• Intra-regional route development gives region huge potential for growth

November 14, 2013– According to Airbus’ latest Global Market Forecast (GMF), Latin American airlines will require 2,307 new aircraft between 2013 and 2032, including 1,794 single-aisle, 475 twin-aisle and 38 very large aircraft (VLA) worth an estimated US$292 billion. Globally, by 2032 some 29,230 new passenger and freighter aircraft valued at nearly US$4.4 trillion will be required to satisfy future robust market demand.

With GDP currently growing above the world average (3.6 percent per year over the last two years, versus 2.6 percent for the world) socio-economic indicators forecast that Latin America’s middle class will grow to represent more than half of the population by 2032. Between 2012 and 2020, Latin America’s economy is expected to outperform the world average, largely thanks to Mexico and Brazil’s consumer spending. As a result, traffic growth in Latin America in the next 20 years is expected to outperform the world average of 4.7 percent with an annual growth rate of 5.2 percent.

A growing middle class and increased consumer spending have led to air transport becoming more accessible throughout Latin America in the past 10 years, increasing 14 percent in terms of total number of cities served. Still, while almost 100 percent of the 20 largest cities in North America and Europe connect passengers with at least one flight per day, only 40 percent of Latin America’s top 20 cities do the same. As a result, in the next 20 years, intra-regional and domestic traffic is expected to grow at an impressive rate of 6.3 percent, becoming the biggest market for Latin American carriers.

This untapped intra-regional potential partly explains why Airbus forecasts that in the next 20 years two-thirds of the population in emerging markets will take a trip a year, positioning Latin American airlines to enjoy the second highest traffic growth rates worldwide, after Middle Eastern airlines.

While 10 of the 92 worldwide aviation mega-cities with over 10,000 international passengers a day will be in Latin America by 2032, additional opportunities exist for Latin American airlines to capitalize on. Currently, Latin America’s six largest carriers have 19 percent market share of the region’s long-haul traffic, while regions like North America and Europe enjoy nearly 40 percent.

“Very large aircraft, such as the A380, not only help alleviate traffic congestion at busy airports, but they can assist Latin American airlines to compete with their foreign competitors,” said Rafael Alonso, Executive Vice President of Airbus for Latin America and the Caribbean. “At the same time the A380 addresses international air traffic requirements needed to serve long-haul flights to Europe.”

Another prevalent trend in Latin America is the rise of low cost carriers (LCC), which accounts for nearly 40 percent of the market share of total air traffic in the region, up from just 12 percent in 2003, with Mexico and Brazil representing nearly the entire market. A highly competitive LCC market has led airlines to constantly seek the most efficient aircraft available, largely driving the average age of Latin America’s in-service fleet to 9.5 years, down 42 percent since 2000, as compared to the world average age of 10.7 years.

While many Latin American airlines have gone through great efforts to maintain a young and highly-efficient fleet, the average aircraft age in Latin America could decrease further when Caribbean carriers start their renewal process.

“Aircraft in the Caribbean average about 17 years of age – – that’s more than seven years older than the Latin America and world average,” said Alonso. “We’ve already started seeing some airlines in the Caribbean take advantage of current market opportunities and achieve greater operational benefits associated to newer generation aircraft. As more follow, the average aircraft age in the region will continue to drop.”

With more than 800 aircraft sold and a backlog of almost 400, over 500 Airbus aircraft are in operation throughout Latin America and the Caribbean. In the last 10 years, Airbus has tripled its in-service fleet, while delivering more than 60 percent of all aircraft operating in the region.

Ongoing Trend For Larger Eco-Efficient Aircraft

September 19, 2011 — In the midst of troubled financial markets, Airbus foresees strong ongoing demand for commercial aircraft. According to its latest Global Market Forecast (GMF), by 2030 some 27,800 new aircraft will be required to satisfy future robust market demand. The combined value of the over 26,900 passenger aircraft (above 100 seats) and more than 900 new factory built freighters forecast by the GMF is US$3.5 trillion.

As a result, by 2030 the global passenger fleet will more than double from today’s 15,000 aircraft to 31,500. This will include some 27,800 new aircraft deliveries of which 10,500 will be needed for replacing older less fuel efficient aircraft. The trend towards larger aircraft will continue, in order for the aviation sector to keep pace with future growth in demand.

People need and want to fly more than ever before. Over the next 20 years the aviation sector is expected to remain resilient to cyclical economic conditions as in the past. Airbus forecasts that Revenue Passenger Kilometres (RPKs) will grow by an average 4.8 per cent per year, which is equivalent to traffic more than doubling in the next 20 years.

Factors driving demand for new aircraft include population growth with increasing wealth, dynamic growth in emerging economies, strong continued growth in North America and European markets, greater urbanization and a more than doubling in the number of mega cities by 2030. Drivers also include the ongoing expansion of low cost carriers, and the need to replace older less efficient aircraft with new eco-efficient models in established markets.

Geographically, over the next 20 years, Asia-Pacific will account for approximately 34 percent of demand, followed by Europe (22 per cent) and North America (22 per cent). By share of passenger traffic, Asia-Pacific will be the biggest market with 33 percent, followed by Europe (23 per cent) and North America (20 per cent).

In terms of passenger traffic on domestic markets, India (9.8 per cent) and China (7.2 per cent) will have the fastest growth rates over the next 20 years. Long established aviation markets will also continue to grow with the Domestic US (11.1 per cent) and Intra Western Europe (7.5 per cent) having the first and third largest shares of the total traffic in 2030.

“The aviation sector is an essential element for today’s global economy which is why more people than ever need and want to fly,” says John Leahy, Airbus Chief Operating Officer Customers. “Airbus is bringing to market the latest innovations and eco-efficient products to satisfy the needs of airlines and the expectations of passengers now and in the years to come.”

By 2030, 60 per cent of the world’s population or some five billion people will be urbanised and the number of mega cities will have more than doubled to 87 from today’s 39. It is also forecast that over 90 per cent of long haul travellers will fly between these mega city points.

Demand for Very Large Aircraft (VLA) seating more than 400 passengers, like the A380, has risen over 2010 forecasts (1,738) to 1,781 aircraft valued at US$600 billion. This represents a 17 per cent share by value or six per cent share by aircraft units. Of these, nearly 1,330 are passenger aircraft needed to cater for the concentrated traffic volumes linking the world’s mega cities. Regionally, some 45 per cent of the world’s VLA’s will be delivered to Asia, 19 per cent to Europe and 23 per cent to the Middle East.

In the twin-aisle aircraft segment (seating from 250 to 400 passengers), some 6,900 new passenger and freighter aircraft will be delivered in the next 20 years doubling the fleet of today by 2030. These deliveries are valued at some US$1,500 billion, representing 43 per cent share by value, or 25 per cent share by units. Of these, some 4,800 aircraft will be small twin-aisle (250 to 300 seater) and about 2,100 intermediate twin aisles (350 to 400 seater). These segments are covered by the A330 and the A350 XWB family.

In the single-aisle segment, nearly 19,200 aircraft worth some US$1,400 billion or 40 per cent share by value, 69 per cent share by units, will be delivered in the next 20 years. This is an increase over previous forecasts due to increased growth and acceleration in the replacement of older less efficient aircraft. Of the new deliveries, some 40 per cent will be required to replacement needs. In addition some 50 per cent of single aisle aircraft deliveries will go to the well established aviation markets of North America and European.