Global Air Freight Forecast Presented To: June 21, 2006 ITDU Spring 2006 Conference
<ul><li>Introduction to BACK Aviation Solutions </li></ul><ul><li>Methodology and Data Source Review </li></ul><ul><li>BAC...
BACK Aviation Solutions: Corporate Overview BACK Aviation Solutions (BACK) is a Commonwealth Business Media (CBM) company ...
BACK Aviation Solutions: Aviation Industry Focus BACK is a consulting and information services business unit within CBM sp...
Methodology and Data Sources
BACK has developed a rigorous methodology to forecast global air freight volumes and future freighter fleet requirements R...
<ul><li>Traffic Forecast </li></ul><ul><li>Historical and Current Traffic (FTKs) </li></ul><ul><ul><li>U.S. Census Bureau ...
Air Freight Forecast
Global Air Freight Traffic is expected to nearly quadruple over the next 20 years  6.8% Bi-Directional CAGR Source: BACK A...
Transpacific trade will drive future air freight growth  Japan and Emerging markets make non-China outlook bright 5.2% Bi-...
However, China is expected to be the key driver of global air freight traffic  Trade between China and the North America i...
Key Drivers Overview
<ul><li>Key Drivers of Air Freight Growth </li></ul><ul><ul><li>Gross-Domestic Product Country Outlook </li></ul></ul><ul>...
There is a positive correlation between GDP and air freight growth Source: BACK Aviation Solutions Analysis
Forecasted GDP shows why China expected to be so important to global air freight volume growth Yet, several Emerging Marke...
FDI is a leading indicator of manufacturing capacity development, a precursor to air freight growth   Source: UNCTAD 13.4%...
Worldwide Aircraft Fleet
Worldwide fleet: Expected to grow at a 4.4% CAGR through 2016 Regional Jet and Widebody aircraft fastest growing segments ...
Worldwide fleet:  Emerging markets drive demand for capacity China, Russia, India, Asia, and Africa expected to grow rapid...
Freighters:  Expected to grow 3.6% CAGR through 2016  Widebody aircraft will be required to satisfy long-haul capacity req...
New Freighter Aircraft Program Overview
<ul><ul><li>A380-800F: Replaces the Boeing 747-400 as the largest aircraft ever manufactured </li></ul></ul><ul><ul><li>74...
The A380 provides improved range capability at higher payloads Unlike the 747, it can operate full payload U.S. to Asia wi...
The A380 can carry more cargo, longer distances versus the 747F     A380F payload  / range / density flexibility matches a...
However, Boeing is well established in the freighter market Boeing offers market a deeper and broader product line than Ai...
Furthermore, Boeing has a well-established carrier customer base in Asia   Air China ANA Asiana Cathay Pacific China Airli...
Lastly, the 747-8F is a natural 747-400F replacement given its improved technology and fuel efficiency Increased Payload +...
Based on confirm orders, Boeing has established an early lead Boeing offers market a better product line than Airbus <ul><...
Contact information <ul><li>Marty Graham </li></ul><ul><li>Manager, Analytical Services </li></ul><ul><li>Commonwealth Bus...
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Global Air Freight forecastはこちらをクリック

  1. 1. Global Air Freight Forecast Presented To: June 21, 2006 ITDU Spring 2006 Conference
  2. 2. <ul><li>Introduction to BACK Aviation Solutions </li></ul><ul><li>Methodology and Data Source Review </li></ul><ul><li>BACK’s 2006 Air Freight Forecast </li></ul><ul><li>Key Drivers Overview </li></ul><ul><li>Freighter Fleet Forecast </li></ul><ul><li>New Freighter Aircraft Programs Overview </li></ul>Agenda
  3. 3. BACK Aviation Solutions: Corporate Overview BACK Aviation Solutions (BACK) is a Commonwealth Business Media (CBM) company <ul><li>CBM is the premier international trade and transportation information services company </li></ul><ul><ul><li>CBM information products include directories, databases, magazines and analytical services in the transportation, international trade, and commercial credit markets </li></ul></ul><ul><ul><li>CBM is headquartered in East Windsor, New Jersey with offices in Newark, San Francisco, New Haven, Long Beach, Atlanta, Montreal, Washington, DC, Miami, Ft. Lauderdale, Tampa, Hong Kong, and London </li></ul></ul>
  4. 4. BACK Aviation Solutions: Aviation Industry Focus BACK is a consulting and information services business unit within CBM specializing in aviation and air transportation <ul><li>Maintains the largest and most prestigious collection of aviation databases in the world </li></ul><ul><li>The product line includes a complete range of aviation information services including: </li></ul><ul><ul><li>Financial </li></ul></ul><ul><ul><li>Traffic </li></ul></ul><ul><ul><li>Schedule </li></ul></ul><ul><ul><li>Fleet </li></ul></ul>Information and analytical services <ul><li>Capabilities </li></ul><ul><ul><li>Strategy </li></ul></ul><ul><ul><li>Operations </li></ul></ul><ul><ul><li>Restructuring </li></ul></ul><ul><ul><li>Process re-engineering </li></ul></ul><ul><ul><li>Forecasting & Modeling </li></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><li>Organization </li></ul></ul>Management consulting services <ul><li>Appraisals for aircraft, engines, components, equipment, real estate & lease holds, slots and route authorities, and other aviation assets </li></ul><ul><li>Aircraft comparative analysis and selection </li></ul><ul><li>Aircraft acquisition, sales and leasing </li></ul><ul><li>Aircraft technical services - inspections and fleet monitoring </li></ul><ul><li>Maintenance repair and overhaul management </li></ul><ul><li>Aircraft portfolio administration </li></ul><ul><li>Aircraft values website & publication </li></ul>Asset management & appraisal services <ul><li>CRM outsource services including: </li></ul><ul><ul><li>Call center data collection </li></ul></ul><ul><ul><li>Data verifications, confirmation and validation programs </li></ul></ul><ul><ul><li>Targeting telemarketing and e-marketing programs </li></ul></ul><ul><ul><li>Customer relationship management campaigns and promotions </li></ul></ul>CRM & research services
  5. 5. Methodology and Data Sources
  6. 6. BACK has developed a rigorous methodology to forecast global air freight volumes and future freighter fleet requirements Range/Payload/Productivity Assumptions Retirement Analysis Demand forecast by Region and Aircraft Category Regional analysis of aircraft Operated by size category Passenger Capacity Growth Forecast Air Freight Forecast by World Region Trade Forecast by World Region Unconstrained Demand By World Region 1) Econometric modeling is used to forecast global air freight demand 3) Allocation of expected demand by freight volume capacity and distance flown is derived through a thorough analysis of operated schedule data 4) Required airframe growth by volume capacity (for freighters) is calculated using utilization and aircraft capacity assumptions as well as accounting for fleet additions to replace retiring aircraft GDP and Economic Indicator Forecast 2) Passenger aircraft cargo capacity is assumed to be utilized first before freighter capacity is required Historical share of air freight captured by passenger aircraft Passenger Belly Accommodated Freight Demand minus equals Freight Demand For Freighter Capacity Global freighter network Schedule analysis Freight Demand Assignment by Aircraft Type Fleet Analysis Required Freighter Aircraft By Size Category
  7. 7. <ul><li>Traffic Forecast </li></ul><ul><li>Historical and Current Traffic (FTKs) </li></ul><ul><ul><li>U.S. Census Bureau and U.S. Customs </li></ul></ul><ul><ul><li>European Union Trade Statistics </li></ul></ul><ul><ul><li>Japan Commerce Statistics </li></ul></ul><ul><ul><li>China Trade Statistics </li></ul></ul><ul><ul><li>United Nations Trade Statistics </li></ul></ul><ul><ul><li>IATA </li></ul></ul><ul><ul><li>T-100 </li></ul></ul><ul><ul><li>BACK Schedules iNet </li></ul></ul><ul><ul><li>ICAO </li></ul></ul><ul><li>Growth Outlook by Trade Lane </li></ul><ul><ul><li>GDP forecasts by Country </li></ul></ul><ul><ul><li>Exchange Rate Outlooks </li></ul></ul><ul><ul><li>High-Tech Commodities Production Forecasts </li></ul></ul>BACK relies on several sources of data to arrive at its forecast <ul><li>Freighter Fleet Forecast </li></ul><ul><li>BACK Fleet iNet Fleet Database </li></ul><ul><ul><li>Used to analyze historical retirements by Aircraft Type </li></ul></ul><ul><ul><li>Worldwide Fleet by Aircraft Type and world region </li></ul></ul><ul><li>BACK Schedules iNet </li></ul><ul><ul><li>Worldwide Schedules by Carrier and Type </li></ul></ul><ul><ul><li>Used to analyze aircraft utilized by distance flown per segment by world region </li></ul></ul><ul><li>Form 41 </li></ul><ul><ul><li>Utilized to analyze aircraft utilization assumptions by aircraft type </li></ul></ul>
  8. 8. Air Freight Forecast
  9. 9. Global Air Freight Traffic is expected to nearly quadruple over the next 20 years 6.8% Bi-Directional CAGR Source: BACK Aviation Solutions Fleet Forecast
  10. 10. Transpacific trade will drive future air freight growth Japan and Emerging markets make non-China outlook bright 5.2% Bi-Directional CAGR Source: BACK Aviation Solutions Fleet Forecast
  11. 11. However, China is expected to be the key driver of global air freight traffic Trade between China and the North America is vital for growth 10.4% Bi-Directional CAGR Source: BACK Aviation Solutions Fleet Forecast
  12. 12. Key Drivers Overview
  13. 13. <ul><li>Key Drivers of Air Freight Growth </li></ul><ul><ul><li>Gross-Domestic Product Country Outlook </li></ul></ul><ul><ul><li>Hi-Tech Manufacturing Capabilities and Outlook </li></ul></ul><ul><ul><li>Inward Foreign Direct Investment </li></ul></ul><ul><ul><li>Monetary Policy </li></ul></ul><ul><ul><li>Governmental Policy and Regulatory Environment </li></ul></ul><ul><ul><li>Domestic Consumption – The ability of domestic consumers to afford imported goods </li></ul></ul>When forecasting traffic growth, BACK accounts for economic, political, and industry factors that impact Air Freight Traffic Worldwide Air Freight Traffic Growth Outlook
  14. 14. There is a positive correlation between GDP and air freight growth Source: BACK Aviation Solutions Analysis
  15. 15. Forecasted GDP shows why China expected to be so important to global air freight volume growth Yet, several Emerging Markets show potential on a smaller scale Source: UNCTAD
  16. 16. FDI is a leading indicator of manufacturing capacity development, a precursor to air freight growth Source: UNCTAD 13.4% 5.3% 1.6% 2.5% 9.0% CAGR <ul><li>The explosion in Chinese air freight exports was positively influenced by the large inflow of foreign direct investment into China as foreign companies started establishing Chinese manufacturing capabilities </li></ul><ul><li>Foreign Direct Investment (FDI) is a good variable to utilize when analyzing what Emerging markets may be posed for growth in air freight traffic </li></ul>
  17. 17. Worldwide Aircraft Fleet
  18. 18. Worldwide fleet: Expected to grow at a 4.4% CAGR through 2016 Regional Jet and Widebody aircraft fastest growing segments Source: BACK Aviation Solutions Fleet Forecast <ul><li>Regional Jet aircraft are expected to experience fastest growth over the next 10 years as airlines take advantage of unit cost benefits of RJ equipment </li></ul><ul><li>Demand for Widebody aircraft is forecasted to be strong as capacity is required for the growing long-haul market segment </li></ul><ul><li>Freighters, mostly large widebody aircraft, will have positive growth over the next decade as global air freight volumes continue to expand driven by Chinese air freight volumes </li></ul>CAGR: 3.6% 5.3% 4.9% 4.2%
  19. 19. Worldwide fleet: Emerging markets drive demand for capacity China, Russia, India, Asia, and Africa expected to grow rapidly Source: BACK Aviation Solutions Fleet Forecast 3.1% 3.7% 4.6% 8.7% 6.2% 5.7% 5.9% 6.0% 6.4% 7.4% CAGR <ul><li>China’s aviation industry is expected to grow rapidly over next ten years as continued development of Open Skies Agreements and the domestic Chinese market fuel growth </li></ul><ul><li>Other Emerging markets will demand additional capacity as traffic expands as economic regions such as Russia and India develop </li></ul><ul><li>The two largest regions, North America and W. Europe, will experience growth, albeit at a slower pace </li></ul>
  20. 20. Freighters: Expected to grow 3.6% CAGR through 2016 Widebody aircraft will be required to satisfy long-haul capacity requirement Source: BACK Aviation Solutions Fleet Forecast <ul><li>Approximately 70% of all freighter additions will be passenger conversion aircraft </li></ul><ul><li>Large Widebody additions are expected to be converted 747-400 aircraft as well as new A380 and 747-8F </li></ul><ul><li>Medium Widebody freighter additions will likely be converted MD-11, 767, and A330 aircraft </li></ul><ul><li>Converted 737 and A320 aircraft will help fill the capacity requirement of the slower growing small narrowbody sector </li></ul><ul><li>Asian, particularly Japan and China, air freight trade with North America and W. Europe drive capacity needs </li></ul>3.7% CAGR 4.5% 4.8% 1.9%
  21. 21. New Freighter Aircraft Program Overview
  22. 22. <ul><ul><li>A380-800F: Replaces the Boeing 747-400 as the largest aircraft ever manufactured </li></ul></ul><ul><ul><li>747-8F:The next generation replacement for the 747-400 </li></ul></ul><ul><ul><li>747-400BCF: Recently announced 747-400 passenger-to-freighter conversion program </li></ul></ul><ul><ul><li>777F: Boeing recently announced 777 factory freighter program aimed at being a replacement aircraft for aging DC-10 and MD-11 freighter aircraft </li></ul></ul><ul><ul><li>767-300BCF: Recently announced passenger-to-freighter conversion program </li></ul></ul>Boeing and Airbus have several new freighter aircraft programs that will be delivered to meet the freighter capacity requirement
  23. 23. The A380 provides improved range capability at higher payloads Unlike the 747, it can operate full payload U.S. to Asia without fuel stops Range ex PVG JAR reserves, 200 nm diversion 5% contingency 3% airways allowance 85% annual probability winds ISA Source: Airbus A380-800F: 5600 NM @ 150 t 3000 nm @ 158 t 156 tonnes 153 tonnes 150 tonnes
  24. 24. The A380 can carry more cargo, longer distances versus the 747F A380F payload / range / density flexibility matches all requirements Range ex PVG JAR reserves, 200 nm diversion 5% contingency 3% airways allowance 85% annual probability winds ISA A380F – 17 / 29 A380F – 25 / 29 747-400F 747-8F JAR 5% typical International profile ISA temperature 200nm diversion Long range cruise PVG – LAX / NRT – ORD 85% annual ESAD ca. 5300 nm 747-400 SF Source: Airbus
  25. 25. However, Boeing is well established in the freighter market Boeing offers market a deeper and broader product line than Airbus Range ex PVG JAR reserves, 200 nm diversion 5% contingency 3% airways allowance 85% annual probability winds ISA Over 90% of all freighter cargo flies on Boeing aircraft Source: Boeing Boeing Airbus Revenue Payload Tonnes 0 50 150 ~90 tonne product line gap 100 747-8F 747-400F/-ERF 767-300F A300-600F A380F 737-700C/QC 777 Freighter A300SF A310SF 767-200SF 757-200SF 747-400BCF 767-300BCF MD-11SF 16% increase
  26. 26. Furthermore, Boeing has a well-established carrier customer base in Asia Air China ANA Asiana Cathay Pacific China Airlines China (Eastern) Cargo China Southern Dragonair EVA Air Jade Cargo Japan Korean MAS Nippon Cargo Shanghai Singapore Transmile (Mar 06, “Cargo Facts”) Current 2 6 6 14 18 6 13 3 12 3 2 4 20 16 3 3 1 8 6 1 11 5 (BCFs) 3 5 (SFs) Firm Orders 1 +5 BCFs 4 2 1 + 2 SFs + 8 -8Fs + 3 BCFs (SFs) 2 8 6 (BCFs) (BCFs) (BCFs) 1 4 Source: Boeing
  27. 27. Lastly, the 747-8F is a natural 747-400F replacement given its improved technology and fuel efficiency Increased Payload + 4 main deck pallets + 3 lower deck pallets 960,000 lb MTOW 700,000 lb MZFW 740,000 lb MLW EIS ~ 2009 Application of new stronger advanced aluminum <ul><li>Systems revised to accommodate new engine, improved wing and body stretch </li></ul><ul><li>New ram air turbine </li></ul><ul><li>Landing gear </li></ul><ul><li>Revised truck beam length </li></ul><ul><li>Strengthened main gear struts </li></ul><ul><li>52” wheels and tires </li></ul><ul><li>Strengthened nose gear </li></ul>160-in forward stretch 60-in aft stretch Repositioned aft cargo door <ul><li>Improved flight deck </li></ul><ul><ul><li>ATC Datalink </li></ul></ul><ul><ul><li>Electronic checklist </li></ul></ul><ul><ul><li>Integrated Approach Nav </li></ul></ul><ul><ul><li>GLS Autoland </li></ul></ul><ul><ul><li>Nav Performance Scales </li></ul></ul><ul><ul><li>New FMC </li></ul></ul><ul><li>Improved wing </li></ul><ul><ul><li>Raked wing tip </li></ul></ul><ul><ul><li>Outboard wing modifications </li></ul></ul><ul><ul><li>New double slotted inboard & outboard flaps </li></ul></ul><ul><ul><li>New flap mechanism and fairings </li></ul></ul><ul><li>Optimized 7E7 engines </li></ul><ul><li>Engines derated to 66.5K lb </li></ul><ul><li>Modified fan diameter </li></ul><ul><li>Modified to provide bleed air </li></ul>Source: Boeing
  28. 28. Based on confirm orders, Boeing has established an early lead Boeing offers market a better product line than Airbus <ul><li>A380F has 45 firm orders versus only 24 orders for 747-8F </li></ul><ul><li>However, Airbus has only 3 customers (UPS, FedEx, and ILFC) for A380 and recently lost Emirates A380F option </li></ul><ul><li>Boeing has found strong interest in the 747-400BCF and 747-8F product since introduction </li></ul><ul><li>Boeing expects 777F to be a home-run given that doesn’t have a really competing product currently in its’ portfolio </li></ul><ul><li>767-200F expected to compete with A330 and A310 for orders </li></ul>Note: Includes only manufactured freighters, does not include conversion freighters on-order or option Source: BACK Fleet iNet
  29. 29. Contact information <ul><li>Marty Graham </li></ul><ul><li>Manager, Analytical Services </li></ul><ul><li>Commonwealth Business Media </li></ul><ul><li>BACK Aviation Solutions </li></ul><ul><li>1270 National Press Building </li></ul><ul><li>Washington, DC 20045 </li></ul><ul><li>202 355 1166 </li></ul><ul><li>Email:Mgraham@BackAviation.com </li></ul>

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