500

2,000

2,500

3,000

19

97

Pro

duc

tivity

: AS

Ms

(000

) per

FT

E

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

Source: Air Transport Association of America (ATA), 2009FTE: Full-time equivalent employee, 2000 base year


An ongoing limitation on Regional carrier outsourcing opportunities has been “scope clauses”, negotiated agreements between Mainline carrier labour and management. Scope clauses can restrict the use, number and seating capacity of regional aircraft in the Mainline carriers' network. These clauses are predominantly found in US and European airline labour agreements. Driven by economic and competitive necessity, scope clauses have evolved with the industry to become less restrictive over time, thus allowing for greater network optimization through specialization.

Bombardier anticipates that scope clauses will continue to evolve, permitting up to 100-seat aircraft to be flown by Regional carriers. Changes to scope clauses that allow Regional airlines to fly more, larger aircraft will have a positive impact on 20- to 149-seat aircraft delivery demand.


Labour Trends (continued)

Bombardier anticipates that scope clauses will continue to evolve, permitting up to 100-seataircraft to be flown by Regional carriers.


Turboprops and Jets: Optimization in Practice


Turboprop and regional jets are critical components for optimizing airline networks.Airlines are embracing turboprops as themost cost-effective method of serving short-haul markets, while regional jets are preferredfor longer-haul hub feed markets. Increasingoil prices heighten the importance of fuel efficiency within airline fleets.

High oil prices have contributed to the expanded deployment of turboprops by airlines worldwide. This in turn has causedmanufactures to increase the size and capability of these aircraft.

As environmental considerations increasingly influence the industry, the benefits of turboprops becomes more significant. Designed for short-haul routes, turbopropsare more fuel efficient than similar sized jetsand generate a smaller carbon footprint. Critical to airports and the surrounding community, new generation turboprops also produce a smaller noise footprint above and around the airport. Of the 6,100regional aircraft to be delivered, 2,400 will be turboprops, representing 39% of the total of 20- to 99-seat deliveries.

Offering increased capacity and lower costsper available seat, the current generation of20- to 99-seat regional jets will experiencedemand for 3,700 units during the next 20 years. These aircraft are designed to

meet customer demand in terms of improved economics, cabin comfort with a reduced environmental footprint on long, thin regional routes.


Short-Haul Monthly Departures: Turboprops and Jets


0

50,000

150,000

100,000

Mo

nthl

y D

epar

ture

s

Distance (SM)

250,000

200,000

350,000

300,000

1-100 101-200 201-300 301-400 401-500 501-600 601-700 701-800

Currently Turboprop Currently Jet


Environmental issues play an increasing role in shaping the future of the airline industry. Air quality and noise are the focus of international environmental regulation. The aviation community has shown great leadership and progress on environmental issues including local air quality, aircraft engine emissions as measured by fuel efficiency, greenhouse gases such as CO2, and community noise.

Local Air Quality

• Over the past 15 years, oxides of nitrogen (NOx) from aircraft engines havebeen progressively reduced by 50%

• Carbon monoxide emissions have been reduced by 50% while unburned hydrocarbon and smoke have diminishedby 90% over the past 40 years

Aircraft Emissions (directly related to fuel efficiency)

• Modern aircraft achieve fuel efficiencies of3.5 litres per 100 passenger kilometres (km)

• Today's aircraft fly three times farther on the same amount of fuel than 30 yearsago (75% fuel efficiency gain per passenger/km)

• Despite growth in passenger traffic at an average of 5% each year, aviationhas reduced its emissions growth to 3% each year

Community Noise

• Today's aircraft are 20 decibels quieterthan they were 40 years ago

• The latest International Civil Aviation Organization (ICAO) standard for newlymanufactured aircraft, Stage 4, requiresnew aircraft to be at least 10 decibels quieter than the previous standard

• The introduction of continuous descentapproaches will reduce aircraft fuel burn and noise levels on approaches to airports

Airlines and the Environment


Source: Bombardier Analysis, 110-seat class aircraft

Next GenerationAircraft*

CO2 Emissions

In-ProductionAircraft*

>20%

>40%

Out-Of-ProductionAircraft*

CO

2 E

mis

sio

ns P

er T

rip

The aviation industry is making further environmental improvements with guidance from self-regulating bodies such as the International Civil Aviation Organization (ICAO) and Air Transport Action Group (ATAG). Key stakeholders, including Bombardier, are committed to moving toward carbon-neutral growth within the aviation industry. This commitment anticipates average fuel efficiency will improve by 1.5% per annum with carbondioxide (CO2) emissions from aviation, peaking before 2020. Beyond 2020, carbondioxide emissions from aviation will stabilizeand then decline despite the anticipated increase in traffic growth. Achieving these targets will lead to a carbon neutral aviationindustry growth.

Environmental challenges are being addressed from a global perspective using a four pillars approach:

• Technology: new aircraft designs, new lightweight materials, new engine advances

• Operations: improved operational practices, more efficient flight procedures, weight reduction measures

• Infrastructure: more efficient air trafficmanagement and airport infrastructure(The Single European Sky and the USNext Generation Air Traffic Managementsystem are two examples)

• Economic measures: consistency in addressing and assessing noise and emissions within the industry,incentives supportive of environmentalsustainability.

Progress related to environmental concerns is best achieved through the replacement ofolder aircraft with new, efficient aircraft fleets, infrastructure, operational improvements aswell as appropriate economic levers. The progression of environmental awareness and regulations will have a positive effect on demand for new, efficient aircraft.

Airlines and the Environment (continued)


Key stakeholders, including Bombardier, are committed to

moving toward carbon-neutral growthwithin the aviation industry.


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