Current Market Outlook2012-2031
3Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Outlook on a PageGrowth measuresRegionsWorld ...
4 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Long-Term MarketPurpose of the forecastThe C...
5Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Airlines responding and adaptingBoeing factor...
6 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Continued passenger demand growthWith first-...
7Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Historical fleetBefore looking at today’s fle...
8 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Infrastructure investment remains crucialSus...
9Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Limited competition with commercial aviationO...
10 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Environmental challenges for the airplane m...
11Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Industry growth amid economic uncertaintyBoe...
12 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031MethodologyPractical value for Boeing and t...
13Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Methodology—continuedPhilosophy behind the f...
14 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Forecast IndicatorsNew airline business mod...
15Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Fleet DevelopmentFleet size will doubleThe i...
16 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Single-aisle aircraft remain pivotalOver th...
17Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Resilient demand for air cargoWhile surface ...
18 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031MiddleEastEuropeLatinAmericaAsia PacificCISN...
19Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Growing marketsThe vibrant economies in the ...
20 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-203140 years of working togetherBoeing is celeb...
21Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031World RegionsNortheast AsiaModest economic g...
22 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031World RegionsSouth AsiaRobust traffic growt...
23Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031World RegionsSoutheast AsiaAirlines expand o...
24 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031World RegionsOceaniaA thriving marketWith r...
25Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Growth moderating in third year of improveme...
26 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Strength despite uncertaintyThe European av...
27Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Long-haul, short-haul, and domestic markets ...
28 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Stability fosters economic growthThe Latin ...
29Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Younger, more efficient fleetThe outlook for...
30 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Economic development supports air travel gr...
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Boeing current market_outlook_2012-3031
Upcoming SlideShare
Loading in …5
×

Boeing current market_outlook_2012-3031

2,972 views

Published on

Published in: Technology, Business
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,972
On SlideShare
0
From Embeds
0
Number of Embeds
1,477
Actions
Shares
0
Downloads
0
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Boeing current market_outlook_2012-3031

  1. 1. Current Market Outlook2012-2031
  2. 2. 3Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Outlook on a PageGrowth measuresRegionsWorld economy (GDP) %Airline traffic (RPK) %Cargo traffic (RTK) %Airplane fleet %Market sizeDeliveriesMarket value ($B)Average value ($M)Unit share %Value share %New airplane deliveriesLargeTwin aisleSingle aisleRegional jetsTotalMarket value (2010 $B, catalog prices)LargeTwin aisleSingle aisleRegional jetsTotal2011 fleetLargeTwin aisleSingle aisleRegional jetsTotal2031 fleetLargeTwin aisleSingle aisleRegional jetsTotalWorld3.25.05.23.534,0004,4701301001007907,95023,2402,02034,0002802,0802,030804,4707903,71012,6102,78019,8901,0309,11027,4302,21039,780Africa4.45.65.83.490012013032102705705090027050212010140410110670103308501101,300CIS3.44.75.01.71,14013011033302507001601,14020505010130601706502001,080503109701701,500LatinAmerica4.16.65.95.12,5102601007603402,080902,5100801701026001401,0201101,27004402,8501603,450MiddleEast3.96.45.74.82,3704702007101901,1001,060202,37070310801047070470470601,0701701,1701,320502,710Europe1.94.14.63.27,76097013023222001,4405,8003207,76070370520109701906803,1604104,4402301,6306,1203408,320NorthAmerica2.62.84.51.47,2908201102218401,3205,0408907,29010340440308201201,0303,7301,7706,6501101,7406,0908908,830AsiaPacific4.66.45.95.512,0301,70014035383203,2307,99049012,030110860720101,7003401,0803,1701204,7104603,4909,23049013,670Market values above 5 have been rounded to the nearest 10.World regionsKey indicators and new airplane marketsWorld regionsMarket growth ratesWorld regionsMarket value: $4,470 billionDelivery units6%2%24%68%2012 to 2031New airplanes34,000100%0%75%50%25%Share of fleet2031Airplanes39,7802011Airplanes19,890•747 and larger •Twin aisle •Single aisle •Regional jets2011 to 2031Number of airlinepassengersAirline traffic(RPK)Cargo traffic(RTK)World economy(GDP)5.2%5.0%4.0%3.2%
  3. 3. 4 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Long-Term MarketPurpose of the forecastThe Current Market Outlook is our long-term forecast of air trafficvolumes and airplane demand. The forecast has several importantpractical applications. It helps shape our product strategy andprovides guidance for our long-term business planning. We haveshared the forecast with the public since 1964 to help airlines,suppliers, and the financial community make informed decisions.Each year we start new, so we can factor the effects of currentbusiness conditions and developments into our analysis of thelong-term drivers of air travel. The forecast details demand forpassenger and freighter airplanes, both for fleet growth and forreplacement of airplanes that retire during the forecast period. Wealso project the demand for conversion of passenger airplanes tofreighters.Air travel continues to be resilientThe remarkable resilience of air travel is amply documented innearly 50 years of published editions of the Boeing Current MarketOutlook.Commercial aviation has weathered many downturns in thepast. Yet recovery has followed quickly as the industry reliablyreturned to its long-term growth rate of approximately 5 percentper year. Despite uncertainties, 2011 passenger traffic rose 6percent above 2010 levels. We expect this trend to continue overthe next 20 years, with world passenger traffic growing 5 percentannually. Air cargo traffic has been moderating after a high periodin 2010. Air cargo contracted by 2.4 percent in 2011. Expansion ofemerging-market economies will, however, foster a growing needfor fast, efficient transport of goods. We estimate that air cargowill grow 5.2 percent annually through 2031.The shape of the marketWe forecast a long-term demand for 34,000 new airplanes,valued at $4.5 trillion. These new airplanes will replace older,less efficient airplanes, benefiting airlines and passengers andstimulating growth in emerging markets and innovation in airlinebusiness models. Approximately 23,240 airplanes (68 percent ofnew deliveries) will be single-aisle airplanes, reflecting growth inemerging markets, such as China, and the continued expansionof low-cost carriers throughout the world. The twin-aisle segmentwill also increase, from a 19 percent share of today’s fleet to a23 percent share in 2031. The 7,950 new twin-aisle airplaneswill allow airlines to continue expansion into more internationalmarkets.Airplanes in service2011 and 2031Demand by size2012 to 2031New ValueRegion airplanes ($B)Asia Pacific 12,030 1,700Europe 7,760 970North America 7,290 820Middle East 2,370 470Latin America 2,510 260CIS* 1,140 130Africa 900 120Total 34,000 4,470*Commonwealth of Independent States.Key indicators2011 to 2031Demand by region2012 to 2031GrowthmeasuresWorld economy 3.2%Gross domesticproduct (GDP)Airplane fleet 3.5%Number of 4.0%passengersAirline traffic 5.0%Revenue passenger-kilometers (RPK)Cargo traffic 5.2%Revenue tonne-kilometers (RTK)New ValueSize airplanes ($B)*Large 790 280Twin 7,950 2,080aisleSingle 23,240 2,030aisleRegional 2,020 80jetsTotal 34,000 4,470*$ values throughout the CMO are catalog prices.Size 2011 2031Large 790 1,030Twin 3,710 9,110aisleSingle 12,610 27,430aisleRegional 2,780 2,210jetsTotal 19,890 39,780UPDATED!Randy Tinsethintroducesthe Asia PacificsubregionsCurrent Market Outlook2012–2031
  4. 4. 5Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Airlines responding and adaptingBoeing factors a wide variety of market forces and influences intothe long-term forecast that the company produces each year.At the broadest level, global economic growth is expected toaverage 3.2 percent over the next 20 years, fostering 5.0 percentannual growth in passenger traffic and 5.2 percent annual growthin cargo traffic.In response to market pressures, airlines are deploying capacitymore strategically to help boost yields and cover higher fuelexpenses. Airlines are optimizing airplane utilization more closelyto seasonal demand fluctuations, and passenger load factorsremain near historic highs. The number of new-generationairplanes in the parked fleet remains low, indicating that airlinesare shifting utilization to their most efficient assets. These activitiesare projected to help the global airline industry achieve a profitableyear, despite below-average economic growth and oil prices thatare likely to average in the triple digits for the full year—a scenariothat would have seemed unbelievable just a decade ago.Dynamic industryThe industry continuously adapts to varied market forces,including fuel price, economic growth and development,environmental regulation, infrastructure, market liberalization,airplane capabilities, other modes of transport, business models,and emerging markets. Each of these forces can have bothpositive and negative impacts on the industry. For example,on the negative side, rising fuel prices have become a majorcomponent of airline costs. On the positive side, the rise in fuelprices has prompted manufacturers to produce more fuel-efficientairplanes, such as the 787 and 737 MAX. High fuel costs havealso encouraged airlines to explore cost-cutting opportunities andnew sources of revenue to help offset the effects of fuel prices.Impacts such as these inform our analysis of aviation marketdevelopments.Market DevelopmentsMarket developmentsWorld passenger load factors at historic highs2011 to 2031AfricaLatinAmericaMiddleEastAsiaPacificNorthAmericaEuropeMiddleEastLatinAmericaAfrica6.0%4.8%6.9%6.2%7.4%8.3%Market developmentsAirline traffic growth rates5.1%4.6%–5.4%6.5%6.4%5.1%5.1%7.2%3.8%3.5%5.7%EuropeNorthAmerica2.2%4.8% 6.7%AsiaPacificCMOMarketliberalizationAirplanecapabilities EnvironmentHigh-speedrailFuelpriceEmergingmarketsAirlinestrategies& businessmodelsInfrastructure EconomicgrowthMarket developmentsKey indicatorsSource:ICAOWorld load factors60%65%70%75%80%200020012002200320042005200620072008200920102011
  5. 5. 6 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Continued passenger demand growthWith first-quarter data in hand, 2012 appears to be anotherchallenging year for the airlines. Economic forecasters expect thatthe European debt crisis will tip Europe into recession and reducegrowth in other regions. Global economic growth is projected tolag behind the long-term average into 2013.Despite the sub-par economic outlook, air passenger demandis forecast to grow at close to the long-term average rate of 5percent in 2012. Trends that drove above-average passengergrowth in 2011 have continued into 2012: economic growth andexpanding middle classes in emerging markets; liberalizationand new airline business models that stimulate demand; andcorporate focus on revenue growth, which bolsters demand forbusiness-class travel.Air cargo traffic growth, on the other hand, has loitered below thelong-term average since 2011, weighed down by weak economicgrowth, spiking fuel prices, and supply chain shocks. Historically,air cargo traffic has been a reasonable indicator of currenteconomic health, rather than of future economic performance orglobal passenger trends. Air cargo traffic correlates well with long-haul passenger traffic, while the strong demand for short-haultravel has made overall passenger traffic resilient to the challengesthat have recently faced air cargo.Oil price pressures easingBeyond the weak economic environment, the key externalchallenge for airlines has been volatile oil prices. After spiking inearly 2012 in response to Middle East supply concerns, Brentcrude oil prices dropped below $100 per barrel for the first timesince early 2011 as a result of fluctuations in both demand andsupply outlooks. On the demand side, projections are decliningas economists cut near-term global economic growth forecasts toreflect the impacts of the Eurozone debt crisis. Investor demandfor oil and other commodities is also dropping as investorsmove from commodities to safer assets like US treasury bonds.On the supply side, projections are increasing as OPEC andUS production rises. In the long term, energy forecasters arereassessing supply projections and, in some cases, moderatingfuture price projections, to reflect improving North American oilshale prospects. Lower jet fuel prices will bolster near-term airlineprofitability outlooks, despite the uncertain economic outlook.Market DevelopmentsBusiness EnvironmentBusiness environmentNear-term economic challenges86420• 2010 • 2011 • 2012HighincomecountriesWorldDevelopingcountriesSource:World BankJune 2012 forecastReal GDP growth (%)Business environmentOil and jet fuel prices elevated and volatileSource:EIA18016014012010080604020Spot $/barrel (Brent crude oil / US Gulf Coast jet fuel)•Jet fuel •Brent crude oilAvg. Ann. Price2006 $652005 $552007 $722008 $972009 $622010 $802011 $1112004 20122008Business environmentPassenger traffic resilientSource:ICAO199019911992199319941995199619971998199920002001200220032004200520062007200820092010201115%10%5%0%-5% 12345Annual growth Annual RPKs (trillions)
  6. 6. 7Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Historical fleetBefore looking at today’s fleet, let’s take a step back for somehistorical perspective. Before the deregulation of the US aviationindustry, the world jet fleet in 1977 comprised approximately6,500 airplanes, the majority of them single aisle. Boeing andMcDonnell Douglas provided 65 percent of the fleet, mainly 707sand 727s. There were roughly 290 airlines, with the top ten havingmore than a 50 percent fleet share. The top ten airlines were verysimilar: all large network carriers, the majority located in NorthAmerica, providing both domestic and international service.Today, three of those top ten airlines--Eastern, TWA, and Pan Am--are no longer in service.Current trendsToday there are more than 900 airlines in operation. Boeing isstill the dominant manufacturer, with 50 percent of the in-servicejet fleet. The airlines with the largest fleets are a diverse mix,including low-cost carriers and cargo carriers, as well as airlinesoriginating outside North America.Single-aisle airplanes still comprise an overwhelming majority ofthe fleet, reflecting little change in share percentage, having risento 63 percent of the fleet in 2011, compared to 62 percent in 1977.The number of single-aisle airplanes, however, has grown by 200percent to more than 12,600 airplanes from 4,000 during thesame period. The number of twin-aisle airplanes rose 600 percentto 3,700 from 518. Only the regional jet category reported a largepercentage decline, down 11 percentage points, although thenumber of regional jets has increased by 1,100 since 1977.At year end 2011, at least 30 percent of the installed commercialfleet was based in the United States. The second largest sharebelongs to China, with 9 percent. Russia, the United Kingdom,and Germany, at a combined 12 percent share, split the thirdlargest share about evenly. Commercial airplane backlogs indicatethat the geographical diversity of the order base is growing. TheUnited States and China retain their respective top two positionsas new entrants, including India, the United Arab Emirates,Malaysia, and Indonesia, gain a significant presence. Russia alsohas a sizable backlog of aircraft on order and will remain a largebase for the commercial aviation industry.Market DevelopmentsToday’s FleetToday’s fleetTripled since 1977Source:AscendToday’s fleetIn-service fleet: 19,89050004000300070006000200010000USAChinaRussiaUKGermanyCanadaJapanBrazilFranceAustraliaLargest in-service jet fleet at year-end 2011(Jets over 30 seats)Source:AscendToday’s marketBacklog year-end 2011: 9,23050004000300070006000200010000USAChinaIndiaUAEMalaysiaRussiaAustraliaIndonesiaBrazilIrelandBacklog by country at year‐end 2011(Jets over 30 seats)100%0%75%50%25%Share of fleet2011Airplanes19,8901977Airplanes6,476• 747 and larger• Twin aisle• Single aisle• Regional jets
  7. 7. 8 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Infrastructure investment remains crucialSustained investment in aviation infrastructure is crucial to thecontinuing growth of commercial aviation. Airports, nationalairspace management agencies, and airlines share challengesand opportunities of aviation growth.Boeing analysis indicates that projected commercial air trafficgrowth will increase congestion at certain airports around theworld as demand for takeoffs and landings reaches or surpassesairport capacity over the next 20 years. The world’s busiestairports, such as London’s Heathrow, have already reached theirlimits for hourly airplane movements, even with slot controls.Many airports have capacity to meet projected traffic growth.Other airports have the capacity to handle demand efficientlyduring off-peak hours, but are constrained during morning and/orevening hours when demand is highest. Continued infrastructureinvestment is particularly important in regions, such as China,Northeast and Southeast Asia, India, and Latin America, whereaviation growth outpaces planned infrastructure development.Capital improvementsAirport authorities around the world are investing in largecapital projects, including new or improved runways, terminalexpansions, and entirely new airports. These investments cansignificantly increase airport capacity, but are substantial, anddevelopment times typically extend more than a decade frominitial planning to completion of construction. Community noiseand environmental concerns often stretch development timesfurther and may limit the scope of expansion.Airspace management enhancementsMany national and regional airspace management agencies areengaged in programs to overhaul airspace systems. For example,the United States is implementing the NextGen program tohelp airports run smoother and avoid long takeoff lines on therunway. This type of program is implemented gradually, and theimprovements in airport efficiency will be realized over time.Airlines have implemented a number of approaches to manageairport crowding. In particular, airlines have replaced smallerairplanes such as regional jets with larger single-aisle airplanes,helping to ease demand for takeoff and landing slots duringpeak periods. Creating secondary hubs and expanding serviceto secondary airports also can ease congestion at the busiestairports. Airline alliances have proven effective in allowing airlinesto expand route systems without duplicating services that wouldadd to congestion.In sum, although airports and governmental air services agencieswill need to continue investing in infrastructure improvements, andairlines will need to evolve strategic responses at some airports,congestion will not be a major limiting factor to commercial airtraffic growth during the forecast period.Market DevelopmentsInfrastructureInfrastructure2011 busiest airports by cargoSource:ACIwww.airports.orgInfrastructure2011 busiest airports by passengersSource:ACIwww.airports.orgInfrastructureInfrastructure is crucial to growthInvestment ininfrastructure iskey to growth Total passengers (millions)100806040200Atlanta(ATL)Beijing(PEK)London(LHR)Chicago(ORD)Tokyo(HND)LosAngeles(LAX)Paris(CDG)Dallas(DFW)Frankfurt(FRA)HongKong(HKG)Total cargo tonnes (millions)543210HongKong(HKG)Memphis(MEM)Shanghai(PVG)Incheon(ICN)Anchorage(ANC)Paris(CDG)Frankfurt(FRA)Dubai(DXB)Tokyo(NRT)Louisville(SDF)
  8. 8. 9Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Limited competition with commercial aviationOur long-term forecast considers the impact that othertechnologies, including high-speed rail (HSR), have on air travel.In 2010, worldwide railways carried 45 percent less passengertraffic, but 45 times more cargo traffic than commercial aviation.The total distance covered by railway networks was a mere 2.5percent that of the aviation network. Analysis of the data showsthat (1) railways are well suited for carrying passengers overrelatively short distances (terrain permitting), whereas aviationexcels for longer journeys; (2) railways are an efficient mode foroverland cargo transport; and (3) aviation is very effective forcreating large transportation networks without heavy investmentin infrastructure.It has been almost 50 years since Japan introduced the world’sfirst modern HSR service between Tokyo and Osaka. By the endof 2012, China will be operating 13,000 kilometers of HSR--morethan the rest of the world combined. Yet, HSR still accountsfor less than 2 percent of the world’s railway lines, and onlysix nations have HSR networks with tracks longer than 1,000kilometers.Capital intensive, sizable life-cycle carbon footprintChina’s unprecedented HSR program entailed a 2-trillion-RMBinvestment in a 13,000-kilometer network. In addition to the largecapital investment, the infrastructure construction had significantimpact on the environment. In 2009 alone, China’s HSR programconsumed 20 million tonnes of steel and 120 million tonnes ofconcrete. The carbon emissions associated with just the rawmaterials amounted to approximately 150 million tonnes of CO2--roughly equivalent to a quarter of the annual CO2emissions forall the world’s airlines. Yet, Boeing analysis shows that passengertraffic on the 2012 HSR network would account for less than 2percent of the domestic revenue passenger-kilometers flown byChinese carriers in 2009.Intermodal strategiesHSR could compete with some airlines in high-volume, high-yield markets. Yet, the relatively short routes where HSR excelsrepresent only a small portion of the market served by commercialaviation. Airline assets are highly flexible, because airplanes canbe easily redeployed to more lucrative markets. In addition, theinfrastructure investment for a comprehensive aviation networkis much lower than for ground modes of transport. Aviation’snetwork connectivity simply cannot be replicated by ground-based modes. Opportunities to develop intermodal solutions canpotentially combine the advantages of both HSR and aviation.Market DevelopmentsHigh-Speed Rail2.5%High-speed rail in service(km, 5/2012)0 1 2 3 4 5 6 7ChinaSpainJapanFranceItalyGermanyHigh-speed railTop high-speed rail countriesPassenger traffic (RPK, trillions)AirRail0 2 4 6 8 1055%0 2 4 6 8 10Cargo traffic (RPK, trillions)AirRailTrack/network (km, millions)AirRail0 10 20 30 40 5045xHigh-speed railRail1vs. air2Source:12010 UIC members22010 ICAO/BoeingHigh-speed railChina’s impact on domestic aviationSource:2009 DomesticRPK CAACChina’s HSR Impact on aviationCompetewith HSRDon’t competewith HSRNo HSRimpact< 2% Loss to HSR
  9. 9. 10 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Environmental challenges for the airplane marketFor both economic and environmental reasons, airline customersdemand ever-increasing fuel efficiency. Boeing and the aviationindustry have committed to ambitious CO2emissions targets toachieve carbon-neutral aviation growth beyond 2020 and halvenet carbon emissions by 2050 (compared to 2005). Boeing isplaying a leadership role in leveraging technology and innovationin support of the industry’s strategy by• Improving the performance of current jetliners and introducingnew airplanes, such as the 787 Dreamliner, 747-8, and 737MAX, that are significantly more efficient than the airplanesthey replace.• Enabling greater operational efficiency through improved airlineoperations and advocating for global air traffic managementsystem infrastructure modernization.• Championing the commercialization of sustainable aviationfuels that produce 50 percent or lower life-cycle CO2emissionsthan conventional fuels.Sustainable aviation fuelsSustainable aviation fuel received a significant boost in thepast year when the ASTM international standards organizationapproved the commercial use of fuel blends. Since that approval,conventional jet fuel blends with up to 50 percent biofuel derivedfrom sources such as jatropha, camelina, algae, and otheroils have been used on more than 1,500 commercial flights.Increasing the availability of sustainable aviation fuel is a criticalcomponent of aviation’s strategy to reduce life-cycle emissionsby 50 percent compared to conventional fuels. Meeting airlinefuel demand at price points comparable to those of petroleum-based fuels requires continued investment and government policysupport. Boeing will continue to be a catalyst and advocate inboth arenas.Airport environment and growthThe Current Market Outlook projects a doubling of thecommercial airplane fleet by 2031. This will require manyconstrained airports to increase capacity. In some regions of theworld, particularly Europe, airport communities have expressedconcerns about the environmental effects of increased operationsand airport expansion. Finding the appropriate balance betweengrowth and community concerns takes time and can slow orlimit progress in a region’s capacity planning. The combinationof new, cleaner and quieter airplanes like the 787, and innovativeoperational procedures that take advantage of RequiredNavigational Performance (RNP) and other technologies, holdsthe potential to improve the environment around airports whileenabling airports to sustain regional economic growth.Market DevelopmentsEnvironmentEnvironment747-8 Freighter Biofuel flightEnvironmentTrack record of significant progressEnvironmentThe commercial aviation challenge–carbon neutral growthEarly jet airplanesNew generation jet airplanesNoise footprint based on 85 dBa1950s 1990sRelativefueluseNoisedBHigherLowerMoreLess90% Reduction in noise footprint70% Fuel improvement and CO2efficiencyUsing less fuel• Efficient airplanes• Operational efficiencyChanging the fuel• Lower lifecycle CO2• No infrastructure modifications• “Sustainable biofuel”2050Carbon neutral timeline2006Presented to ICAO GIACC/3 February 2009 by Paul Steele on behalf of ACI, CANSO, IATA and ICCAIACO2EmissionsForecasted emissions growth without reduction measuresBaselineMeeting aviation’senvironmentalchallenge
  10. 10. 11Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Industry growth amid economic uncertaintyBoeing’s business analysis includes extensive study of globalgeopolitical dynamics that influence commercial aviation. Thisresearch focuses on current events as well as long-term trends.The analysis helps to determine risk and opportunity in thecommercial aviation market as a whole, and in specific regionsaround the world.Recent global events, including regional political turmoil, energyprice volatility, and debt crises, have dampened global economicgrowth. Although growth is expected to return, albeit slowly, therisks of persistent high oil prices and debt contagion could havelasting effects. A slowdown of trade liberalization could constraineconomic growth in some regions, prolonging and delaying therecovery, which would adversely affect demand for air travel andnew airplanes.Level playing field and aviation liberalizationGovernment assistance for civil aircraft development remainsa concern. Recent World Trade Organization rulings havemade clear that such government support must be providedon commercial terms. In the area of export finance, the recentreauthorization of the US Export-Import Bank charter helps levelthe playing field for aircraft manufacturers and airlines.Liberalization of aviation services stimulates competition, givingpassengers more choices and generally reducing ticket prices,which in turn increases demand for air travel. Unlike tradeliberalization, air services liberalization has not slowed significantly,despite continued resistance from some governments. Thisresistance stems primarily from concern about allowing increasedlevels of foreign ownership in domestic airlines.Infrastructure, security, and environmentThe Current Market Outlook projects that the global largecommercial airplane fleet will double by the year 2031. Theresultant global air traffic growth will necessitate infrastructureinvestments, as initiatives to modernize air traffic managementprovide crucial enhancements to both system capacity andefficiency.While significant improvements in aviation security have beenmade globally since 9/11, constant vigilance is still required.Security concerns will continue to affect commercial aviationoperations.The aviation industry is addressing environmental challengeswith a three-pronged strategy of designing more efficient andsafer aircraft, improving operational procedures, and developingsustainable biofuels. Moreover, governments around the worldare aligning with the industry’s strategies to reduce emissionsand achieve carbon-neutral growth. This approach will allow theindustry to continue strong growth over the long term, despiteanticipated regulatory constraints.Market DevelopmentsGlobal TrendsGlobal trends20 years in the futureGlobal trendsChina domestic frequencies1991 2011Total weekly 508 11,395ASKs*Weekly 2,165 47,791frequenciesTotal airport 170 1,085pairsAirplane 147 149size (seats)Domestic frequencies22-fold since 1991.2011 *Available seat-kilometers.1991Source:August OAGGlobal trendsLiberalization has stimulated serviceSource:August OAG100%75%50%25%0%85% NewAirplanesBetter for:EnvironmentPassengersAirlines15%RemainingAirplanesWeekly ASM (mil)Morocco-EU Open Skies 200730035010 Year Growth Rate: 11.5%2002505001001502001 2007 2011•Network airlines •Low cost carriers
  11. 11. 12 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031MethodologyPractical value for Boeing and the industryThe long-term forecast contained in Boeing’s Current MarketOutlook guides product strategy and provides the basis forbusiness plan development. We have shared the forecastwith the public since 1964 to help airlines, suppliers, industryorganizations, academia, and financiers make informed businessdecisions and benchmark other forecasts or analyses.Air travel demand is resilientGlobal and regional economic cycles profoundly affect airtravel demand, so it is essential to take the current phase of theeconomic cycle into account in developing the long-term forecast.Historically, declines in economic activity are often associatedwith unexpected events. The resilience of air travel demand toa disruptive event depends on the nature of the event and theextent to which the event affects air travel, directly or indirectly.For example, events related to personal safety, such as pandemic,war, or threats against aircraft, have a greater effect thancommercial or political events. Perturbations from the long-termdemand trend are typically relatively short lived, lasting around 12months. The role air travel plays in the fabric of society is key to itsresilience. Air travel is an essential part of personal and businesslife for many travelers. The Internet, mobile connectivity, and socialmedia are increasingly integrated into daily life, including howwe research, discuss, plan, and book travel. At the same time,improved airplane technology and efficiency are allowing airlinesto make air travel more affordable, so airfares generally representa smaller portion of total trip costs.Development process for air travel demand outlookOur air travel demand forecast is developed by constructingand matching top-down and bottom-up analyses. Bottom-upanalysis involves forecasts of traffic between and within individualcountries, based on economic predictions, growth momentum,historical trends, travel attractiveness, and projections of therelative openness of air services and domestic airline regulation.Additionally, government statistics on inbound and outboundvisitors and tourism receipts are included to identify and cross-check trends. Countries are grouped into geographical regionsthat generate air traffic flows between and within the regions. Inthe top-down approach, global and regional markets are similarlyprojected on aggregated variables. The bottom-up and top-downprojections are then reconciled, allowing for the effects of industryand airline business model developments. Further, positive ornegative region-specific developments, including populationdynamics, shifts toward or away from other modes of transport,and emergence of new air services, are factored in. The resultingregional traffic forecasts are used in developing the airplanedemand forecast.Methodology2012 traffic outlookEXPLORE!The methodologybehind the 2012traffic outlookMethodologyRelative liberalization and trafficEurope – North AmericaIntra-North AmericaIntra-EuropeEurope – AfricaIntra-ChinaIntra-Southeast Asia North America – Northeast AsiaIntra-South AmericaCentral America – North AmericaEurope – Middle EastRelative liberalization index More liberal10001001010 1 2 3 4 5 6Source:ICAOGDP–IMF1971 1976 1981 1986 1991 1996 2001 2006 2011RPK growth Real GDP growth-2-1012345678-4-20246810121416MethodologyWorld passenger traffic growth vs. GDP
  12. 12. 13Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Methodology—continuedPhilosophy behind the forecastGrowth in air travel, measured in revenue passenger-kilometers(RPK), has historically outpaced economic growth, represented byGDP. At the global level, the relationship isRPK (growth) = GDP (growth) + f(t)where f(t) is a time-varying function that typically centers around 2percent.This leads us to conclude that, at the regional level, about 60 to80 percent of air travel growth can be attributed to economicgrowth, which in turn is driven by trade. This conclusion isconsistent with the observation that countries whose economiesare tied to trade tend to have higher rates of air travel. Air travelrevenues consistently average about 1 percent of GDP incountries around the world, regardless of the size of the nationaleconomy. Globally, air travel has consistently tended toward thishistorical share of GDP. With a few exceptions, most countriesmove toward the general trend over the long term. The time-varying function f(t) accounts for the 20 to 40 percent of air travelgrowth that is not directly associated with GDP growth. Thiscomponent of growth derives from the value travelers placeon the speed and convenience that only air travel can offer.For example, the value travelers place on choice of arrival anddeparture times, routings, nonstop flights, choice of carriers,service class, and fares stimulates increased aviation services.Liberalization is the primary driver of value creation in the global airtransport network, typically spurring a “bump” in traffic demand.Studies suggest that as the relative openness of a country’sbilateral air service rises from the 20th to the 70th percentile,the resulting increase in traffic can boost air travel demand by30 percent. Often, improved air services directly and indirectlystimulate economic growth, creating a virtuous circle that leadsto further air transport growth, which in turn leads to addedeconomic growth, and so on. The percentage of air transportgrowth that comes from economic development compared to thepercentage that comes from the value of air travel services is anindicator of the maturity of an air travel market. Although individualregions may exhibit signs of slowing due to maturing markets,other regions continue or begin to grow vigorously. Current globalpercentages do not indicate that the world aviation market isnearing maturity in aggregate.MethodologyDrivers of air travelMethodologyWorld airline revenuesSource:ICAO, IATA IHS GlobalInsight nominal GDPPercent of GDP0.50%0.75%1.00%1.25%2010199760%-80% 20%-40%TraveldemandAdditionaltravel demandEconomicgrowthGlobaltradeValueof serviceSafe,efficient,competitiveindustryFuel CapabilityEnvironment InfrastructureAirlinestrategiesMarketevolutionEmergingmarketsMarketliberalizationMethodologyLevels of liberalizationSource:World Economic ForumTravel & Tourism Report 2009Level of liberalizationRegulatoryTransitionalLiberal
  13. 13. 14 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Forecast IndicatorsNew airline business models and emerging economiesEach year, we begin our analysis for the Current Market Outlookby examining key industry indicators, including fuel, marketliberalization, airline capabilities, airline strategies, emergingmarkets, economic growth, high-speed rail, and the environment.Worldwide economic activity is the most powerful driver ofcommercial air transport growth and the resulting demand forairplanes. The global gross domestic product (GDP) is projectedto grow 3.2 percent per year for the next 20 years, drivingworldwide air passenger traffic to average 5.0 percent and aircargo traffic to average 5.2 percent annual growth over the sameperiod.Global growth spurred by emerging economiesEmerging economies are projected to grow 5 percent per yearover the next 20 years, outpacing developed economies, whichwill average 2 percent growth.Emerging and developing economies will account for 72 percentof global growth between 2011 and 2031. Their share of realglobal GDP will increase from 30 percent to 44 percent overthe same period. The fastest growing economies include AsiaPacific (projected 4.6 percent growth), the Middle East (projected3.9 percent growth), and Latin America (projected 4.1 percentgrowth). Household income will grow and consumption patternswill change as educated labor forces expand, investmentin physical and social infrastructure increases, urbanizationprogresses, and the relative importance of economic sectorsshifts within the world’s emerging economies. With urbanization,the labor force shifts toward the industrial and service sectors,which spurs median incomes to progress towards the incomelevels of developed economies. The emerging global middle classwill expect to enjoy standards of living comparable to those indeveloped economies. As demand for international goods andservices rises and leisure time increases, appetite for travel willgrow.Business models and airline strategiesAirline strategies and business models help determine the typesof airplanes that airlines purchase and, as a result, the types ofairplanes that manufacturers produce. Low-cost carriers drivethe strong demand for new single-aisle airplanes. Their share ofthe market is expected to grow from 14 percent to 19 percent by2031. There is a need for 23,240 new single-aisle airplanes, 36percent of which will replace older airplanes and 64 percent willexpand the fleet. International expansion of network carriers isdriving demand for 7,950 new twin-aisle airplanes, including 940freighters, primarily large freighters such as the 747-8F and 777Freighter.Forecast indicatorsGrowth ratesForecast indicatorsAnnual traffic growth2011 to 2031Number of airlinepassengersAirline traffic(RPK)Cargo traffic(RTK)World economy(GDP)5.2%5.0%4.0%3.2%South AsiaChinaAsia PacificAfricaSoutheast AsiaLatin AmericaMiddle EastCISWorldOceaniaNorth AmericaEuropeNortheast AsiaAnnual GDP growth 2011 to 20317.14.66.54.14.34.43.23.43.91.92.62.81.37.14.66.54.14.34.43.23.43.91.92.62.81.3Forecast indicatorsEmerging markets driving economic growthSource:IHS GlobalInsightGrowth 2011 to 2031Within Asia Pacific incl. China 6.7%6.7%Within Asia Pacific excl. China 4.8%6.5%Within North America 2.2%2.2%Within China 6.9%6.9%Within Europe 3.5%3.5%Europe – Asia Pacific 5.7%5.7%North Atlantic 3.8%3.8%Middle East – Asia Pacific 7.2%7.2%Transpacific 4.6%4.8%Within Latin America 6.5%6.5%North America – Latin America 5.1%5.1%Within/to CIS 4.8%4.8%Europe – Latin America 4.6%4.6%Africa – Europe 4.8%4.8%
  14. 14. 15Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Fleet DevelopmentFleet size will doubleThe in-service commercial fleet will grow an average 3.5 percentper year to double in size from 19,890 airplanes today to 39,780by 2031. Over the next 20 years, the airline industry will need34,000 new airplanes, of which 41 percent will replace older, lessefficient airplanes; 59 percent of the new deliveries will reflectgrowth in emerging markets and evolving business models.Single-aisle airplanes to predominateSingle-aisle airplanes continue to dominate the world’s fleet.In 2011, the single-aisle category comprised 63 percent of theworld’s fleet. By 2031, we estimate that share will rise to 69percent. Of the forecast demand for 23,240 new airplanes, valuedat $2.0 trillion, 36 percent will replace older airplanes, while64 percent will expand the fleet. Emerging markets are drivingdemand for single-aisle airplanes. The Asia Pacific region isexpected to need 7,990 new airplanes to expand its single-aislefleet from 3,170 to 9,230 airplanes by 2031. Latin America, whichis expected to take delivery of 2,080 new single-aisle airplanes,and the Middle East, which is expected to take delivery of 1,060new airplanes, also generate strong demand. Low-cost carriers,whose business models focus on fleet commonality, also drivedemand for single-aisle airplanes.Expanding international markets increase demandTraffic on long-haul routes is forecast to grow 5.2 percent annuallyover the next 20 years, creating demand for 7,950 new twin-aisleairplanes. The largest twin-aisle markets are Asia Pacific, Europe,North America, and the Middle East, which will take nearly 90percent of all new deliveries.Efficiencies of the fleetIncreased airline costs, specifically increased fuel costs, aredriving airlines to operate the most efficient aircraft available.Consequently, we foresee a modest increase in the average sizeof airplanes in operation. Airlines are replacing small regionaljets with larger regional jets. This trend continues in the single-aisle category. Airlines that have ordered 737-700s are ordering737-800s, and airlines that ordered 737-800s are ordering737-900ERs. In the twin-aisle fleet, it is the medium twin-aislecategory, represented by the 777, that is growing. In 2011, thissize category made up 50 percent of the twin-aisle fleet. By 2031,it will make up 59 percent of the twin-aisle fleet. Current ordersreflect this trend. In 2011, there were 202 orders placed for 777s,an increase of 165 percent compared to 2010.Fleet developmentsMarket share by business modelsFleet developmentsOver half of new deliveries are for growthFleet developmentsWorld fleet will double by 203140,00030,00020,00010,0000Delivery units34,0002011Airplanes19,8902031Airplanes39,780• Fleet growth • Fleet replacement • Fleet retained19,89059%5,78014,11041%20213%21% 8%68%201129,610airplanes19,890airplanes4%19% 14%63%203139,780airplanes3%23% 5%69%•Freight•Charter and inclusive tour•Low cost•Intermediate network•Broad network2%1%50%23%24%•747 and larger •Twin aisle •Single aisle •Regional jets
  15. 15. 16 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Single-aisle aircraft remain pivotalOver the next 20 years, we project that 23,240 single-aisleairplanes will be delivered, representing nearly 70 percent ofcommercial airplane deliveries and 45 percent of total deliveryvalue. Most commonly used for shorter distance travel, single-aisle airplanes will find new applications in emerging markets aspassenger demand continues to grow. Airlines will continue torely on single-aisle airplanes to connect adjacent regions, suchas North America to South America and Oceania to SoutheastAsia. Asia Pacific will receive 34 percent of the new single-aisleaircraft, while Europe and North America will take 25 percentand 22 percent, respectively. In the mature markets, new single-aisle airplanes will replace aging airplanes, such as MD-80s, 737Classics, and older A320s. As more new 737 MAX and A320neoairplanes enter service, overall fleet efficiency will improve and themore capable airplanes will be able to serve new markets.International traffic creates twin-aisle demandThe twin-aisle airplane segment is the highest valued segmentof the long-term forecast, valued at US$2.1 trillion over the next20 years. Entry into service of airplanes such as the Boeing 787Dreamliner, and later, the Airbus A350 is allowing airlines to createnew point-to-point international service. These new airplanefamilies will help foster traffic growth between regions by allowingairlines to supplement current service provided by the Boeing 777and the Airbus A330. Twin-aisle airplanes account for 24 percentof forecast deliveries, which is 47 percent of the projected deliveryvalue. Over the next 20 years, the vast majority of twin-aisleairplanes currently flying will be retired. By 2031, new airplanes willaccount for 87 percent of the twin-aisle fleet.Demand for large airplanes focused in key regionsAsia Pacific, Europe, and the Middle East account for more than90 percent of large-airplane demand in the 20-year forecast.These airplanes will serve as passenger jetliners on high-traffictrunk routes, as well as dedicated commercial freighters. Theforecast 790 deliveries are valued at US$280 billion, or 6 percentof the total delivery value. The Asia Pacific region will receive 41percent of these deliveries, while Europe will take 25 percent andthe Middle East will take 24 percent. While medium-size twin-aisleairplanes will take a growing share of long-haul traffic over thenext 20 years, large airplanes will remain an important part of thecommercial airline fleet.New AirplanesNew airplanesBoeing order backlog: $308BNew airplanesMarket value: $4.5 trillionNew airplanesDeliveries by region2011 to 2031Leasing andgovernmentMiddle East,Central andSouth AsiaChina, East andSoutheast AsiaAsia PacificRussiaand EuropeLatin America,Africa, andCaribbeanNorth America14%17%17%18%14%13%7%Delivery units3%3%7%7%23%22%35%2012 to 2031New airplanes34,000NewRegion airplanes• Asia Pacific 12,030• North America 7,290• Europe 7,760• Middle East 2,370• Latin America 2,510• CIS 1,140• Africa 900Total 34,00005001,0001,5002,0002,500$80Regional jets2%$2,030Single aisle45%$2,080Twin aisle47%$280747 and larger6%Market valuein billions
  16. 16. 17Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Resilient demand for air cargoWhile surface transport accounts for the majority of the world’sfreight traffic, air cargo remains indispensable for industriesthat transport perishables, such as seafood or flowers; high-value, low-weight goods, such as consumer electronics orpharmaceuticals; and time-critical goods such as just-in-timeinventory items. Lately, with rising fuel prices, shippers havesettled for slower modes of transport. But the speed advantage ofair cargo ensures air freight’s role in the global economy.Air cargo can be carried in the lower hold of passenger flights oron dedicated freighters. Capacity on passenger flights has beenexpanding, especially as greater numbers of highly cargo-capableairplanes, such as the 777-300ER, enter the fleet. Lower-holdcargo can generate extra profit for passenger airlines, takingadvantage of dense passenger networks. But freighters, withlarger payloads and routes and frequencies optimized for cargo,carry the majority of traffic—about 60 percent.Air cargo traffic growth, measured in revenue tonne-kilometers(RTK), is projected to average 5.2 percent over the next 20 years.Global economic growth and the need to replace aging airplaneswill create a requirement for 2,760 freighter deliveries over thesame period. About 1,820 of these will be passenger airplaneconversions. The remaining 940 airplanes, valued at $250 billion,will be new. The freighter fleet will nearly double in size, from 1,740airplanes in 2011 to 3,200 in 2031.Most standard-body freighters to be conversionsBoeing forecasts a requirement for 1,120 standard-bodyfreighters, nearly all of which will be passenger conversions. Thelow capital cost of converted airplanes makes them attractivefor the low-demand routes typically flown in standard-bodyoperations.Express carriers drive medium widebody marketOf the 710 medium widebody freighters delivered during theforecast period, 260 will be new purpose-built freighters. Thismarket segment is driven by express carriers, which value thebalance between the lower cost per tonne achieved by largerairplanes and the schedule flexibility of smaller airplanes.Intercontinental operations favor new, large freightersAlthough purchase prices for converted large freighters areattractive, the performance and reliability advantages of new,purpose-built freighters outweigh this consideration—particularlyfor intercontinental cargo operations, where larger payloads andextended ranges are crucial. Of the 930 large freighter deliveries,680 will be new airplanes.Air Cargo MarketAir cargo market940 new and 1,820 convertedAir cargo marketAnnual growth: 5.5% since 1980Air cargo marketMarket value: $250 billionChange in cargo trafficyear over year percentWorld air cargo traffic*RTKs** in billions•Cargo trafficchange25020%20015010050010%0%-10%-20%1980199020002011*Carried on passenger and freighter**Revenue tonne-kilometers•ActualtrafficMarket valuein billions$50Medium40 to 80tonnes$200LargeMore than80 tonnes250500200 80%10015020%2012 to 2031Freighters 2,760Share of fleet0% 450 26025%68050%75% 1,120100% 2502031Freighters3,2002011Freighters1,740StandardLess than 45 tonnes• New • ConvertedMedium40 to 80 tonnes• New • ConvertedLargeMore than 80 tonnes• New • ConvertedDelivery units
  17. 17. 18 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031MiddleEastEuropeLatinAmericaAsia PacificCISNorth AmericaAfricaWorld regionsMarket value: $4,470 billionWorld regionsKey indicators and new airplane marketsNew Shareairplanes by sizeLarge 790 2%Twin aisle 7,950 24%Single aisle 23,240 68%Regional jets 2,020 6%Total 34,0002011 2031Fleet FleetLarge 790 1,030Twin aisle 3,710 9,110Single aisle 12,610 27,430Regional jets 2,780 2,210Total 19,890 39,780GrowthmeasuresEconomy (GDP) 3.2%Traffic (RPK) 5.0%Cargo (RTK) 5.2%Airplane fleet 3.5%MarketsizeDeliveries 34,000Market value $4,470BAverage value $130MDelivery units6%2%24%68%2012 to 2031New airplanes34,000100%0%75%50%25%Share of fleet2031Airplanes39,7802011Airplanes19,890•747 and larger •Twin aisle •Single aisle •Regional jetsWorld regionsNew airplane market by regionGlobalized demandThe number of airplanes in the world fleet grows an average 3.5percent each year as passenger traffic, measured in revenuepassenger-kilometers, grows 5.0 percent per year. Cargo traffic,measured in revenue tonne-kilometers, grows 5.2 percent ayear. Over the next 20 years, this will create a need for 33,060passenger airplanes and 940 freighter airplanes. Increasingdemand for new airplanes from airlines in emerging marketsaround the globe drives this expansion and significantly increasesthe industry’s resilience to regional economic fluctuations.Regional focusAir transport markets and airline business models evolve atdifferent rates from region to region. Airplane demand thereforevaries across the globe. As new airlines emerge, establishedairlines seek to preserve and boost their share of the passengermarket by increasing frequency of service, expanding the numberof city pairs served, offering new products, and introducing newbusiness and premium passenger services—all while staying trueto the airline’s brand image.Each region’s unique market characteristics affect its demandfor airplanes. For example, the markets in North America andEurope are shaped by aggressive growth of low-cost carriers andthe need to replace aging airplanes in the fleets of establishednetwork carriers. Demand is strongest for single-aisle airplanesin these markets. In the Middle East, on the other hand, airlinebusiness models concentrate on long-haul international services,which favor twin-aisle jetliners. The Asia Pacific region is seeingmarkets surge for both domestic and international services,creating demand for a more even mix of single- and twin-aisleairplanes.World Regions
  18. 18. 19Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Growing marketsThe vibrant economies in the Asia Pacific region continue to leadthe world economic recovery. Intrinsic strength, progressive tradeagreements among the region’s countries, and recovering globaldemand helped most economies in the region maintain growththrough the downturn. China and India will lead the region’seconomic growth with 4.6 percent growth per year for the next 20years, significantly outpacing the world’s average growth rate. Theregion’s share of world GDP will expand from 28 percent today to36 percent by 2031.Rising traffic levelsDuring the next 20 years, nearly half of the world’s air trafficgrowth will be driven by travel to, from, or within the Asia Pacificregion. Total traffic for the region will grow 6.4 percent peryear. Fueled by national economic growth and the increasingaccessibility of air transport services, traffic within the region willgrow faster than traffic to and from other regions. Domestic andinternational travel within the region will grow 6.7 percent per year.Air cargo plays a critical role in the region’s economy, transportinggoods over difficult terrain and vast stretches of ocean. Some ofthe world’s largest and most efficient cargo operators are locatedin Asia. Air cargo will grow 5.9 percent per year during the next20 years. Carriers within the region are expected to take 330 newfreighters, with an additional 450 conversions.Asia Pacific airlines will need 12,030 new airplanes, valued at $1.7trillion, over the next 20 years. The number of airplanes in theAsia Pacific fleet will nearly triple, from 4,710 airplanes in 2011 to13,670 airplanes in 2031. New low-cost carriers and demand forshort-haul flying have spurred a substantial increase in single-aisleaircraft. In the past 8 years, single-aisle capacity has doubled andwill likely double again in the coming decade.Liberalization expands marketsThe structure of the Asia Pacific airline industry is changing asregulations are liberalized and carriers expand beyond nationalboundaries. The impact of liberalization is particularly dramaticin the case of low-cost carriers, which are increasing air travel bylowering fares and opening new markets. Established airlines areforming low-cost units to compete, often as joint ventures withhigh-profile, low-cost brands within the region. This competitionis rapidly improving the affordability and accessibility of air travel,which will stimulate demand in established markets and meet theemergent travel needs of the rising middle class.World RegionsAsia PacificAsia PacificMarket value: $1,700 billionAsia PacificKey indicators and new airplane marketsAsia PacificNew airplanes: 12,030NortheastAsiaOceaniaSouthAsiaChinaSoutheastAsiaNew Shareairplanes by sizeLarge 320 3%Twin aisle 3,230 27%Single aisle 7,990 66%Regional jets 490 4%Total 12,0302011 2031Fleet FleetLarge 340 460Twin aisle 1,080 3,490Single aisle 3,170 9,230Regional jets 120 490Total 4,710 13,670GrowthmeasuresEconomy (GDP) 4.6%Traffic (RPK) 6.4%Cargo (RTK) 5.9%Airplane fleet 5.5%MarketsizeDeliveries 12,030Market value $1,700BAverage value $140MDelivery units4%3%66%2012 to 2031New airplanes12,030100%0%75%50%25%Share of fleet2031Airplanes13,6702011Airplanes4,71027%•747 and larger •Twin aisle •Single aisle •Regional jets
  19. 19. 20 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-203140 years of working togetherBoeing is celebrating 40 years of working together with China’saviation industry. In 1972 CAAC placed an order for China’sfirst Boeing airplanes--ten 707s. Mainland Chinese airlines havesince ordered more than 900 Boeing airplanes. More than 6,000people currently work at Boeing-related businesses and tens ofthousands more support Boeing suppliers. This partnering willcontinue.Continued growthWith GDP forecast to rise 6.5 percent annually over the next 20years, China will continue to serve as a growth engine for theglobal economy. China’s share of world GDP will continue toincrease over the next several decades. As Chinese incomesconverge toward those in the historical industrialized nations,an expanding middle class will expect to enjoy a comparablestandard of living and consumption patterns.Traffic continues to be robust, rising 12.1 percent in 2011compared to 2010. Growth will moderate toward 7.0 percent,which will nonetheless drive a need for 5,260 new airplanesvalued at $670 billion.A projected 230 airports will be available for commercial use by2015 as domestic travel continues to grow. Airlines will also lookfor opportunities to expand, particularly in regional and long-haulmarkets. The number of new international markets has doubledover the past 10 years. Over the next 20 years, intra-Asia andlong-haul traffic are both expected to grow 7.2 percent, driving thefuture fleet mix. Single-aisle airplanes will be preferred for newlyopening markets within China. Within Asia, a mix of single-aisleand twin-aisle airplanes will be needed, while long-haul flying willrely on airplanes like the 787, 777, and 747-8 Intercontinental.Cargo marketThe Chinese cargo market is one of the world’s largest andfastest growing. Domestically, it has grown 15.5 percent annuallysince 1990. China’s airlines are forecast to grow 6.2 percentannually over the next 20 years, outpacing all other regions. Thisgrowth suggests a need for 120 new freighters and 230 freighterconversions. Chinese cargo airlines now number among theworld’s top cargo airlines, and we expect their market share willcontinue to increase.Adapting business modelsHistorically, the majority of airlines in Europe and North Americawere large network airlines. Today a mix of network carriers,low-cost carriers, charter airlines, and air cargo operators meetsconsumer needs. As aviation continues to grow in China, airlineswill adapt and evolve their business models to meet the needs oftheir customers.World RegionsChinaChinaMarket value: $670 billionChinaKey indicators and new airplane marketsNew Shareairplanes by sizeLarge 110 2%Twin aisle 1,190 23%Single aisle 3,650 69%Regional jets 310 6%Total 5,2602011 2031Fleet FleetLarge 80 140Twin aisle 280 1,310Single aisle 1,490 4,220Regional jets 60 310Total 1,910 5,980GrowthmeasuresEconomy (GDP) 6.5%Traffic (RPK) 7.0%Cargo (RTK) 6.2%Airplane fleet 5.9%MarketsizeDeliveries 5,260Market value $670BAverage value $130M•747 and larger •Twin-aisle •Single-aisle •Regional jetsDelivery units6%2%69%2012 to 2031New airplanes5,260100%0%75%50%25%Share of fleet2031Airplanes5,9802011Airplanes1,91023%ChinaChinese airline expansion in Asia and long haul routes20–year growthRPKs (billions)Internationallong haulRegional–AsiaDomesticRPKs include Hong Kong and Macau airlines0 1,8009006.9%7.2%7.2%•2011 traffic •Added traffic
  20. 20. 21Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031World RegionsNortheast AsiaModest economic growthNortheast Asia’s gross domestic product is forecast to grow 1.35percent annually over the next 20 years. This modest growthprojection reflects the slender growth of the dominant Japaneseeconomy over the past decade. Although Japan’s economyis forecast to grow as it recovers from the recent earthquakesand tsunami, low birth rates and a declining working-agepopulation will moderate the long-term growth rate. South Korea’sbroadening industrial base is forecast to drive its economy togrow faster than Japan’s.Northeast Asia’s air capacity grew more than 50 percent in the1990s. Over the past decade, however, air travel growth slowedto 5 percent in the wake of a series of economic disruptions,including the Asian financial crisis, SARS epidemic, slumpingglobal economy, natural disasters, and the restructuring of amajor carrier. To keep pace with the economic growth andincreasing air travel of neighboring nations, Japan and SouthKorea are executing new trade agreements, reducing traditionaltravel barriers, and potentially privatizing portions of infrastructureto spur domestic and inbound travel growth.Easing operating restrictions to promote growthNortheast Asia’s air travel is forecast to grow 3.7 percent annuallyover the next 20 years. Expanded operations agreements withthe United States, Europe, China, the Middle East, and otherAsia Pacific nations are encouraging global network carriers andlow-cost airlines to expand services and open new markets.Liberalization and the rapid growth of economic ties withneighboring regions are driving brisk growth in passenger trafficwith other Asia Pacific countries. Low-cost carriers spurredsubstantial growth in travel to South Korea from neighboringnations in 2012, and three new low-cost carriers in Japan are alsoexpected to stimulate domestic and short-haul demand.Airport capacity will continue to increase, particularly at Tokyo’sHaneda and Narita airports. Improved market access, airportdevelopment, increased competition, and expanded low-costservice to, from, and within Northeast Asia will nurture continuedair travel growth.Fleet modernization continuesNetwork carriers in Northeast Asia are restructuring, renewingfleets, forming joint ventures, and introducing new products.Airlines in Japan and South Korea continue to modernize theirfleets and grow their international networks, creating a need for1,270 new airplanes over the next 20 years.The number of regional jets, including the anticipated MitsubishiRegional Jet (MRJ), is forecast to grow slightly. Single-aisleairplanes will account for 47 percent of new deliveries. New twin-aisle airplanes will account for 40 percent of new deliveries, whilethe number of large airplanes will remain relatively constant.Northeast AsiaMarket value: $220 billionNortheast AsiaKey indicators and new airplane marketsNortheast AsiaCapacity growthNew Shareairplanes by sizeLarge 70 6%Twin aisle 510 40%Single aisle 600 47%Regional jets 90 7%Total 1,2702011 2031Fleet FleetLarge 80 120Twin aisle 300 580Single aisle 300 580Regional jets 30 90Total 710 1,370GrowthmeasuresEconomy (GDP) 1.3%Traffic (RPK) 3.7%Cargo (RTK) 5.8%Airplane fleet 3.3%MarketsizeDeliveries 1,270Market value $220BAverage value $170MDelivery units7%6%47%2012 to 2031New airplanes1,270100%0%75%50%25%Share of fleet2031Airplanes1,3702011Airplanes71040%•747 and larger •Twin-aisle •Single-aisle •Regional jetsBillions of ASKs25201510501990 2001 2011 2021 2031•Other regions•Other Asia Pacific•Within Northeast Asia•Europe•North AmericaProjectedProjected
  21. 21. 22 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031World RegionsSouth AsiaRobust traffic growthSouth Asian air travel is expected to grow 8.4 percent per yearover the next 20 years, outpacing all other regions in our long-term forecast. Traffic will remain focused on the Asian continent,with the largest flows comprising domestic travel and travel withinSouth Asia and flights to and from the Middle East and SoutheastAsia.Economic development and socioeconomic shifts are leadingto rapid economic growth and expansion of air travel. A growingshare of South Asia’s large population (totaling 1.65 billionin 2011) is entering the workforce for the first time, boostingeconomic activity and incomes. Real gross domestic product(GDP) grew 7.3 percent per year from 2001 to 2011. Emergingmarkets averaged only 6 percent growth during the same period.Incomes increased even faster, with GDP per capita growing byabout 10 percent per year. With continued government supportof economic policy liberalization, market reform, and investment,India could become the world’s fourth-largest economy within 20years.South Asia’s airlines have been helped by liberalization in keymarkets, including the domestic Indian market, and flightsbetween India and the Middle East. Liberalization allows airlinesto open routes, add frequencies, and try new business models.As a result, air transport has become more convenient and lessexpensive throughout South Asia.Consolidation and reform in IndiaIndian carriers recently suffered record-breaking financial losses,but there are reasons to hope for profitable future growth.Kingfisher’s contraction in 2011 and 2012 reduced capacity inthe market, allowing healthier airlines to take international anddomestic market share, even as they implemented much-neededfare increases.The Government of India is helping with targeted reforms. Air Indiahas long held a right of first refusal for international traffic rights.Exercise of this right has been detrimental to other Indian carriers,but not to foreign carriers. The Government’s priorities havingchanged in early 2012, full utilization of traffic rights by Indianairlines will now be encouraged. The Government also allowedreform in airline fuel purchasing. This will offer some relief to Indianairlines, which face some of the highest fuel prices in the world.Further opportunities include a proposal to allow foreign airlines toacquire 49 percent of Indian airlines. The proposal has languishedfor years, but support for action is building. For Indian carrierswith weakened balance sheets, foreign direct investment wouldbe a welcome source of funds.South AsiaMarket value: $210 billionSouth AsiaKey indicators and new airplane marketsSouth AsiaSouth Asia traffic varies by marketNew Shareairplanes by sizeLarge – –Twin aisle 340 20%Single aisle 1,300 79%Regional jets 20 1%Total 1,6602011 2031Fleet FleetLarge 10 –Twin aisle 100 370Single aisle 360 1,500Regional jets – 20Total 470 1,890GrowthmeasuresEconomy (GDP) 7.1%Traffic (RPK) 8.4%Cargo (RTK) 5.9%Airplane fleet 7.2%MarketsizeDeliveries 1,660Market value $210BAverage value $130MDelivery units1%79%2012 to 2031New airplanes1,660100%0%75%50%25%Share of fleet2031Airplanes1,8902011Airplanes47020%•747 and larger •Twin-aisle •Single-aisle •Regional jets02004006008001,0001,2002011RPKs (billions)Growth Rate• Within South Asia: 9.5%• Africa/Middle East: 7.4%• Europe: 7.4%• Southeast Asia: 8.6%• China/Northeast Asia: 8.6%2011 2031RPKs (billions)
  22. 22. 23Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031World RegionsSoutheast AsiaAirlines expand operationsAirlines have grown strongly as Southeast Asia continues todevelop economically. Low-cost carriers are expanding andgaining market share as their attractive fares and new routesstimulate demand. Legacy carriers have restructured theiroperations and finances to become more competitive andgrow. Some have launched subsidiaries or partnered with low-cost airlines to expand product offerings in the quickly evolvingmarket. Rapid market growth will continue as the Associationof Southeast Asian Nations (ASEAN) strengthens business andleisure travel ties within ASEAN and with China and Taiwan.Travelers are increasingly likely to book multi-stop itineraries aslow fares and network integration make this more attractive. New,efficient airplanes with improved capabilities and lower operatingcosts are key to airline business strategies. Orders for newairplanes have dramatically increased to meet growing demandand enable new, direct, long-range markets.Liberalization opens routesRegulatory changes and infrastructure improvements are crucialto air travel expansion. Many traditional barriers to growthhave fallen as ASEAN countries relax market regulation withinSoutheast Asia and across the strait with Taiwan and China.For example, more than 700 passenger flights per week arenow scheduled between Taiwan and China, where servicehad been limited to charter flights. Increased service betweenASEAN capital cities signals a transition toward a unified regionalaviation market. Not waiting for liberalization, several carriersare aggressively expanding into new markets by acquiring orpartnering with other Southeast Asian carriers to operate as acombined fleet on a single extended network. Governmentsand airport authorities are eager to expand their aviationinfrastructures and capitalize on increased trade and tourism.Airlines bolster economic growthEconomic relationships and collaboration among SoutheastAsian countries continue to strengthen. Air transportation isvital to the region’s above-average GDP growth projection of4.8 percent annually over the next 10 years. For example, moreaffordable air travel options have spurred growth throughout theservices sector, including tourism and financial services. Air cargooperations enable the efficient shipment of manufactured goods.Overall, air travel to, from, and within Southeast Asia is projectedto grow at an average annual rate of 6.5 percent over the next 20years. Traffic within Southeast Asia is expected to grow at a rateof 7.6 percent per year. More than half of new airplane deliverieswill be single-aisle airplanes, needed to serve Southeast Asianroutes.Southeast AsiaMarket value: $470 billionSoutheast AsiaKey indicators and new airplane marketsSoutheast AsiaBacklog: 1,050 aircraftSource:AscendJanuary 2012New Shareairplanes by sizeLarge 110 4%Twin aisle 950 32%Single aisle 1,840 62%Regional jets 70 2%Total 2,9702011 2031Fleet FleetLarge 130 150Twin aisle 310 980Single aisle 680 2,280Regional jets 20 70Total 1,140 3,150GrowthmeasuresEconomy (GDP) 4.3%Traffic (RPK) 6.5%Cargo (RTK) 5.7%Airplane fleet 5.7%MarketsizeDeliveries 2,970Market value $470BAverage value $160MDelivery units2%4%62%2012 to 2031New airplanes2,970100%0%75%50%25%Share of fleet2031Airplanes3,4802011Airplanes1,14032%•747 and larger •Twin-aisle •Single-aisle •Regional jetsUnits0 400200 600 800Regional jetSingle aisleTwin aisle747 andlarger
  23. 23. 24 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031World RegionsOceaniaA thriving marketWith roughly 40 million people--only 0.5 percent of the world’spopulation--Oceania still accounts for 14 percent of the world’sair traffic today. Total Oceania air traffic is forecast to maintain 5percent annual growth over the next 20 years as connectionswith the Asia Pacific region and the rest of the world continueto strengthen. Traffic to and from Oceania will grow faster thaninternal traffic, which will grow 4 percent per year. Capacitybetween Oceania and Southeast Asia is forecast to increase 5percent per year as this flow continues to be the primary gatewayto the rest of the world. In addition, new flights and markets willopen as trade and tourism with North America, the Middle East,and China expand. Annual traffic growth between the Middle Eastand Oceania is forecast to grow most quickly at 7 percent peryear, primarily as a result of Middle East carriers operating sixthfreedom flights connecting Oceania and Europe, Africa, and theMiddle East.Oceana’s airlines continue to adaptThe market in Oceania changed dramatically during the pastdecade as airlines redefined themselves during economicuncertainty. Qantas successfully countered the rise of the low-cost carrier business model by introducing its own LCC, Jetstar.Virgin Blue sought to compete against Qantas by creating aspinoff airline, V Australia. In 2012, however, Virgin Blue unifiedits product by rebranding all its airlines as Virgin Australia. AirNew Zealand has continued to differentiate its product with theintroduction of the Boeing 777-300ER and its unique custom-designed Economy Skycouch seats. In addition, marketliberalization is boosting international competition from foreignairlines carrying passengers to and from Oceania.New airplane requirementAs traffic increases and airlines evolve and expand, there will bea continued need for new airplanes in Oceania. Over the next 20years, it is expected that Oceania will need 870 new airplanes.Of those, 600 will be single-aisle airplanes needed to transportpeople within Oceania or to nearby Southeast Asia. In addition,240 twin-aisle and 30 large airplanes will be needed for long-range travel across the globe. This new generation of airplaneswill enable airlines to open long, thin routes that would not beeconomical to serve using the previous generation of airplanes.The increasingly interconnected world will create a strongdemand in Oceania for small- to medium-size twin-aisle airplanes,such as the 787.OceaniaKey indicators and new airplane marketsOceania460 new airplanes required over next 20 yearsNew Shareairplanes by sizeLarge 30 3%Twin aisle 240 28%Single aisle 600 69%Regional jets – –Total 8702011 2031Fleet FleetLarge 40 50Twin aisle 90 250Single aisle 340 650Regional jets 10 –Total 480 950GrowthmeasuresEconomy (GDP) 2.8%Traffic (RPK) 4.9%Cargo (RTK) 5.4%Airplane fleet 3.5%MarketsizeDeliveries 870Market value $130BAverage value $150M1,0008006004002000Airplane fleet2011–2031• 2011 • Replaced • New• 2031 • RetainedOceaniaMarket value: $130 billionDelivery units3%69%2012 to 2031New airplanes870100%0%75%50%25%Share of fleet2031Airplanes9502011Airplanes48028%•747 and larger •Twin-aisle •Single-aisle •Regional jets
  24. 24. 25Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Growth moderating in third year of improvementThe North American commercial airline industry posted its thirdyear of traffic and capacity growth amid sustained profitability.Capacity and traffic both grew 2 percent, year over year, withvarying results for network and low-cost carriers. Network carriersreported a 1 percent rise in both capacity and traffic, contributingto an 83 percent passenger load factor. The low-cost carriersegment continues to grow at a faster rate, with capacity growing6 percent and traffic growing 7 percent, contributing to a 1percent boost in passenger load factor to 82 percent.The two largest Canadian airlines are also growing faster thanUS network carriers. Combined available seat-miles and trafficincreased at the same 5 percent rate, while passenger load factorremained flat at 81 percent.Fleet replacement acceleratesHigh fuel prices are intensifying the need for new fuel-efficientairplanes, prompting several airlines in the United States toaccelerate their fleet renewal programs. At least 900 new fuel-efficient single-aisle airplanes were ordered in 2011, with deliveriesbeginning in the middle of this decade. American, Delta, andSouthwest have announced plans to replace some of their older,less efficient airplanes with Next-Generation 737s or the new 737MAX.Boeing 787-8 increasing market fragmentationSeveral new routes have been announced since the Boeing787-8 took to the sky. Boston and San Diego are the first citiesto celebrate new routes (initially to Tokyo) enabled by the newairplane’s state-of-the-art economics and capabilities. Additionalroutes to and from North America will be announced as 787deliveries continue.Fleet outlookThe long-term outlook for the North American airline industry is formodest growth through the forecast period. Network carriers willmaintain strict capacity discipline. Low-cost carriers will continueto outpace network carrier growth to accommodate increaseddemand and fill niches abandoned by network carriers. Financialstability also will be a key indicator of future growth. Severalairlines have indicated growth planning to be executed whenreturns are sufficient to fund their strategic goals.In consideration of these trends, we forecast the region’s demandto be 7,300 new airplanes to accommodate an average 2 percentannual traffic growth. Single-aisle airplanes account for the bulk ofdemand, which is forecast to exceed 5,000 new airplanes.World RegionsNorth AmericaNorth AmericaMarket value: $820 billionNorth AmericaKey indicators and new airplane marketsNorth AmericaChanging market share 1990–2011New Shareairplanes by sizeLarge 40 1%Twin aisle 1,320 18%Single aisle 5,040 69%Regional jets 890 12%Total 7,2902011 2031Fleet FleetLarge 120 110Twin aisle 1,030 1,740Single aisle 3,730 6,090Regional jets 1,770 890Total 6,650 8,830GrowthmeasuresEconomy (GDP) 2.6%Traffic (RPK) 2.8%Cargo (RTK) 4.5%Airplane fleet 1.4%MarketsizeDeliveries 7,290Market value $820BAverage value $110MRPM shareby air carrier2011100%80%60%40%20%0%•Southwest•JetBlue•Alaska•US Airways•United•Trans World•Others•Northwest•Eastern•Continental•American•Delta1990Delivery units12%1%69%2012 to 2031New airplanes7,290100%0%75%50%25%Share of fleet2031Airplanes8,8302011Airplanes6,65018%•747 and larger •Twin aisle •Single aisle •Regional jets
  25. 25. 26 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Strength despite uncertaintyThe European aviation market remained strong in 2011, despiteuncertainties from the sovereign debt crisis and the lingeringthreat of recession. Europe’s GDP increased by 1.8 percent in2011 compared to 2010. The Association of European Airlinesreports that member airlines carried 9.3 percent more passengersin 2011. Members of the European Low Fares Airline Association(ELFAA) reported a 6.1 percent increase in passengers. Europeanairlines acquired more than 330 new airplanes that year, of whichmore than 80 percent were single aisle.Aviation growth is expected to persist over the next 20 years, withEuropean airlines forecast to acquire 7,760 new airplanes valuedat $970 billion. Single-aisle airplanes will account for the majorityof deliveries, representing a 75 percent share.Although aviation growth in Europe is not as rapid as in theworld’s emerging economies, the region’s large installed base ofairplanes (more than 4,400 units) sustains a substantial demandfor replacement airplanes. This demand will account for 50percent of Europe’s new-airplane market.Europe is economically diverse, with both mature economiesand newer high-growth economies. Though uncertainties remainfor some European economies, the region’s GDP is expected togrow 1.9 percent annually during the forecast period, spurredby growth exceeding 3.6 percent in the rapidly developingeconomies. European Union transport liberalization effortscontribute to this growth, with negotiations taking place withTurkey, Brazil, India, Korea, and other countries.Leading strategic changeAirline operations continue to evolve with the launch of newventures and new business models. The next 20 years areexpected to bring additional mergers and acquisitions, along withincreased collaboration with alliance partners around the world.Large network airlines are tending to shift focus away fromshort-haul routes that are targeted by low-cost carriers (LCC) andtoward longer haul routes. LCCs have continued to add service inshort-haul markets, with ELFAA members providing 32 percentof capacity on intra-Europe flights in 2011. Smaller flag carriersand charter airlines will be challenged to adapt to a competitiveenvironment where LCCs dominate short-haul, point-to-pointservice, and large network carriers and their alliance partnersexploit the cost advantages of mega-hubs for long-haul traffic.EnvironmentEuropean airlines continue to reduce their environmental impactby replacing older, less efficient airplanes with newer technologyplanes, like the 787. By 2031, more than 93 percent of planesoperated by European airlines will have been delivered since 2011.World RegionsEuropeEuropeMarket value: $970 billionEuropeKey indicators and new airplane marketsEuropeLCC share of Intra-Europe short-haul serviceSource:OAGNew Shareairplanes by sizeLarge 200 3%Twin aisle 1,440 18%Single aisle 5,800 75%Regional jets 320 4%Total 7,7602011 2031Fleet FleetLarge 190 230Twin aisle 680 1,630Single aisle 3,160 6,120Regional jets 410 340Total 4,440 8,320GrowthmeasuresEconomy (GDP) 1.9%Traffic (RPK) 4.1%Cargo (RTK) 4.6%Airplane fleet 3.2%MarketsizeDeliveries 7,760Market value $970BAverage value $130MPercent of ASKs•Available seat-kilometers (ASK)2000 201135302520151050Delivery units4%3%18%75%2012 to 2031New airplanes7,760100%0%75%50%25%Share of fleet2031Airplanes8,3202011Airplanes4,440•747 and larger •Twin aisle •Single aisle •Regional jets
  26. 26. 27Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Long-haul, short-haul, and domestic markets growMiddle East airline traffic is projected to grow 6.4 percent,compounded annually, during the next 20 years. Revenuepassenger-kilometers will more than triple by 2031, supported byhealthy development of long-haul, short-haul, and domestic travel.The “Gulf 3”—Emirates, Qatar Airways, and Etihad Airways—provide the largest part of the region’s long-haul service,operating under “sixth freedom” agreements to connect twoforeign countries via a stop in the carrier’s home country.Favorably placed to connect Asia, Africa, and Europe, the MiddleEast is relatively new to the sixth freedom business model, whichhas been proven by both European and Asian carriers.The Middle East also generates its own long-haul origin anddestination traffic, with business and leisure hubs in Dubai,historical and resort sites in Egypt, beaches and natural wondersin Oman, and growing Hajj pilgrim traffic to Saudi Arabia. Guestworkers from South Asia and other regions also boost traffic tothe region.Low-cost carriers, with simplified networks and operations—oftenflying a single, narrowbody airplane type—are taking an increasingshare of the region’s short-haul traffic. The single-aisle fleets ofairlines like Air Arabia and flydubai can reach many destinations inSouth Asia, Europe, the CIS, and Africa.Fleet renewal a priorityMiddle East carriers often prefer to renew their fleets on a 15-yearcycle, a shorter cycle than the global average. Thus, of the 2,370forecast airplane deliveries to the region, about 30 percent willreplace older airplanes, leaving 70 percent for the region’s fleetgrowth.Policy and infrastructure crucial to growthInfrastructure development is a long-term concern for the region’scarriers. Although the region’s airspace is not yet crowded,large areas of airspace remain under military control, limiting theairspace available for commercial traffic. At smaller airports, thecapacity of immigration areas and check-in desks is not wellaligned with services that airlines aim to provide.Middle East governments are moving toward coordinatedaviation policy and market liberalization. The UAE, for example,makes funding and political support available for infrastructureand airport development; aviation is not heavily taxed, andvisas are easy to obtain. Saudi Arabia is moving toward marketliberalization, with plans to privatize Saudi Arabian Airlines. In2011, the Kingdom’s General Authority of Civil Aviation (GACA)began soliciting bids from foreign carriers to operate domesticservices. Additional opportunities include relaxing the pricecontrols on domestic airfares.World RegionsMiddle EastMiddle EastMarket value: $470 billionMiddle EastKey indicators and new airplane marketsSource:AscendMiddle EastLarge backlog, spread over the decadeNew Shareairplanes by sizeLarge 190 8%Twin aisle 1,100 46%Single aisle 1,060 45%Regional jets 20 1%Total 2,3702011 2031Fleet FleetLarge 70 170Twin aisle 470 1,170Single aisle 470 1,320Regional jets 60 50Total 1,070 2,710GrowthmeasuresEconomy (GDP) 3.9%Traffic (RPK) 6.4%Cargo (RTK) 5.7%Airplane fleet 4.8%MarketsizeDeliveries 2,370Market value $470BAverage value $200M150Airplane orders• 747 and larger• Twin aisle20122014132016152018172020192022210 50 100• Single aisle• Regional jetsDelivery units1%8%46%45%2012 to 2031New airplanes2,370100%0%75%50%25%Share of fleet2031Airplanes2,7102011Airplanes1,070•747 and larger •Twin aisle •Single aisle •Regional jets
  27. 27. 28 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Stability fosters economic growthThe Latin America region’s increasing political stability createsa favorable context for economic growth. Regional economieshave weathered the 2008-09 financial crises well. Their recoveryhas been faster than in other regions of the world, includingOrganisation for Economic Co-operation and Development(OECD) economies. Within the region, South America hasoutperformed Central America, Mexico, and the Caribbean. Theglobal economy continues to be the main source of uncertaintyfor Latin America and the Caribbean. Although inflation remainsa concern, the region is forecast to enjoy a growth rate of 3.6percent, well above the world average of 2.6 percent.International and domestic aviation on the upswingThe natural barriers of the Andes Mountains and the Amazonrainforests present formidable obstacles to rail and roaddevelopment. The region therefore relies heavily on aviation fordomestic transport. Airspace, airport, and ground infrastructureare all struggling to keep pace with growing aviation demand.The anticipated increase in international traffic from the 2014World Cup and the 2016 Olympics in Brazil highlight the needfor investment. The greatest opportunity for growth is within theregion. For example, air travel is beginning to overtake bus travelin Mexico and Brazil. In 2011, the number of domestic air travelersin Brazil rose above the number of bus passengers for the firsttime, as 8.7 million passengers took their first commercial airplaneflight. Regional growth has spurred the rise of low-cost carriers(LCC) such as Viva, Interjet, Azul, and Volaris. As LCCs drivegrowth and stimulate demand, they are entering partnerships toextend their reach globally.The dynamic nature of Latin American aviation has produced ahealthier, more competitive marketplace and encouraged newairline business models. The region’s largest airlines have led theway with mergers, including Avianca/TACA, TRIP/Azul, and LAN/TAM, that streamline networks and introduce new efficiencies.Well run and profitable, with access to capital, the top carriers inthe region can compete with any airline in the world.Regional fleet expanding stronglyThe installed fleet is expected to grow 5.1 percent annually tocomprise 3,450 airplanes, including 2,510 new deliveries valued at$260 billion. Most of these will be single-aisle airplanes, spurredby intense regional traffic growth. The twin-aisle fleet will expandto 340 airplanes as regional carriers compete more strongly onroutes traditionally dominated by foreign operators.World RegionsLatin AmericaLatin AmericaMarket value: $260 billionLatin AmericaKey indicators and new airplane marketsSource:AscendLatin AmericaIncredible growth in airplane ordersNew Shareairplanes by sizeLarge – –Twin aisle 340 13%Single aisle 2,080 83%Regional jets 90 4%Total 2,5102011 2031Fleet FleetLarge – –Twin aisle 140 440Single aisle 1,020 2,850Regional jets 110 160Total 1,270 3,450GrowthmeasuresEconomy (GDP) 4.1%Traffic (RPK) 6.6%Cargo (RTK) 5.9%Airplane fleet 5.1%MarketsizeDeliveries 2,510Market value $260BAverage value $100M120Airplane orders• 747 and larger• Twin aisle2012201413201615201817202019210 40 80• Single aisle• Regional jetsDelivery units4%83%2012 to 2031New airplanes2,510100%0%75%50%25%Share of fleet2031Airplanes3,4502011Airplanes1,27013%•747 and larger •Twin aisle •Single aisle •Regional jets
  28. 28. 29Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Younger, more efficient fleetThe outlook for aviation demand in the Commonwealth ofIndependent States (CIS) continues to grow. The region isforecast to take delivery of a total of 1,140 new airplanes over thenext 20 years, valued at $130 billion. CIS airplane orders werestrong in 2011, both for models from western manufacturers andfor new Russian models, such as the Sukhoi Superjet 100 thatentered service in 2011 and the developmental Irkut MS-21. Thecurrent CIS order backlog accounts for 41 percent of forecastdeliveries.Economy recoveringThe economies of the CIS region grew moderately in 2011. GDPexpanded at a rate of 4.3 percent in 2011, in line with GDP growthof 4.5 percent in 2010. Overall, regional growth is expected tocontinue, with GDP growing 3.4 percent annually over the next20 years. Russia’s economy continues to be the region’s largest,accounting for more than 70 percent of the region’s GDP in 2011.The economies of Ukraine and Kazakhstan follow Russia in size.The Russian Transport Ministry’s Federal Air Transport Agencyreported that Russian airports serviced 112.4 million passengersin 2011, an increase of 12.9 percent compared to 2010. Over thenext 20 years, Boeing forecasts that air traffic to and from the CISregion will grow at a rate of 4.7 percent annually.Strong demand for twin-aisle airplanesLong-haul international traffic is expected to grow at an annualrate of 4.8 percent through 2031. The Russian TransportMinistry’s Federal Air Transport Agency reported nearly 47million passengers on international routes in 2011, a 14.9 percentincrease compared to 2010. Driven by increasing internationaltraffic, twin-aisle service will remain an important component ofthe region’s market, creating demand for 250 new fuel-efficienttwin-aisle airplanes and 30 large twin-aisle aircraft. The region’sgeographical size and diverse terrain make airline travel anattractive transportation option. Air travel will increase over thecoming 20 years as personal incomes rise and liberalization of airtransport regulations makes aviation services more available andaffordable.World RegionsCISSource:AscendCISStrong backlog of 473 airplanesCISMarket value: $130 billionCISKey indicators and new airplane marketsNew Shareairplanes by sizeLarge 30 3%Twin aisle 250 22%Single aisle 700 61%Regional jets 160 14%Total 1,1402011 2031Fleet FleetLarge 60 50Twin aisle 170 310Single aisle 650 970Regional jets 200 170Total 1,080 1,500GrowthmeasuresEconomy (GDP) 3.4%Traffic (RPK) 4.7%Cargo (RTK) 5.0%Airplane fleet 1.7%MarketsizeDeliveries 1,140Market value $130BAverage value $110M300• 747 and larger• Twin aisleDelivery unitsYear-end 2011250150100 200500268 57%103 22%96 20%6 1%• Single aisle• Regional jetsDelivery units14%3%22%61%2012 to 2031New airplanes1,140100%0%75%50%25%Share of fleet2031Airplanes1,5002011Airplanes1,080•747 and larger •Twin aisle •Single aisle •Regional jets
  29. 29. 30 Copyright © 2012 Boeing. All rights reserved.Current Market Outlook2012-2031Economic development supports air travel growthPolitical unrest in the north slowed African economic growthto 1 percent in 2011--well below the long-term average. Yet,as the second largest and most populous continent after Asia,Africa’s long-term economic potential is strong. Over the next twodecades, Africa’s economy is forecast to grow faster than theworld average, driven largely by demand for natural resources,including oil and metals, from both emerging and matureeconomies. These connections will foster demand for long-haultravel.A growing middle class and increased urbanization alsocontribute to the continent’s commercial aviation potential. TheAfrican Development Bank projects that Africa’s middle classwill grow by more than 700 million people over the next severaldecades. United Nations data shows that urban dwellers wereabout 15 percent of Africa’s population in 1950 and are expectedto be 50 percent by 2030--a trajectory similar to that of Asia.Air transport expanding and increasingly competitiveNorth Africa’s political upheaval has dampened air travel demand,particularly to and from Europe, where capacity remains below2010 levels. Capacity to other emerging markets and NorthAmerica, however, has risen 5 percent since 2010, indicatingpotential directions for growth. Rapid growth of traffic within Africaand with other emerging markets is overtaking Europe traffic,which constituted a 60 percent share of Africa’s total traffic 20years ago, but will fall to around 40 percent by the end of theforecast period.Economic links with other emerging markets also bring increasedcompetition. Africa presents growth opportunities to airlinesfrom other regions where demand growth is slower. Airlines inother emerging markets may take advantage of their networkconnections to serve African destinations. Within Africa, nationalairlines are expanding service to other African countries. Yetample service opportunities remain, as relatively few airlinescompete for intra-regional markets.Aviation and economic development projections depend ongovernment policy support for transport infrastructure. Theflexibility of aviation networks and the relatively low cost pernetwork kilometer make aviation infrastructure investment veryattractive compared to investment in other modes.Fleet developmentAfrica is forecast to require 900 new airplanes over the next 20years, doubling its fleet. Approximately 70 percent of forecastdeliveries will support growth. Single-aisle airplanes will accountfor the largest share of deliveries, while twin-aisle airplanes willaccount for half of the value of deliveries to Africa.World RegionsAfricaAfricaMarket value: $120 billionAfricaKey indicators and new airplane marketsAfricaCapacity to become more diverse50 10 15Weekly ASKs(billions)• Africa-Europe• Other Africa traffic flows• Within Africa19912001201120212031Source:OAGNew Shareairplanes by sizeLarge 10 1%Twin aisle 270 30%Single aisle 570 63%Regional jets 50 6%Total 9002011 2031Fleet FleetLarge 10 10Twin aisle 140 330Single aisle 410 850Regional jets 110 110Total 670 1,300GrowthmeasuresEconomy (GDP) 4.4%Traffic (RPK) 5.6%Cargo (RTK) 5.8%Airplane fleet 3.4%MarketsizeDeliveries 900Market value $120BAverage value $130MDelivery units6%1%30%63%2012 to 2031New airplanes900100%0%75%50%25%Share of fleet2031Airplanes1,3002011Airplanes670•747 and larger •Twin aisle •Single aisle •Regional jets

×