The impact of  economic stimulus on  China’s airline industry Gary Crichlow Aviation Analyst, ASCEND 7 TH  ANNUAL CHINA AI...
ASCEND: INFORMATION & CONSULTANCY SERVICES  DATA ANALYSIS MODELLING ADVISORY MARKET INSIGHT
REGULATORY OEM FINANCE INSURANCE LEASING MRO COMPONENTS OPERATORS
OUTLINE <ul><li>GLOBAL MACRO-ECONOMIC PICTURE </li></ul><ul><ul><li>Demand drivers & industry trends </li></ul></ul><ul><l...
IATA GLOBAL TRAFFIC & REVENUE TRENDS Source: IATA, IMF
PREMIUM TRAFFIC TRENDS Source: IATA
REGIONAL COMPARISONS — GDP TRENDS Source: International Monetary Fund World Economic Outlook, April 2009
REGIONAL COMPARISONS — TRAFFIC TRENDS Source: Airline trade association websites, Ascend analysis
REGIONAL COMPARISONS — 1Q09 AIRLINE RESULTS
REGIONAL COMPARISONS — PLANNED CAPACITY From IAE June 2009 Appraisers’ Event, Paris Source: OAG
REGIONAL COMPARISONS — GDP FORECASTS  Source: International Monetary Fund World Economic Outlook, April 2009
CHINESE ECONOMIC GROWTH … <ul><li>IMF (April 2009):  </li></ul><ul><ul><li>China 2009 GDP: 6.5% growth  </li></ul></ul><ul...
…  AND ITS IMPLICATIONS FOR TRAVEL DEMAND Source: CAAC, CAPA analysis 2009 comparisons will be difficult  due to 2008 Olym...
CHINESE AVIATION MARKET — SIGNS OF RECOVERY From IAE June 2009 Appraisers’ Event, Paris Domestic market growth; internatio...
CHINESE AVIATION MARKET — LOOKING AHEAD <ul><ul><li>Huge growth potential BUT … </li></ul></ul><ul><ul><li>…  years of hig...
FUNDING REQUIREMENTS 700+ aircraft due, $35bn+ (2009$) Source: Ascend Online Fleets & Values (V1) $4bn $9bn $9bn $7bn $4bn...
SUMMARY <ul><li>Air transport demand primarily driven by economic health </li></ul><ul><ul><li>Global GDP, international t...
THANK YOU! www. ascend worldwide.com  |  ascend .aviation2020.net  |  twitter .com/AscendAviation  |  linkedin .com: “Asce...
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Ascend @ 7th Annual China AirFinance Conference, 2009

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&quot;The impact of economic stimulus on China’s airline industry&quot;
Gary Crichlow, Aviation Analyst
25 June 2009

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Ascend @ 7th Annual China AirFinance Conference, 2009

  1. 1. The impact of economic stimulus on China’s airline industry Gary Crichlow Aviation Analyst, ASCEND 7 TH ANNUAL CHINA AIRFINANCE CONFERENCE June 2009 Beijing, China “ The information contained in our databases and used in this presentation has been assembled from many sources, and whilst reasonable care has been taken to ensure accuracy, the information is supplied on the understanding that no legal liability whatsoever shall attach to Ascend Worldwide Limited, its offices, or employees in respect of any error or omission that may have occurred.” AEROSPACE INFORMATION REDEFINED
  2. 2. ASCEND: INFORMATION & CONSULTANCY SERVICES DATA ANALYSIS MODELLING ADVISORY MARKET INSIGHT
  3. 3. REGULATORY OEM FINANCE INSURANCE LEASING MRO COMPONENTS OPERATORS
  4. 4. OUTLINE <ul><li>GLOBAL MACRO-ECONOMIC PICTURE </li></ul><ul><ul><li>Demand drivers & industry trends </li></ul></ul><ul><li>REGIONAL COMPARISONS </li></ul><ul><li>CHINESE AVIATION MARKET OUTLOOK </li></ul>
  5. 5. IATA GLOBAL TRAFFIC & REVENUE TRENDS Source: IATA, IMF
  6. 6. PREMIUM TRAFFIC TRENDS Source: IATA
  7. 7. REGIONAL COMPARISONS — GDP TRENDS Source: International Monetary Fund World Economic Outlook, April 2009
  8. 8. REGIONAL COMPARISONS — TRAFFIC TRENDS Source: Airline trade association websites, Ascend analysis
  9. 9. REGIONAL COMPARISONS — 1Q09 AIRLINE RESULTS
  10. 10. REGIONAL COMPARISONS — PLANNED CAPACITY From IAE June 2009 Appraisers’ Event, Paris Source: OAG
  11. 11. REGIONAL COMPARISONS — GDP FORECASTS Source: International Monetary Fund World Economic Outlook, April 2009
  12. 12. CHINESE ECONOMIC GROWTH … <ul><li>IMF (April 2009): </li></ul><ul><ul><li>China 2009 GDP: 6.5% growth </li></ul></ul><ul><ul><li>World 2009 GDP: 1.3% decline </li></ul></ul><ul><li>World Bank (June 2009): </li></ul><ul><ul><li>China 2009 GDP: 7.2% growth (revised upward from March 2009 forecast of 6.5%) </li></ul></ul><ul><ul><li>World 2009 GDP forecast: 2.9% decline </li></ul></ul>
  13. 13. … AND ITS IMPLICATIONS FOR TRAVEL DEMAND Source: CAAC, CAPA analysis 2009 comparisons will be difficult due to 2008 Olympics & natural disasters
  14. 14. CHINESE AVIATION MARKET — SIGNS OF RECOVERY From IAE June 2009 Appraisers’ Event, Paris Domestic market growth; international travel still sluggish
  15. 15. CHINESE AVIATION MARKET — LOOKING AHEAD <ul><ul><li>Huge growth potential BUT … </li></ul></ul><ul><ul><li>… years of high growth may have masked structural inefficiencies </li></ul></ul><ul><ul><li>Chinese economic stimulus helping BUT … </li></ul></ul><ul><ul><li>… long-term strategies will need to be addressed </li></ul></ul><ul><ul><li>Domestic market better-performing BUT … </li></ul></ul><ul><ul><li>… needs restructure </li></ul></ul><ul><ul><ul><li>China Eastern / Shanghai Airlines merger? </li></ul></ul></ul><ul><ul><li>Mainland Chinese carriers — fragile balance sheets </li></ul></ul>
  16. 16. FUNDING REQUIREMENTS 700+ aircraft due, $35bn+ (2009$) Source: Ascend Online Fleets & Values (V1) $4bn $9bn $9bn $7bn $4bn $1bn $0.7bn
  17. 17. SUMMARY <ul><li>Air transport demand primarily driven by economic health </li></ul><ul><ul><li>Global GDP, international trade  international travel, freight </li></ul></ul><ul><li>Global financial system recovery is the key </li></ul><ul><li>Chinese domestic market seems to be recovering </li></ul><ul><ul><li>Domestic GDP slowed but still positive, economic stimulus & support, market restructuring </li></ul></ul><ul><li>There is a way to go yet </li></ul>
  18. 18. THANK YOU! www. ascend worldwide.com | ascend .aviation2020.net | twitter .com/AscendAviation | linkedin .com: “Ascend Aviation Group” The information contained in our databases and used in this presentation has been assembled from many sources, and whilst the utmost care has been taken to ensure accuracy, the information is supplied on the understanding that no legal liability whatsoever shall attach to Ascend, its subsidiaries, officers, or employees with respect to any error or omission that may have occurred. For further information please visit www. ascend worldwide.com   Hong Kong +852 2813 6366 [email_address] New York +1 212 551 1118 [email_address] London +44 20 8564 6700 [email_address]

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