Airbusglobalmarketforecast 2009 - 2028

2009 - 2028
Flying smart,
thinking big

True innovation can be difficult to see,
but the identification and delivery of technological
breakthroughs are critical if the aviation industry
is to develop a sustainable future for the span
of this GMF and beyond.
This is particularly true in the field of alternative
energy, so the cover of this year's forecast
is a graphical representation of one
of 200,000 species of algae available
for research into aviation bio-fuels that
do not raise conflicts, such as diverting resources
from food production.
The sheer number of possibilities for algae
and the challenges ahead to realise their potential,
are useful reminders that resource and time
are arguably more important than
the original idea when it comes to finding
the best result for all.
True innovation can be difficult to see,
but the identification and delivery of technological
breakthroughs are critical if the aviation industry
is to develop a sustainable future for the span
of this GMF and beyond.
This is particularly true in the field of alternative
energy, so the cover of this year's forecast
is a graphical representation of one
of 200,000 species of algae available
for research into aviation bio-fuels that
do not raise conflicts, such as diverting resources
from food production.
The sheer number of possibilities for algae
and the challenges ahead to realise their potential,
are useful reminders that resource and time
are arguably more important than
the original idea when it comes to finding
the best result for all.

12 Demand for air travel
30 Traffic forecast
56 Demand for passenger aircraft
142 Air cargo forecast
154 Summary tables

Executive
Underlying demand strong
Over time, a number of significant developments have
influenced passengers and airlines, affecting the shape
and direction of the aviation industry, as well as deter-
mining the level of future demand for air transportation
around the world.
The latest development has clearly been the recent eco-
nomic downturn, which has given everyone in the
industry cause to reassess their business in light of
the prevailing competitive and operational environment.
These include such drivers as fuel price, finance availa-
bility and even aircraft product offerings. What forecas-
ters must decide is whether these changes significantly
impact the long-term trends of the industry. The good
news is that, despite bringing difficulties that can range
from falling demand, load factors, yields and profitability,
such cycles are generally relatively short lived compared
to the timescales considered for aircraft investment and
fleet turnovers. In addition, the industry can be subtly
changed for the better as a result of efficiency improve-
ments introduced to beat the downturn. This means
that when recovery comes, it is generally stronger and
Background
Strong demand,
benefiting people,
innovation
guaranteed

Global Market Forecast 7
Summary
more far reaching than the downturn.
There is no doubt that the major reason the industry
has always recovered its upwards trend is the strong
underlying demand for the benefits that air transport
brings to the world, its economies and, most impor-
tantly, to its people.
Real benefits for real people
While the cost of air travel in environmental terms is well
documented, including the 2% contribution to man
made CO2 emissions, little is said on the benefit side of
this equation. In monetary terms alone, aviation contri-
butes more than some G20 countries to world Gross
Domestic Product (GDP). These benefits are not merely
at a macro level; they permeate through the fabric of
21st Century living, benefiting increasing numbers of
people from every corner of the globe. Aviation contri-
butes to trade, by offering access to more lucrative and
geographically disparate markets; to investment, by
nurturing internationalisation through greater access to
skills and resources; to productivity, by stimulating
and encouraging competition, innovation and greater
efficiency; and to tourism, by facilitating a commercial
exchange between travellers and regions where econo-
mic growth could otherwise be limited.
What is often crucial for all of these elements, is that
people come face to face, developing and reinforcing
trust and gaining the kind of knowledge and understan-
ding of cultures, individuals, markets and places that
can only be gained by physically being there.
Innovation for passengers, airlines and the
environment
But underlying growth must be balanced with a sustai-
nable future. The last 40 years have seen aircraft fuel
burn and emissions reduced by 70% and noise by 75%,
but this is not to say that Airbus, or indeed the rest of the
industry, will sit back for the next 40 years and do
nothing. Innovation remains the key and ambitious tar-
gets have been set with an almost zealous desire to
improve fuel burn and resulting CO2 for our two biggest
concerns, our customers and our world.

Despite the economic crisis, markets in the emerging
economic nations are expected to continue to grow
over the next 20 years; their economies and demogra-
phic developments both driven by and benefiting from
air travel. Continued global liberalisation is giving grea-
ter market access to airlines and wider choice for pas-
sengers. Low-cost carriers will also continue to grow
around the world, but particularly in Asia, while the net-
work airlines will benefit from demand on the important
international markets and a wave of new international
travel consumers from the emerging countries.
Changing dynamics, particularly network evolution and
the role of mega-cities and congestion, are influencing
the future of aviation. All of these drivers were taken into
consideration when developing this edition of the Airbus
Global Market Forecast (GMF).
The highlights
Freighter
fleet
Passenger
fleet
New deliveries
24,951
Recycled
3,134
Retired
8,453
Converted
2,585
24,097 854
7,147 1,306
Passenger aircraft >100 seats
24,951 new passenger and
freighter aircraft
demand over
the 2009-2028 period
There is no doubt that the financial turmoil of 2008 and
the resulting downturn in the world economy, has
impacted passenger demand and traffic growth in the
short term. However, over the 2009-2028 period cove-
red by this forecast, the downturn represents a fairly
short timeframe. Therefore, overall world passenger
traffic is expected to increase by 4.7% per annum and
the number of frequencies offered on passenger routes
will more than double. Faced with increased competi-
tion and fluctuating fuel costs, airlines have already
achieved considerable productivity gains. Today, very
few seats are “wasted”, with very high load factors
across most major markets and flows expected once
again as the market recovers over the coming months.
When downturns start to bite, as with fuel prices,
congestion falls down the list of priority issues for many
in the industry. But unfortunately, this means a return to
delays, waste and cost as markets recover. This is an
issue for passengers, airlines and many of the world’s
most important airports and cities. Any future growth of
traffic and frequencies will once again be an increasing
challenge to airport infrastructure and air traffic mana-
gement. Using larger aircraft, with their reduced costs
per seat both in terms of cash and CO2, is a common
sense solution to congestion. There are already signs of
this today, with average aircraft sizes increasing across
all categories, from smaller regional aircraft to very large
aircraft. This will result in the average aircraft size increa-
sing by as much as 26% over the next 20 years.
This GMF assumes that all necessary infrastructure
improvements, including those already planned, will be
undertaken during the forecast period. However, given
the substantial investments and time required to carry
out such developments, there is the possibility that not
all the changes necessary may be achieved. Combined
with the need to reduce seat mile costs to cope with
developing competitive and environmental pressures,
this could cause average aircraft size to increase even
more than currently forecast. Therefore, airlines could
be forced to acquire more, larger aircraft, across the
whole spectrum of those available, to meet demand
efficiently and to fly smarter.
The traffic
Average aircraft
size will need
to grow
in the future

The world’s fleet, which includes both passenger (from
100 seats to very large aircraft) and freighter aircraft, will
grow from 15,750 beginning of 2009 to nearly 32,000 by
2028. At the same time, some 14,442 aircraft from the
existing fleet will be replaced by more eco-efficient
models. Of these, 3,134 will be recycled back into
passenger service, where they too will replace an older
generation model with another airline. It is also forecast
that 2,585 aircraft will be converted to freighters and the
remaining 7,417 will be permanently retired or withdrawn
from service, with increasing numbers decommissioned
through environmentally sensitive programmes, such as
the Airbus PAMELA project. The Airbus forecast conti-
nues to predict that the greatest demand for passenger
aircraft will come from airlines in the United States, the
People’s Republic of China and the United Kingdom, with
its mix of global, low-cost and charter airlines. Europe will
receive 25% of the total, with North America and Asia-
Pacific taking 23% and 31% respectively. In addition, the
world’s airlines will require more than 6,000 smaller air-
craft, either jet or turbo-prop, (with 19 to 100 seats) to
serve regional demand, especially in the US and Europe.
While traffic demand will nearly triple, airlines will more
than double their fleets of passenger aircraft (with over
100 seats) from 14,016 at the beginning of 2009 to
28,111 in 2028.
This will include deliveries of 24,097 new aircraft. Some
17,000 of these will be single-aisles for domestic and
intra-regional flows, which is more than in previous fore-
casts due to the emergence of low-cost carriers and
increased liberalisation. A large number of aircraft,
where new products must deliver even greater benefits
to passenger airlines and the environment, and a step
change beyond those on offer today.
The fleet
As many as 5,802 twin-aisle passenger aircraft will
be required to serve the existing, mainly international
markets created largely by growth on existing city pairs,
flows from and within emerging markets and the addi-
tion of new routes. Around 1,318 very large passenger
aircraft will be needed to link the 32 dynamic hub cities.
It should be no surprise that more than 50% of the
world’s fleet of very large passenger aircraft will be ope-
rated by the airlines in the Asia-Pacific region. With its
huge population increasingly concentrated in impres-
sive and vibrant cities, more and more people have the
economic ability as well as the desire to fly among these
destinations.
Freight traffic is expected to grow at 5.2% per annum.
Combined with fleet renewal, this will create demand for
3,439 freighter deliveries, 2,585 of which will come from
conversions and 854 of which will be new generation
factory-built freighters, mainly long-range or regional
freighters.
Overall, this means that by 2028 the world’s airlines will
take delivery of 24,951 new passenger and freighter
aircraft, worth US$3.1 trillion at current list prices. Most
of this business will be generated from single-aisle deli-
veries, while 1,729 large passenger and freighter aircraft
will account for 19% of total aircraft delivery value.
Despite concerns about aircraft deliveries following the
economic downturn, strong underlying demand will
emerge with the recovery, which means airlines require
an average of 1,248 new, eco-efficient aircraft deliveries
per year over the next 20 years. Combined with the
decommissioning of older generation aircraft, this will
gradually reduce the average fuel consumption of the
world’s fleet to less than three litres per 100 seat kilo-
metres, already achieved by the A380 today.
> 14,000
aircraft to be
replaced
by eco-efficient
types

The environmental impact of aviation will remain small
compared to other modes of transport and other
sources of man-made emissions, with the benefits
undeniably large. However, Airbus and the rest of the
industry is determined to minimise and even reduce the
environmental impact of aviation at every opportunity,
while maximising the contribution that it can make to
the quality of life, to better cultural understanding, to
greater learning, and to fair and sustainable economic
growth.
And that contribution is considerable. In 20 years, air
transport will directly employ some 8.5 million people
and contribute $1 trillion to world GDP. Measuring
across aviation, its supply chain, the spending of
employees in these businesses and the contribution air
transport makes to tourism, this will grow to 50 million
jobs and US$3.6 trillion of GDP; even more when you
consider the impact of other industries dependent on
aviation that are harder to measure.
In the future...
However, should growth in passenger and cargo traffic
be one percentage point lower than currently forecast,
the contribution to GDP would be reduced by US$600
billion and the number of jobs would be reduced by
6 million, including around 2 million in Asia-Pacific, 1.5
million each in Europe and North America, 400-500
thousand each in Africa and Latin America and over
200,000 in the Middle East.
In this long-term industry, where demand and resulting
growth will drive the need for more aircraft, and where
the stakes are so high for the millions of people who
depend on it, aviation must continue to innovate. It
must take the path with the most potential for custo-
mers and the environment, even if it is not necessarily
the shortest, cheapest or easiest. Anything else would
be irresponsible.
New aircraft demand will
average 1,248 per year
Passenger and freighter
deliveries worth
US$3.1 trillion
0
4,000
8,000
12,000
10,000
6,000
2,000
14,000
16,000
18,000
Single-aisle
& small jet
freighters
Small
twin-aisle
& regional
freighters
Intermediate
twin-aisle &
long-range
freighters
Large
aircraft &
large
freighters
% unit:
1,729
7%
2,008
8%
4,237
17%68%
16,977
*Passenger aircraft >100 seats + freighters
Number of new aircraft*
0
400
800
1,200
1,000
600
200
1,400
Single-aisle
& small jet
freighters
Small
twin-aisle
& regional
freighters
Intermediate
twin-aisle &
long-range
freighters
Large
aircraft &
large
freighters
% value:
571
19%
482
15%
819
27%39%
1,206
US$ (billions)
Air transport
to employ millions
and contribute
billions in next
20 years

Top ten countries (2009-2028)
1 United States
2 People’s Republic of China
3 United Kingdom
4 Germany
5 India
6 Russia
7 Ireland
8 Australia
9 Japan
10 Brazil
Passenger aircraft demand
5,096
3,272
1,229
1,175
1,093
1,004
615
551
548
542
United States
People’s Republic of China
United Kingdom
India
Germany
Japan
UAE
Russia
Singapore
Australia
By US$ value (billions)
450.3
439.5
154.0
141.5
141.4
114.2
98.2
89.9
79.3
74.2
New and recycled passenger aircraft >100 seats (excluding freighters)
Total new deliveries by region
2019-2028
2,458
% of world
deliveries
23%
North America
2009-2018
2,993
2019-2028
766
% of world
deliveries
7%
Latin America
2009-2018
892
2019-2028
3,949
% of world
deliveries
31%
Asia-Pacific
2009-2018
3,723
2019-2028
455
% of world
deliveries
4%
Africa
2009-2018
474
2019-2028
689
% of world
deliveries
6%
Middle East
2009-2018
730
2019-2028
447
% of world
deliveries
4%
CIS
2008-2018
454
2019-2028
3,192
% of world
deliveries
25%
Europe
2009-2018
2,876
Passenger aircraft >100 seats (excluding freighters)

Aviation growth :
more than just
While much has been discussed about the environmen-
tal impact of aviation, its 2% contribution to man-made
emissions and the fact that it will contribute up to 3%
by 2050(1)
, little has been said about the socio-economic
Real benefits for real people
Aviation plays an important role in today’s world,
supporting social and economic development in both
emerging and established nations.
While the impact of the aviation industry and its supply
chain is considerable in itself, the indirect benefits are
even more significant, as air transport facilitates growth
for many other industries around the world; delivering
real benefits for real people that can be measured in
economic output, jobs, and the wealth and prosperity it
brings to communities and individuals.
For example, by 2026 it is estimated that the air trans-
port industry will directly contribute around 8.5 million
jobs and US$1 trillion to the world economy. Taking into
account the indirect and induced contributions, the air
transport industry is expected to contribute around 23
million jobs and US$2.6 trillion. Adding the contribution
of the air transport industry to tourism raises the contri-
bution of the air transport sector to more than 50 million
jobs in 2026 and to around US$3.6 trillion of GDP.
Beyond this there is a wide range of benefits that are just
as tangible but are harder to quantify, which magnify the
immediate social and economic impact considerably.
Broadly speaking, this can be seen in terms of:
Trade: offering access to more lucrative and geographi-
cally disparate markets;
Investment: facilitating internationalisation and providing
access to skills and resources,
Productivity: stimulating and encouraging both competi-
tion, innovation and greater efficiency,
And tourism: facilitating a commercial exchange between
travellers and regions where economic growth could
otherwise be limited, as well providing essential funding
and incentives for the protection of biodiversity.
benefits the industry brings or the role it plays in preser-
ving biodiversity through dependant activities, which can
actually help reduce overall man-made CO2 emissions.
(1) United Nations Inter-governmental Panel on Climate Change (UN IPCC).
Balancing benefits and costs

aircraft
Trade is an important element of economic growth,
which leads to better living standards, and 35% of world
trade by value is transported by air.
For many developing countries, air transport provides an
essential link to wealthier markets. Research by the
International Trade Centre (ITC) on the impact of banning
air freighted organic produce to the UK in response to
environmental concerns showed that some 79% of such
imports are from poorer countries of the world, including
Kenya, Ghana and Zambia. And according to the UK’s
Department for International Development (DFID)
"Almost a million African farmers and their families rely
on the fruit and vegetable trade with the UK...this is an
export trade success story … and it’s one of the reasons
why African economies are growing around 5%”. In fact
the UK trade alone injects over $200 million into rural
African economies each year, while accounting for just
0.2% of UK’s carbon emissions.
As manufacturing in developing nations evolves and the
value of the goods produced increases, so too does the
use of air transport. For example, 40% of high-tech
sales are dependent on air transport.
Since World War II, the reduction of trade barriers has seen
global trade increase more than 20-fold and world incomes
more than 6-fold. Aviation enables easier, more global trade
and highlights the need to reduce such barriers even fur-
ther, with improvements in shipping times (both air and sea)
adding value equivalent to reducing trade tariffs from 20%
to 5.5% between 1950 and 1998. In addition, the speed
of transportation, for which aviation cannot be surpassed,
is an important determinant for entering an export market
and for the volume of trade that can be achieved. It has
been estimated that one-day saved in shipping time
globally is worth more than US$100 billion and a 20-day
shipping time is equivilent to slapping a 16% tariff on
imports; in this case, time quite literally is money, with avia-
tion key to future timesaving.
The express delivery industry provides fast, reliable,
traceable door-to-door delivery of shipments. Aviation is
critical to express delivery as it allows the industry to
operate longer domestic or international routes and
deliver goods to places where alternative transport links
are not as good.
Oxford Economics estimates show that in 2005 the
express delivery industry supported 2.65 million jobs
worldwide. However, the impact of the industry extends
beyond this, through its effect on stimulating international
trade. The speed of express delivery enables international
transportation of perishable goods, e.g. pharmaceuticals,
fruit, flowers etc. Reliability of delivery meanwhile encou-
rages and facilitates international ties between customers
and suppliers. Express delivery is crucial to ‘just-in-time’
production and repair, allowing customers to get sub-
components or spare parts quickly and at short notice,
potentially sourcing them from overseas. On a macroeco-
nomic level, the express industry stimulates international
trade by encouraging the specialisation of production in
different countries.
Surveys of companies around the world confirm the
importance of express delivery. A survey in Italy found that
without guaranteed international next-day delivery, about
7% of Italian firms would possibly have to relocate some
of their operations to another country. In a survey of
Chinese companies three-quarters reported that custo-
mers were demanding faster and more reliable delivery of
products. The express delivery industry is therefore crucial
to Chinese exports. Likewise, 76% of businesses in the
City of London consider express parcel services critical or
important to the smooth running of their operations.
Demand for air travel
The express delivery industry:
how a speedy high flyer delivers the
goods
Benefiting
trade

Air transport is one of the key links between countries
and their major “hub” cities, helping to create and sus-
tain international markets, investment and business.
As a clear indication of this, when top companies were
recently asked to rank the cities that are the most
desirable locations for doing business, the highest
ranked also ranked top for the quality of air transport.
In another survey, of over 600 companies from 5 coun-
tries carried out by IATA, 63% of firms stated that air
transport networks are “vital” or “very important” for
investment decisions. If the network was constrained,
30% said it would be highly likely they would invest less.
Many companies search the world before deciding
where to site new research and development activities.
India, particularly Bangalore, is fast becoming recogni-
sed in the IT world as a suitable venue, with companies
such as Siemens, Samsung, Dell, GM, HP and IBM all
establishing themselves in the region. Not only would
this activity be difficult without air transport, but without
it the search may never have reached Bangalore in the
first place.
This trend of investment in air transport subsequently
generating investment in a diverse range of other indus-
tries is particularly visible at the new Dube Trade Port
in South Africa (see panel opposite).
Benefiting investment
Good business locations
need good air transport
links
External transport links rank
Business location rank
35
0
5
10
15
20
25
30
35
30 25 20 15 10 5 0
Source: European cities monitor 2007,
Cushman & Wakefield, Airbus
Stockholm
Budapest
Athens
Helsinki
London
Paris
Frankfurt

As well as its direct impact on GDP, the DTP is designed
to have catalytic benefits in terms of local economic
empowerment, competitiveness and skills development.
And, given the tourism ambitions of the project, related
efforts to eradicate malaria from destination areas have
delivered significant health benefits to the local popula-
tion.
It is hoped that South Africa has almost reached the day
when the country’s trade and tourism prospects will
be freed of the curse of malaria. South Africa's natural
resources make it an ideal destination for many internatio-
nal visitors. Its competitive tourism advantages are many:
accessible wildlife, varied ecosystems, impressive sce-
nery, unspoiled wilderness, diverse cultures, temperate
sunny climate, and the absence of 'jet lag' from Europe.
In addition, the KwaZulu Natal region boasts unique
archaeological sites and battlefields, the availability of
excellent conference, exhibition and sporting facilities.
To take advantage of such attractions, the building of
King Shaka International Airport at DTP and the potential
it offers for direct flights from key markets, is a central
part of the strategy to increase the flow of tourists to a
region. The FIFA World Cup in 2010 provides a major
incentive to have construction complete and the airport
operational.
Thanks to the success of regional anti-malaria cam-
paigns, the local KwaZulu Natal authorities now believe
they have taken large strides to guarantee visitors immu-
nity from the age-old disease that has long blighted
the continent of Africa.
Airport development as an integral part of social and economic development
initiatives in South Africa
The Dube TradePort (DTP) is a strategic and critical infra-
structure investment, which aims to serve as a major
catalyst for economic growth in KwaZulu-Natal and
South Africa. The development demonstrates the cen-
tral role that improved air services play in facilitating sus-
tainable economic growth, widening the development
options available and spreading prosperity. The creation
of a new airport will be integral to improvements in pro-
duction processes, trade stimulation, foreign direct
investment, natural habitat preservation and the deve-
lopment of tourism.
A new fully-integrated international passenger and
freight airport is to be constructed as part of the overall
DTP development initiative. Included in the plans is a
trade zone that will be linked to the airport’s freight
facility, providing scheduled space for the import and
export of high-value goods through KwaZulu-Natal. By
providing state-of-the-art air freight handling facilities,
comprising a cargo terminal and a perishables centre,
the trade zone is seeking to attract industries such as
motor components, electronics, clothing and textiles,
perishables and value-added logistics, which are criti-
cally dependent on specialised and scheduled air cargo
that guarantees timely delivery.
The plans also include an integrated agricultural export
zone. This will include land and facilities for the cultivation
and export of high-value farming products, providing
opportunities for exporters of high-yield, time-
sensitive, air-freighted horticultural produce and will
include pre-harvest and post-harvest facilities required by
on-site producers and growers from surrounding areas.

Benefiting
productivity & efficiency
Cork Airport Business Park: symbol
of transition from agriculture to hi-tech
Since the early 1990s, the Irish economy has experienced
growth at an extremely accelerated pace. The 1980s had
seen many leave the island in search of employment, as
an economy built on a strong agricultural sector stagna-
ted. Much of the success of the Celtic Tiger economic
boom around the turn of the century can be attributed to
various policies implemented specifically to attract foreign
companies. These policies included low corporation tax
rates and an emphasis on high-quality education.
These national policies have been complemented by local
initiatives that have made some regions of the country
particularly attractive for foreign investors. The business
park set up next to the city of Cork is one such example.
The Cork Airport Business Park located just two minutes
from Cork airport was set up in 1998. By 2005, the park
had attracted many international companies employing
around 1,800 people. Building on this success, the Irish
government launched a new phase, which would nearly
double the park’s office capacity and provide jobs for
an extra 1,500 people. The business park hosts tenants
such as Pfizer, Marriot, Motorola and Amazon.
The Cork Airport Business Park has contributed to the
local economy’s diversification away from declining agri-
From the aforementioned IATA survey, 80% of busi-
nesses also said that air transport was important to
efficiency and 50% thought it was vital. More than two
thirds believed that air transport enabled them to reach
greater economies of scale and improve efficiency, while
over half were convinced that it reduced costs for their
businesses.
Opening markets to international competition also
drives innovation, which typically leads to efficiency
improvements. Over a quarter of companies believe
that innovation and investment in research and develop-
ment would probably be badly affected if air transport
services were constrained(2)
.
Innovation has long been at the heart of the aviation
industry itself. In 2006, 39 aerospace and defence com-
panies undertook US$19.9 billion of R&D expenditure.
Successful innovations in aviation have a much wider
impact than just the industry itself. For example, the
social return on aerospace R&D spend is estimated to
be 70%, compared with 50% for manufacturing as a
whole(3)
. In other words, once it matures, a typical invest-
ment of US$100 million in R&D by the aerospace sector
adds US$70 million to the level of GDP year-after-year.
Two recent studies, by IATA and InterVistas, have
attempted to quantify the beneficial impact of air trans-
port on productivity. Both found that an increase in avia-
tion connectivity typically leads to a sizable improvement
in labour productivity. To capitalise on such efficiency
gains, some cities and regions have developed business
parks next to airports. These typically attract highly
productive companies that benefit from the exchange
of ideas and skilled personnel, as well as the opportunity
to do business together. One example of this is in Cork,
in Ireland.
(2) The Economic and Social Benefits of Air Transport 2008, ATAG
(3) Assessing the Economic Impact of Aerospace Research & Development,
Oxford Economics, May 2006

With 40% of international visitors travelling by air, avia-
tion is indispensable to the growth and sustainability of
tourism. The industry contributes almost 10% of the
world’s GDP and employs nearly 80 million people, ran-
ging from over 6% of total employment in Africa to over
10% in the US. Because tourism is the primary source
of economic growth for many areas, some governments
place it at the centre of their country’s growth strategies,
which involves the development and promotion of flight
connections.
In particular, areas with fragile ecosystems, which are
often home to endangered species and offer few alter-
natives for locals who need to support their families,
eco-tourism provides a growing source of funding,
incentives and options. In Costa Rica for example, the
promotion of eco-tourism started in the 1980s. Since
then, international tourism has increased six-fold to
US$2 billion, with nearly 1.9 million international visitors.
In 2005 tourism contributed 7.9% of GDP, 13% of jobs,
and 22.3% of foreign exchange earnings. But more
importantly, it has also helped to pay for the preservation
of the country’s national parks.
In 2007, the spending of foreign visitors arriving by air
directly supported more than eight million tourism jobs.
Taking into account indirect and induced jobs, air tou-
rism accounted for more than 18 million jobs.
culture to the fast growing pharmaceutical and IT sectors,
two sectors that rely heavily on air transport.
Since 2000, growth of output in Cork has averaged 5.5%,
outperforming the fast growth in the Irish economy over
that period by 0.5% per annum. Moreover output per
head is nearly 30% above the Irish average. In tandem
with this fast growth the proportion of the working-age
population that is economically active has risen from
approximately 60% in the mid-1980s to 72% today. The
number of jobs has increased by 83% over the same
period, ensuring that the benefits of this growth have been
widely spread throughout the community.
Based on the key metrics of share of regional GDP,
growth in value added and productivity, Cork ranks highly
in globally successful IT and Life Science locations.
Among the key factors that have attracted these know-
ledge-intensive industries to Cork are accessibility, R&D
investment, tertiary education and quality universities.
Source: Cork Airport Business Park; Regional Forecasts (a division of Oxford
Economics); ‘Regions as Technology and Life Science Locations’, BAK Basel
Economics Forum 2006
Benefiting
tourism

Airborne tourists provide a path to jobs and development
- Morocco’s Vision 2010
The country’s location at the nexus between Africa and
Europe has contributed to a rich brew of cultural
influences, incorporating influences as diverse as those
of the Phoenicians, the Berbers and the Spanish.
Continuing this rich tradition of inclusiveness is the
Festival of World Sacred Music (Festival des Musiques
Sacrées du Monde). Each June sees performers from
every corner of the Earth fly into Morocco for a week of
artistic performance in Fès, the country’s ancient holy
city. The festival represents the spiritual heart of Islam –
peaceful, pluralistic, generous and joyous, with the aim
of honouring all the world's spiritual traditions and
dissolving musical boundaries.
The Moroccan government has been keen to promote
the country’s rich cultural heritage and to encourage cul-
tural exchange which will bring more visitors through
Morocco’s airports. The recent recording of part of U2’s
latest CD in Fès has been a timely boost to these efforts.
It is hoped that the attendant media interest in the
band’s choice of recording venue will rekindle Morocco’s
reputation as a favourite artistic retreat in the 1950s and
60s, when artists such as the Rolling Stones were regu-
lar visitors. The legendary rock group returned to
Morocco in 1989 to record with the country’s most
popular traditional artists, the Master Musicians of
Jajouka, an all-male guild trained from childhood.
Fès lies inland, 200km northeast of Casablanca. It is the
oldest of Morocco’s imperial cities and commonly reco-
gnised as the spiritual, cultural and intellectual capital of
Morocco. It is home to Fès El Bali, the largest medina in
Morocco. Set within almost 3,000 acres, the ancient site
has been declared a UN World Heritage Site, and has
been extensively renovated as part of the Vision 2010
plan. The medina is a maze of mosques, food markets
and bazaars. Noted for its quality craftsmanship, Fès is
famous for metalwork, rugs and leather goods.
Despite its status Fès El Bali had become run down and
its tourist potential unexploited. Accordingly, the regio-
nal plan calls for establishing Fès as a tourist destination.
The plan aims to promote the city as a “Lively Millennial
Museum, based on its authenticity as the only remaining
place in the world where daily lives still reflect an ancient
way of life and its associated culture and art.”
The tourism development plans include:
• the creation of additional accommodation in the
Medina by converting houses with high historical value
and Fondouks into high-quality guest houses
• the conversion of Fondouks into theme-based cafés or
exhibition spaces
• the creation of a religious arts museum
• the rehabilitation of two pilot neighbourhoods, inclu-
ding restoration of the original Medina walls
• the opening of local handicraft industries to tourist
access, and the facilitation of electronic payment and
overseas shipping
• the development of tourism in the hinterland of Fès, to
allow these rural areas to benefit from the city’s role as a
tourist hub.
Crucially for Fès, the realisation of the city’s tourist poten-
tial and its successful entry into the European city-break
market depends on the introduction of point-to-point
flights from the major cities of Morocco’s key overseas
markets. This will involve more flights on existing routes
from France and the UK, and the introduction of new
routes, from untapped sources such as Barcelona,
Madrid, Milan and Rome.
To realise this ambition it is anticipated that investments
totalling 3 billion dirhams (US$350 million) will be required
over the ten years to 2015. In turn this is expected to
create an additional 4,500 beds in tourist accommoda-
tion, annual revenues of 1.26 dirhams (US$150 million)
and an additional 13,500 jobs in and around Fès.
Source:
http://www.tourisme.gov.ma/docspdf/PDRT/PDRT%20F%C3%A8s/Brochure-
An.pdf

Today, many of these benefits are so obvious and so
integrated into the social and economic fabric of our
society that they are, in many ways, taken for granted.
However, aviation has never been so closely scrutinised
nor had its future growth so acutely threatened from so
many sides.
So consider this: should growth in passenger and cargo
traffic be one percentage point lower than forecast pre-
viously:
Almost 1.5 million jobs would be lost within the air trans-
port sector itself, some 3.8 million when including the
indirect and induced effects, and over 6 million when
adding the impact on tourism. That would represent
0.2% of world employment in 2026, including around
2 million in Asia-Pacific, 1.5 million in each of Europe
and North America, 400-500 thousand in each of Africa
and Latin America and more than 200,000 in the Middle
East.
The direct, indirect and induced contribution of the air
transport sector to world GDP would be US$440 billion
lower, with an additional US$164 billion lost through
lower tourism activity. Therefore, in total air transport
would contribute 0.6% less to world GDP in 2026 than
in the base case.
That’s a lot to take for granted.
But what if….

The overall long-term effects of the 2008/2009 financial
crisis are expected to be more pronounced on network
evolution than on future passenger demand growth.
In the coming years, the routes that passengers actually
fly will depend not only on the route they want to take,
but also on what the airlines can profitably offer in a
challenging market environment.
In the past, a significant part of growth allocation was
attributed to network development. The number of non-
stop routes on the three main long-haul flows (trans-
Atlantic, Europe-Asia and trans-Pacific) has doubled
since 1987 and now represents 70% of long-haul traffic.
Strong air travel growth, globalisation of economies, air
travel deregulation and technology have allowed more
connectivity between cities. New routes from hubs also
played a major role in this development. In fact, hubs
have been crucial, not only because few long-haul city
pairs could survive without the connecting traffic, but
also because they are often the destinations people
want to fly to. Consequently, some 77% of long-haul
demand and 73% of long-haul routes involve at least
one of 32 global hub cities.
Previous network development and the natural concen-
tration of demand have created a more mature net-
work, with few significant non-stop markets left to be
opened on the three main long-haul flows.
After 2001, traffic recovered relatively quickly when
compared to the recovery in the number of routes drop-
ped in that period.
In 2008, the number of airline routes has only increased
by 15 compared to 2007 on the three main long-haul
flows, despite the new trans-Atlantic open skies agree-
ment that came into effect that year.
One such constraint today, and more so in the future,
is the effect of airline alliance and consolidation, which
artificially influences some potential route openings,
therefore, helping to limit the absolute number of non-
stop routes.
Even with such constraints, Airbus forecasts the need
for 400 net additional routes on the three main long-
haul flows by 2028. However, their impact on the ove-
rall network will have an ever-decreasing effect, as their
importance in traffic terms also reduces, and as growth
will be increasingly concentrated on the existing routes,
particularly on the hub-to-hub routes.
Introduction
The Future :
a greater concentra
and traffic

tion of demand
Passengers
fly further
A long-haul network continuing to be dominated
by a few cities
Source: UN, Thomas Brinkhoff: City Population, Airbus
5-10 million 10-15 million 15-20 million 20-25 million >25 millionUrban population:
1985 2015
0
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
400
1000
1400
Airline routes*
2028
200
800
600
1800
1200
*Flows between (Europe/Africa/MiddleEast) - (Americas) - (Asia/PRC/Indian sub/Japan/Oceania). (70% of the world long haul RPKs).
Airline route : Airport pair operated non stop by a specific airline.
Source: Airbus GMF, OAG
551
1987
1,158
2007 +388
routes
Forecast
1,546
2028
Long-haul route network maturation

The trans-Atlantic flows will have
the most route openings
Historically, the choice of aircraft for a given operation
was limited by the range capacity and of the products
on offer. However, today there are aircraft with a wide
range of capacities but with similar long-range capabi-
lity, so it is possible to make fleet decisions based
purely on demand and growth expectations.
Growth allocation directly impacts generic aircraft
demand in terms of variables such as size and range.
Airbus has developed a unique process that uses real
and future passenger demand to determine the most
likely airline operations on a route by route basis.
The process starts with future growth being calculated
down to the origin and destination of passengers
(O&D) and the basic principles are as follows:
• Each O&D has a specific growth rate based on either
the size of the economy in a metropolitan area
(known as the gross metropolitan product), if this
data is available, or using a set of market typologies
such as urban population growth, historical local
traffic growth, the presence of low costs airlines etc.
• The routings of each O&D are then calculated to
creating the optimum “virtual network of routes”.
• Matching the “virtual network” to the “actual net-
work” indicates the values of many parameters
influencing the passenger’s choice of routes.
• New constraints are added/removed (technology,
regulations, new business models, etc.)
• New airline routes are incorporated to test their future
feasibility and to identify from which existing routes
they could attract traffic. Dropped routes are also
incorporated.
• The future routings of all O&Ds are consolidated, with
differentiation between those passengers connecting
and travelling point-to-point.
• The total traffic growth on each individual route is
then calculated, making it possible to estimate fleet
requirements.
Translating growth into aircraft demand:
Split of additional routes on the 3 main long-haul flows
Europe-USA 79
Europe-PRC 38
Europe-S. America 35
Middle-USA 22
PRC-USA 39
Asia-USA 17
Europe-lndian Sub 29
Indian Sub-USA 15
Asia-Europe 21
Canada-Europe 19
Other 74
Trans-Atlantic
Europe-Asia
Trans-Pacific
Source: Airbus

All three of the main long-haul flows are expected to expe-
rience solid and sustained future traffic growth. In particular,
deregulation is expected to drive Latin American growth on
the trans-Atlantic flow; fast growing economies in Asia for
the Europe-Asia flow and the trans-Pacific flows; and new
emerging sub-flows from/to the Middle East or Africa.
The way traffic is allocated on each of these flows will
directly impact demand and, more specifically, the aircraft
capabilities required by airlines, including the number of
seats.
While different in many aspects, the three flows tend to
share the same basic long-haul principles:
• Most of the 32 global hub cities are already intercon-
nected with non-stop flights, the “big points”. These
routings are also very often those adding significant
value to an airlines network.
• Almost all routes are linked from, to or between these
32 cities.
• For historical, geographical and social reasons the more
distant two regions are, the more concentrated the
demand tends to be between connecting cities in each
region.
Regional network development
• Frequencies are limited by time windows, passenger
preferences, airport congestion, noise curfews, over-
night fees.
• Largely due to the principles mentioned above, the
longer the route, the larger the aircraft tends to be.
• Average route length is increasing as demand has
emerged from distant destinations. People are flying
further, simply because they want to visit places that
are further away.
• The volume of organic growth (i.e. traffic added to an
existing route) is higher on hub-to-hub routes thanks
to the dynamism of the 32 global hub cities and the
growth of the connecting traffic.
• The most common source of totally new city pairs is
between hubs and secondary cities. These are typi-
cally operated by only one airline, therefore, once the
daily flight is achieved, the airline can move to a larger
aircraft to accommodate the additional organic
growth.
• Routes between secondary cities, or “transverse”
routes are marginal. Many of these markets are
charter routes with no need for a daily flight.
Trans-Atlantic network: % of passengers
flying new airline routes in twenty years
0%
10%
% of passengers
Europe-US
Canada-Europe
CentralAmerica-Europe
Canada-CentralEurope
CentralEurope-US
Canada-NorthAfrica
Europe-S.America
Africa-US
NorthAfrica-US
20%
30%
40%
50%
60%
70%
80%
90%
S.Africa-S.America
Middleeast-S.America
Canada-Middleeast
Middleeast-US
S.Africa-US
68%
of the traffic
Source: Airbus
The longer
the routes,
the larger
the aircraft

In the year to September 2008, 113 scheduled routes
of all sizes, (in terms of seats offered), were opened
across the overall transatlantic network, which
includes non-EU states, Africa and the Middle East
to/from Canada and Latin America. However, 106 of
all routes have been dropped.
It has been forecast that that there will be nearly 200
additional trans-Atlantic airline routes, 60% of which
will be between the North America and Western
Europe, in the next 20 years. However, most of the
growth will be allocated to existing routes, which are
expected to carry some 93% of the forecast traffic.
Dynamic growth in Latin America will create some
additional network opportunities, but will remain limited
due to the historical concentration of demand in
Europe and continuing consolidation among airlines.
As a result, 23 routes will carry more than 1,000 daily
passengers one way by 2028, compared to only two
routes today; making this a clear market for large
aircraft.
The trans-Atlantic
During recent years, smaller trans-Atlantic traffic flows
have quickly emerged. In 2000, only three regular
non-stop routes existed from the Middle East to the
Americas, but by 2008 there were 19 in operation. In
2028, more than 70% of the passengers flying from the
Middle East to the Americas will fly on routes not yet in
operation. This market will be ideal for large twin-aisle
aircraft such as the A350XWB and very large aircraft
like the A380.
Today 45% of trans-Atlantic passengers fly on 42 city
pairs with traffic exceeding 1,000 daily departing pas-
sengers. This number has steadily increased during the
past 30 years, despite the opening of many new non-
stop routes. As fewer new route opportunities remain on
the main flows, airlines consolidate and emerging flows
largely having demand concentrated in a few cities, a
larger proportion of the growth will be allocated to the
existing routes. Therefore, the number of “1,000 pas-
senger” routes will rise to 130 in 2028. Traffic on these
routes will be accommodated by an increase in both
aircraft frequencies and seat capacity.
Trans-atlantic: number of city
pairs with more than 1,000 daily
departing passengers
Number of city pairs
1977 1987
19
1997 2007
40
2017 2028
132
140
120
100
80
60
40
20
0
Source: Airbus

The long-haul market between Europe and Asia-Pacific,
which includes the Indian Subcontinent, China and
Japan, is the 2nd largest in terms of traffic (RPKs(4)
). Half
of the volume of passengers added in the last three
years were to China and India. High growth from China
and India will continue to create new network opportu-
nities, of which the majority will be new city pairs.
In China, there are currently very few non-stop routes
from and to secondary cities, but more are expected to
emerge by the end of the next decade as wealth
spreads and the country’s aviation network develops.
The high organic growth of these routes will result in a
high density of routes.
However, India’s network is more mature, with shorter
distances from Europe and traffic in new markets 30%
less dense than in China. This is consistent with average
long-haul trends, where the longer the route, the larger
non-stop markets.
Between Asia and Europe :
recent developments
Significant growth to and from Europe has also been
observed in some South Eastern Asian countries like
Vietnam, the Philippines and Malaysia. New direct
non-stop routes are expected from South East Asian
countries to the largest markets in Europe, although the
Middle Eastern hubs will capture a significant part of
the local traffic.
The market share of Middle Eastern hubs on the
Europe to Asia flow has continued to increase to
around 14%, depending on the season. Many of these
passengers are travelling from Europe to India and
other South East Asian countries, while China, Korea
and Japan remain relatively untapped. As the Middle
Eastern hub network expands to encompass more
direct routes to North East Asia, they will capture some
additional traffic.
(4) RPK: Revenue Passenger Kilometres
Europe-Asia: share of passengers transiting through
Middle East hubs by final Asian destination
40%20%0% 100%
Nepal
Maldives
Sri Lanka
Pakistan
Bangladesh
Philippines
Australia
Thailand
Malaysia
India
New Zealand
Indonesia
Singapore
Vietnam
China
Hong Kong
Republic of Korea
Japan
60% 80%
% of passengersTop Asian markets from Europe
Source: Airbus, GMF; IATA Paxis

Most of the growth is on hub-to-hub routes
Trans-Pacific network development will remain largely
dominated by the trunk routes linking major cities on
both sides of the ocean. This flow is characterised by
the high concentration of the demand to and from a few
Asian and American cities.
The share of routes linking global hub cities on both sides
of the Pacific (hub-to-hub routes) will remain at 70% of the
traffic by 2020. This is because three quarters of the
growth on existing routes will be on the current hub-to-
hub routes. Among the 28 new non-stop city pairs to be
opened by 2020, half will be driven by high growth in India
and China. The other half is mostly long-range routes to
South East Asia, which will be extremely sensitive to the
oil price.
Non-stop routes to and from secondary cities in China
are expected to mainly develop after 2020, but will not
represent more than 1% of trans-Pacific traffic by 2028
and will also be extremely dependent on oil price.
The Asian to Latin American flow is a fast developing mar-
ket with a few non-stop city pairs expected to be opened,
but most of the demand will continue to connect through
other regions due to range and costs.
One conundrum today is: “how can a passenger travel
from one side of the Pacific to the other without crossing
the Pacific?” The answer is to fly through Europe and the
Middle East. In Europe new connecting Asia-Americas
gates (e.g. Brussels) are being established by major car-
riers . In the Middle East, hubs have more direct services
to the Americas. For example, Dubai and its Asia-
Americas connecting traffic is expected to increase
14-fold by the year 2020. Although a staggering growth,
only specific parts in Asia will be impacted, with 90% of the
overall trans-Pacific demand still expected to fly on “actual”
trans-Pacific routes, rather than via connections.
Today’s trans-Pacific routes are dominated by interme-
diate twin-aisle and large widebody aircraft (90% of
the trans-Pacific RPKs). As almost three quarters of
the growth will be allocated to existing routes, that domi-
nation will continue, with an even greater emphasis
on this class of aircraft.
The trans-Pacific
18%
55%12%
15%
% of traffic added 2007-2020 on the trans-Pacific flows
Other routes
Hub-to-hub routes
Growth on existing city pairs
New city pairs
Source: Airbus

Higher fuel prices, stronger hubs
The long-term effects of crisis are expected to be more
pronounced on network evolution than on overall pas-
senger demand growth. Long-haul network develop-
ment is also particularly sensitive to the increases in fuel
price. Therefore, it is important to consider alternative
scenarios linked to these variables. For example, analy-
sis shows that on the trans-Pacific the total number of
non-stop city pairs in 2020 would be similar to today’s
levels with an oil price of US$150 per barrel (real terms),
while the traffic would still grow (with an average growth
rate still exceeding 4% per year). However, very long thin
routes would be expensive to operate, with the costs
and risks associated with opening new city pairs higher.
The acceleration of airline consolidation would also have
a major effect on the forecast for network evolution.
Airbus anticipates that this trend will continue within
some major regions and across regions, as say restric-
tions on foreign ownership is reduced. Large airline hubs
will benefit from this consolidation, even when airlines
adopt a multi-hub structure. However, while big routes
would remain non-stop, routes from absorbed airlines to
secondary destinations are more likely to be operated
from the main airline hub.
The combined effects of higher than expected energy
prices and airline consolidation, will be less new non-
stop city pairs, resulting in more demand which will still
continue to connect. For example, with oil costing
US$100 per barrel in 2020, 45% of traffic from Europe
to Asia would still connect even with new non-stop
routes. With an oil price of US$150, the overall flow traf-
fic would be down 12%, but the share of connecting
traffic would increase to 52% (+7pt) making the routes
with a higher proportion of connecting traffic more resi-
lient to higher oil price.

People want and
World air traffic growth is closely correlated
to economic growth
0%
1%
0%
2%
3%
4%
5%
6%
7%
-5%
10%
5%
20%
30%
Air traffic growth (%) Real GDP growth (%)
1972
1974
25%
15%
-10%
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008E
Air Traffic
GDP
Source: Global Insight, ICAO, Airbus
Economic developments can be measured by several
macro economic variables including Gross Domestic
Product (GDP), exports, imports, unemployment rate,
inflation, private consumption and disposable personal
income. For each edition of the GMF and each traffic
flow, the final permutation of independent variables that
are selected follows the testing and statistical evalua-
tion of numerous possible combinations. Most often for
developing and matured markets, the statistical model
that best fits the historical traffic provides the best
explanation of future trends and is, therefore, the one
selected for use in Airbus’ aircraft demand model.
While the current downturn has highlighted the impor-
tance of GDP as an explanatory variable in traffic fore-
casting, in some market segments, classic econometric
modelling is not sufficient to adequately forecast traffic
growth and the use of hybrid models is required. For
example, in Asia, the development of Low-Cost Carriers
(LCCs) is driven by the pace and timing of deregulation
within each country and of liberalisation between others.
In Mexico for example, a portion of air traffic growth
depends on the number of people switching from the
popular bus network to air transport, which is a conse-
quence of lower airfares and improved journey times.
In the maturing LCC markets of North America and
Western Europe, the LCC growth will ultimately depend
on the number and size of new routes still to be opened,
on an economic and sustainable basis. The growth in
India is a good example of this, because although
undoubtedly influenced by economic, trade and popula-
tion growth, it has also benefited from increased access
to air transportation, either through new destinations or
simply through greater affordability as a result of deregu-
lation and competition. In some cases these develop-
ments are the result of actions taken by regulators and
governments keen to take advantage of the benefits of
air transportation.
Airbus is often asked how variations in underlying
factors, such as the oil price, a recession or accelerated
market liberalisation, can affect traffic growth and
demand for air travel. To understand the impact such
variations could have, the forecast uses econometric or
hybrid models to conduct sensitivity analysis around our
baseline traffic forecast in a more systematic way.
Key drivers of traffic growth

Traffic forecast
need to fly
The Airbus traffic forecast process is based on four
major building blocks: detailed market research, suitable
market segmentation, targeted use of econometrics and
detailed network development analysis. The latter being
particularly important, as it provides a systematic view
of how the route structure of the world’s air transport
system will evolve, based on true passenger origins
and destinations. The full benefits of this approach are
particularly clear when the aviation market moves
through its now characteristic cyclical variations, such as
the drop in passenger demand resulting from the most
recent economic downturn.
The 2009 GMF analyses a total of 156 distinct domes-
tic, regional and intercontinental passenger sub-mar-
kets, segmented according to their degree of maturity
and specific characteristics over time. Airbus market
research examines the fundamental drivers of transpor-
tation including future consumer behaviour and expecta-
tions, the pace of liberalisation, modal competition,
the growing importance of emerging markets and
constraints, such as the influence of airport congestion.
The market is segmented by airline business model,
region and traffic flow, which enables the precise
circumstances and drivers prevailing on each segment
to be fully considered. Econometric data is then used to
quantify future air travel demand based on economic,
operational and structural variables.
Airbus traffic forecast:
from research to network development
• Deregulation/liberalisation
• Emerging markets
• Modal competition
• Low-cost penetration
• Consumer/travel surveys
• Regional/low-cost/charter
• Start-up/network
• Integrators
• Traffic flows
• Domestic/international
• Economics
• Tourism
• Fuel price
• Yields
• Trade/value of goods
• Aircraft economics
• Airline operation economics
• Origin-destination demand
• Demographics
• Geopolitics
Market
research
Market
segmentation
Econometrics Network
development
Forecast methodology

Cyclical downturns have almost always been linked to
economic cycles, but at times this has also been exa-
cerbated by other factors, most notably in the last ten
years with 9/11 and SARS.
This time, both the global economy and consumer
confidence have been severely affected by the events in
the world’s banking community and stock markets,
including the knock-on effects of the restriction of
finance – the so called “credit crunch”. This creates
problems for consumers, airlines and aircraft manufac-
turers alike. However, although these periods invariably
lead to extremely difficult trading conditions - including
a number of airline bankruptcies, poor financial results
for some and some very difficult decisions for most -
historically the industry has managed these periods
proactively, becoming more efficient and recovering
to enjoy the benefits when the market rebounds.
Air travel has proved to be resilient to external shocks
Long-term fundamentals
0
1968 1973 1978 19881983 1993 2003 20081998
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
World annual traffic
(RPKs - trillions)
5.0
Source: ICAO, Airbus
Oil Crisis Oil Crisis Gulf Crisis
Asian
Crisis
WTC
Attack SARS
Financial
Crisis
+38%
It is not yet clear how severe the current cycle will be or
what shape it will take, however, previous cycles show
that the deeper the recession, the stronger the subse-
quent recovery. During the last two cycles, the drop off
in traffic and passenger demand was steep, creating
the only two periods of negative traffic growth ever
witnessed. The steep recovery after the last cycle saw
almost 14% growth in one year.

Traffic forecast
While the current cycle is clearly difficult for everyone in
the industry, it has the global economic slowdown at its
heart and has not been aggravated by any other “exo-
genous events”. In this cycle, perception has played a
significant role, as businesses and passengers put tra-
vel plans on hold awaiting a clearer picture of where the
turning point of this cycle would come. As the serious-
ness of this cycle became apparent, however, the
world’s major economic powers were very quick to res-
pond, with unprecedented economic stimulus plans,
totalling thousands of billions of dollars. While 2009 is
expected to be the worst in terms of world GDP growth
for many decades, economies are widely expected to
gradually begin to recover late in the year, with more
meaningful improvement in 2010 and 2011 forecast.
These developments are expected to form the basis of
recovery in passenger and freight traffic.
As seen in the past, this typical response of the market
to such events is possible only due the enormous
underlying demand, the fact that people want and need
to fly.
remain strong
The deeper the downturn
the stronger the recovery
Potential for upside
from meaningful rescue
and economic stimulus
plans
Rescue Plan Economic
Stimulus Plan
$700 billion
$320 billion
N/A
$650 billion
$656 billion
$468 billion
$787 billion
$150 billion
$586 billion
$109 billion
$52 billion
$39 billion
-4%
0%
-2%
4%
2%
8%
6%
10%
14%
12%
Air traffic growth (%)
Year 1 Year 2 Year 3 Year 4 Year 5
Source: ICAO, Airbus Market Research and Forecast
00 - 01 - 02 - 03 - 04
90 - 91 - 92 - 93 - 94
79 - 80 - 81 - 82 - 83
US
Japan
China
Germany
UK
France
Source: Airbus

Although inversely linked to traffic growth, airline yields
have traditionally been one of the main drivers for air
transportation growth, largely driven by fares. In other
words, higher yields generally reduce passenger
demand and for obvious reasons are also closely linked
to the profitability of airlines. Analysis has shown that a
1% increase in airfares will result in a 0.5 to 1% decrease
in air travel demand, with this variation largely linked to
regional markets and passenger class. Conversely, a 1%
increase in GDP results in a 1% to 2.5% increase in air
travel demand.
Like any industry, airlines seek to manage downturns by
balancing supply and demand. However, many opera-
tors initially reduce capacity because, as explained
above, using pricing alone to stimulate demand has pro-
ven to be financially damaging in the past. In fact, during
the early stages of the current cycle a significant portion
of airlines particularly in the US chose to reduce capacity
even before demand started to turn significantly down-
wards. A move designed in part to protect yields and
revenues and reduce costs, but also later having
the effect of more closely matching capacity to demand
and protecting load factors.
Seats, yields and costs continue
to influence traffic
Air traffic demand is also correlated to air fares
-10%
1971
1973
1975
1977
1979
1981
1983
1985
1989
1987
1991
1993
1995
1997
1999
2001
2003
2005
2007
5%
15%
US domestic Air traffic growth (%) US domestic Air fare growth (%)
20%
0%
-5%
10%
Air traffic
Air Fare*
Source: ATA, Airbus
* Airline unit revenue expressed in average passenger revenue per kilometer flown (airline yield) as a proxy of air fares
-10%
-5%
-0%
5%
10%
15%
20%
25%
30%
35%
-15%

Traffic forecast
Although all downturns have a number of similarities,
there is invariably always something that makes each
one a little different. This time one difference was the fact
that airline costs had been strained by exceptionally high
price of oil. But ironically the same financial crisis that
weakened demand for air traffic also reduced demand
for oil, thereby bringing fuel prices to more manageable
levels. In May 2008, world economic growth for 2009
was expected to be around 3.3%, with oil costs around
US$140 per barrel at that time. Early in 2009, economic
forecasts for the year show expected negative world
growth, with oil prices ranging around US$50 per barrel
at that time. It is assumed that as economies and
demand recover, then so too will the price of oil and
other commodities. Forecasts suggest that this will not
be to the levels witnessed in 2008, but enough will be to
make the need for the most fuel and eco-efficient aircraft
types, once again self-evident.
Elasticity for air travel demand
1% increase in air fares
0.5 to 1% decrease in air
travel demand
(elasticity for air fares is -0.5 to -1)
-0.5 Domestic China
China - Japan
Domestic US
US-W. Europe
Domestic Europe-1
1% increase in GDP
1.0 to 2.5% increase
in air travel demand
(elasticity for GDP is +1.0 to +2.5)
+2.5 Domestic China
China - Japan
Domestic US
US-W. Europe
Domestic Europe+1

The 2.8 billion people living in Brazil, Russia, India and
China (BRIC nations) represented 36% of world GDP
growth and 10% of all consumer spending in 2008.
Over the next 20 years these nations will grow to repre-
sent 22% of world GDP and 19% of consumer spen-
ding, making them increasingly important in terms of air
transport.
Today, the BRIC nations’ economies and industries are
still closely entwined with more developed countries.
Therefore, the slow down in demand from the US and
Europe has had a negative effect on these emerging
economies and on the short-term development of their
air transport industry. However, there is little doubt that
strong performance in recent years, coupled with large
trade surpluses and foreign exchange reserves, meant
these emerging economies were in a better position
than many to boost spending, encourage consumer
demand and withstand the worst effects of the current
downturn.
In future, it is also likely that the resilience of BRIC
nations will further increase with each successive eco-
nomic cycle. The national savings rate in China is around
50% of GDP, up from 38% in 2000, and there is clearly
huge potential for consumer spending growth as China’s
economy and population develop. This offers real poten-
tial as a counter balance to difficulties such as the recent
cuts in consumer confidence and spending in more
mature economies. In China, consumer spending is
expected to increase by 8.4% annually over next 20
years to 43% of GDP, while Indian consumer spending
is expected to grow by 6.9% per year to 60% over the
same period, all helping to strengthen their economies
and offset the effects of future economic downturns.
Cyclical downturns no match
for underlying demand
Growing importance of consumption in BRIC countries
30%
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
40%
50%
60%
Private consumption as a share of GDP (%)
70%
History Forecast
Western Economies
World
BRIC countries
Source: Global Insight (Jan 2008), Airbus

Traffic forecast
The Chinese and Indian governments both aim to stimu-
late their economies using multi-million dollar infrastruc-
ture projects, which also include airport developments.
China’s massive US$586 billion package is designed to
boost investment and consumption.
Packages unveiled by the Indian government in late 2008
and early 2009 have made more funds directly available
for projects that will help the country’s airport infrastruc-
ture, which has struggled to keep pace with rapid growth
and the resulting increase in air traffic, increasing by an
average of 20% per year since 2002. The government
Large potential to increase propensity to travel
has also relaxed regulations to make it easier for those
involved in infrastructure projects to gain access to foreign
funds.
These actions also address concerns raised in a report
published by Forbes, which indicates that three of the five
airports with the most significant delayed arrival times in
2008 were in India, and another by Goldman Sachs,
which highlights the need for infrastructure development,
including airports, in their top ten recommendations to
ensure India realises its economic potential by growing
forty-fold by 2050.
0.001
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000
0.01
0.1
1
Trips* per capita - 2008
2008 Real GDP per Capita
10 Seychelles
Barbados Malta
Passenger originating from a particular country
Note: GDP in 2005 US$
Source: IATA PaxIS, Global Insight, Airbus
Cyprus
Bahrain
Bahamas
New ZealandSingapore
Macao UAE Ireland
SwitzerlandDenmark
Netherlands
Sweden
USAQatar
UK
Belgium
Finland
Japan
Canada
St Lucia
Fiji
Cape verde
Samoa
Jordan
Malaysia
Mauritius
Czech rep.
EstoniaCroatie
Latvia
Panama
Saudi Arabia
Bosnia
Belarus
Angola
Nigeria
Bangladesh
Lesotho
Afghanistan
Iraq
Chad
Niger
Botswana
Slovakia
Maldives
ItalyBrunei
Slovenia
South Korea
Puerto RicoTrinidad
Taiwan
Israel
Portugal
Spain Hong Kong
Australia
Greece
Germany
FranceKuwait
Hungary
Mexico
Poland
Suriname
Brazil
China
India
World average
Russia
Equatorial Guinea

In 2008, the number of foreign tourist arriving in India was
up 5.7% on 2007 to 5.5 million, despite the problems
that beset the Indian market in the second half of the
year, including fuel prices, terrorism and the economic
crisis. However, there is clearly also a lot of additional
potential, when you consider that some 47 million foreign
tourists visit China each year and there are 528 million
domestic Indian tourists that can be targeted with air
travel, at the right price.
In recent years, the populations of emerging countries
like China and India have clearly demonstrated an
increased propensity to fly. Even with the significant
growth in air transportation witnessed in recent years,
huge potential exists for further growth as these nations
and their people become better able, economically, to
take advantage of the benefits aviation undoubtedly
offers. Wider access to such opportunities helps ensure
that GDP and wealth are increasingly spread amongst
the world’s nations. By 2017, it is forecast that 70%
of the world’s population will be responsible for 18% of
world GDP: double the 1997 level of just 9%.
GDP increasingly spread over the world
Although China and India are the largest emerging
markets, the United Nations has identified another 27
emerging or potentially emerging countries. With a com-
bined population of almost three billion people, these
represent smaller, but never-the-less significant markets,
in terms of their economies and air transportation.
Many of these governments recognise the benefits
aviation can offer their economies and their people, so
actively support and promote air transport within and
from their nations. This support comes in many forms,
but can include tax relief on aircraft purchases and fuel,
airport and infrastructure projects, and creating
or extending existing bilateral arrangements, thereby
creating greater deregulation and greater access and
choice for passengers. Vietnam for example has imple-
mented many of these policies, including extending a
bilateral agreement with the US in 2008, and is today
seen as one of the fastest developing markets in Asia
and indeed, the world.
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
20%
10%
40%
30%
60%
50%
70%
90%
100%
80%
World Population (%)
World GDP (%)Source: Gobal Insight, Airbus
2017
2007
1997
Future air travel capture

2.52.01.51.00.50 3.0
Spain-United Kingdom
Germany-Spain
Republic Of Ireland-Italy
Germany-United Kingdom
Germany-Italy
France-United Kingdom
Italy-United Kingdom
Italy-Spain
France-Germany
France-Spain
France-Italy
Netherlands-United Kingdom
Austria-Germany
Germany-Switerland
Germany-Greece
Switerland-United Kingdom
Poland-United Kingdom
Portugal-United Kingdom
Netherlands-Spain
France-Switzerland
Spain-Switzerland
Germany-Sweden
Germany-Poland
Denmark-Norway
Germany-Netherlands
France-Netherlands
Italy-Netherlands
Portugal-Spain
Belgium-Italy
Denmark-Germany
Sweden-United Kingdom
Germany-Portugal
Belgium-Spain
Denmark-United Kingdom
Norway-United Kingdom
Republic of Ireland-Spain
France-Portugal
Denmark-Sweden
LCC Airlines
Other scheduled airlines
Source: Airbus, OAG, Scheduled seats (millions), September 2008
Millions sheduled seats (Sept 2008)
Traffic forecast
Europe
Low Cost Carriers (LCC) now carry over a third of the
scheduled traffic in Europe and will continue to act as a
stimulus for air traffic growth into the future. Despite being
heavily affected by a higher oil price, the LCC model in
Europe has not lost ground and many airlines have
actually strengthened their positions. Even the economic
downturn provides some opportunities, with business
passengers in particular increasingly flying LCCs as travel
budgets are tightened. Longer term, opportunities for
mergers and acquisitions among LCC airlines will lead to
the possibility for fewer but larger groups, enabling them
to reinforce their networks and access more markets,
potentially even on long-haul routes.
LCCs exceed 50% market share on some large intra-
European flows
LCC’s continue to grow
and influence traffic growth
The European LCC market is well established and
beginning to mature. As well as seeking new routes, for
which the number of opportunities will steadily
decrease, operators will look to consolidate and grow
existing markets and routes, inevitably leading to the
need for larger aircraft. Three quarters of the LCC capa-
city is today on intra-European markets, where LCCs
often already exceed 50% market share on large non-
adjacent markets.
LCC’s exceed
50% on some
European
markets

Domestic European LCC operations primarily focused
on a small number of key countries today
There is still significant potential for LCCs in the largest
domestic markets, such as in Spain or Italy, although
competition with other modes of transport, such as
the high-speed train, is more pronounced on shorter
distances. In addition, many domestic markets are
limited to regional jet operations, an aircraft segment
in which LCCs have traditionally not operated.
2.01.00.0 3.0
Domestic Spain
Domestic Italy
Domestic Germany
Domestic France
Domestic United Kingdom
Domestic Norway
Domestic Sweden
Domestic Greece
Domestic Finland
Domestic Portugal
Domestic Denmark
Domestic Ireland Republic
Domestic Switzerland
Domestic Poland
Domestic Austria
Domestic Romania
Domestic Croatia
Domestic Israel
Domestic Iceland
Domestic Greenland
Domestic Bulgaria
Domestic Czech Republic
Domestic Slovakia
Domestic Cyprus
Domestic Latvia
Domestic Netherlands
Domestic Estonia
Domestic Bosnia And Herzegovina
Domestic Macedonia Former
Domestic Lithuania
4.0 5.0
LCC Airlines
LCC Market share: 22%
Source: Airbus, OAG, Sheduled seats (millions), September 2008
Despite a challenging year for air transport in 2008,
LCCs in Europe offered 10% more seats than in 2007.
This strong performance largely benefited the two
major LCC carriers in Europe, which account for over
40% of the LCC market and saw capacity increase
by 21% between 2007 and 2008.

Traffic forecast
The US and European LCC markets are similar in size.
However, while 95% of the US LCC traffic is carried by
the top four airlines, the European market is still largely
fragmented, with 30 carriers splitting 60% of the traffic
and increasing capacity by 3.6% between 2007 and 2008.
Though very few bankruptcies occurred in 2008, the last
18 months have seen the European LCC market slowly
begin to consolidate, helped by the absence of new
LCC start-ups and a more difficult environment where
numerous survival plans involve mergers between LCC
airlines or network carriers reabsorbing LCC affiliates.
Two strong performers
in a difficult environment
dominating a fragmented
but now consolidating LCC
market in Europe
Even with this consolidation, the European LCC market
will remain more fragmented than its US counterpart
because of the greater diversity of markets, travellers
and airline business models. The difficulties facing some
secondary network carriers in Europe will continue to
allow better placed LCCs to increase their share of key
markets, while the trend towards greater European
cultural and political integration will continue to provide
growth and new network opportunities. LCCs will conti-
nue to play a key role in the mobility of Europeans,
particularly to and from the more disparate destinations
in the European Community, with their weighted
average route length having increased 20% to 1,050km
in the last five years.
LCCs are flying longer
routes participating
in the unification of Europe
0
100
150
50
200
250
300
350
400
450
500
Daily seats (Thousands)
Ryanair & Easyjet
+21%
+3.6%
> 30 other LCC carriers
2008 total growth
2007 seat capacity
600
800
1,000
1,200
Average distance (km)
2000 2004 2008
Source: Airbus, OAG, LCC routes average great circle distances.
Weighted by the scheduled seats, September 2008
791 km
924 km
1,050 km

Organic growth, or growth of existing markets, is still
modest, but is key to forecasting future LCC traffic
growth as additional new network opportunities dimi-
nish. For one major European LCC, 30% of the growth
Asian market split. LCCs have captured the largest share
(62%) in domestic ASEAN(1)
markets
More larger aircraft will be needed for the
LCCs to operate higher density markets
0
50
100
150
200
250
300
350
400
Number of airline routes
2000 2004 2008 2012 2016 2020 2024 2028
Source: Airbus, OAG. Number of LCC routes* > 500 daily seats
*Airport pairs operated by a specific airline
LCC Routes* > 500 daily seats
History Estimates
19%
of the LCC
capacity
41%
of the LCC
capacity
Total: 2.5 million daily seats
65%11%
11%
4%
9%
0
10
20
30
40
50
60
70
% of seats offered by LCCs
LCC share
11%
2%
8%
37%
62%
Domestic markets excl.
ASEAN markets
Domestic ASEAN markets
Intl. Markets between ASEAN Nations
(1) Association of South East Asian Nations (ASEAN) : Brunei, Darussalam, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam
Intl. Markets not linked to ASEAN
Intl. Markets from ASEAN
Source: Airbus
in 2008 was organic. By the year 2028, it is estimated
that 40% of the LCC traffic will be on routes with more
than 500 daily seats, so many will require larger aircraft
than the 737s and A319s typically used today.

Traffic forecast
Asia
LCC growth in Asia-Pacific has remained high. Over 30
operators generated 19% more traffic in 2008 than in
2007, with the top five carriers accounting for 68% of
that growth. In addition, there are still opportunities for
LCC markets to become more widespread, with poten-
tial for new operations and even some new operators in
parts of Asia where LCCs are not well established.
However, the overall number of LCC operators in the
region should remain stable.
In a very short time LCCs in Asia have captured 14% of
a regional market that is the same size as the domestic
Domestic Asia markets: 14% market share for LCC’s
5004003002001000 600 700
Domestic China
Domestic Japan
Domestic Australia
Domestic Indonesia
Domestic India
Domestic Republic Of Korea
Domestic Malaysia
Domestic Thailand
Domestic Philippines
Domestic New Zealand
LCC Airlines
58% of Asia-Pacific domestic traffic
LCC share: 3%
Half of the top 10 markets with a
LCC market share > 40%
Top 10 markets (95% of total domestic traffic)
Source: Airbus
markets in North American or Europe. However, while
similar in size, the Asian market differ with these more
mature markets significantly. For example, in half of the
top ten domestic Asian markets, LCCs have over 40%
market share, more than some western markets are
experiencing. However, LCCs are basically non-existent
on the two largest domestic markets, Japan and China.
Asian LCCs will continue to grow in their domestic
markets by both increasing their market share and by
benefiting from impressive regional economic growth.
However, they are also increasingly considering the
potential of international markets.

Intra-Asia: LCC’s have taken just an 8% market share,
but increasing rapidly
2520151050 30 35 40 45
China-Hong Kong-China
China-Japan
China-Republic Of Korea
Hong Kong-China
Japan-Republic Of Korea
Australia-New Zealand
Japan-Chinese Taipei
Singapore-Indonesia
Singapore-Australia
Malaysia-Indonesia
Hong Kong-Japan
Hong Kong-Thailand
China-Singapore
Singapore-Thailand
Japan-Thailand
Malaysia-Singapore
Malaysia-Thailand
Hong Kong-Singapore
Hong Kong-Philippines
Hong Kong-Australia
Macao (Sar) China-Chinese Tapei
Japan-Singapore
China-Thailand
Hong Kong-Korea
Republic Of Korea-Thailand
Thailand-Australia
China-Malaysia
Philippines-Republic Of Korea
Chinese Taipei-Thailand
India-Thailand
Japan-Philippines
Thailand-Vietnam
Singapore-Vietnam
India-Singapore
LCC Airlines
Top Asian markets
(74% of total international traffic)
LCC capacity between Asian markets grew by a stun-
ning 37% in 2008. This was helped by more markets,
like the Singapore-Kuala Lumpur route, being opened to
LCC airlines, but in the third quarter 2008, operations
like this between markets in other ASEAN countries only
represented 8% market share.

Traffic forecast
Intra-ASEAN countries:
LCC now represent more
than a quarter of the traffic
Traffic from the ASEAN countries to other countries
within the region has increased by 67%, fuelled by a
greater liberalisation that has mainly been achieved
through bilateral agreements. Today, 60% of that market
is on routes with ranges below 2,000nm (3,700km),
where LCC airlines traditionally operate. However, a
number of LCCs are operating at ranges above that
and are mainly using larger aircraft, particularly wide-
body types.
Today, 20% of all international Asia-Pacific traffic is over
2,000nm (3,700km). Within the next 20 years, it is
forecast that nearly 250 additional routes (including
additional carriers on existing city pairs) will be added, a
quarter of which will be over 2,000nm (3,700km), with
most requiring wide-body aircraft. LCCs are likely to
grab a significant share of this traffic, while also develo-
ping operations to further destinations, in particular to
North East Asia, where LCCs are emerging, notably
from South Korea. For example, LCC traffic among
ASEAN countries and between ASEAN countries and
South Korea are expected to grow by an average of
10% per year over the next 20 years. Should the mar-
kets of Japan and China become more accessible to
LCC operations, the growth rates would be much
higher. The growth of these LCCs will continue to offer
% of seats offered
between ASEAN countries
LCCs
Other
Scheduled
service
27%73%
• Market share > 25% (2008)
• Passenger growth > 25% (2008 vs 2007)
Source: Airbus
40% of the demand from ASEAN countries
with in Asia is on distances over 2,000nm
0%
20%
10%
30%
40%
50%
60%
100%
% of total cumulative demand from ASEAN countries to the region
Range (nm-Great circle)
90%
80%
70%
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
LCCs
market share: 2%
LCCs
market share: 11%
people in the Asia-Pacific region an opportunity to reap
the benefits of air transport through new routes and
more affordable travel, as well as helping to drive world
traffic growth to its projected highs.

As well as economic and LCC growth, continued dere-
gulation, particularly in the developing markets in Asia, is
expected to drive future traffic growth. Recent examples
include the expanded trans-Atlantic agreement between
the US and Europe. However, developments on one
important Asian flow, in particular, China to Taiwan, has
also taken significant steps forward in recent months.
Chinese Cross Straits traffic remains one of the most
regulated markets in the world, but is still one of the
largest intra-Asian traffic flows with almost five million
travellers using all modes of transport each year. The
market has experienced solid growth during the past
decade with an average annual growth rate of 8.1%.
Deregulation drives growth in
inevitable growth
Chinese Cross Straits: as deregulation
progresses, more direct flights and a surge
in air traffic demand are expected
CSX
PEK
TSN
DLC
TAO
NKG
HGH
PVG
HGH
WUH
CGO
FOC
XIY
KMG
CTU
CKG
HAK
CAN
KHH
XMN
SZX
Source: Airbus
• One of the most regulated markets in the world with few
scheduled direct flights.
• Strong visitor growth: 8.1% per year on average during
the last 10 years.
• Has the potential to become the number one network
within Asia.
January 2009 : direct non stop scheduled flights to mainland China
In January 2009, following additional deregulation,
over the Chinese New Year, 108 weekly scheduled
flights were allowed to operate between mainland China
and Chinese Taipei. Thirteen carriers operated these fre-
quencies and new routes.
In the medium term, providing the trend continues and
there is full deregulation over time, the direct routes
between Taiwan and mainland China could become
the number one intra-Asian network in terms of
air traffic.

Traffic forecast
emerging markets :
from Cross Straits travel
Arrivals in mainland China
from Taiwan by mode
of transportation
Today, most air traffic between these points goes
through Hong-Kong or Macau, where scheduled direct
air links are allowed from Taiwan. Passengers then
connect by air or other modes of transport to reach their
final destinations in mainland China. Others points of
entry to mainland China also involve non-aerial trans-
ports. Overall, 60% of the visitors still complete their
journey to their final destinations by using non-air modes
of transport.
Just five mainland Chinese destinations are responsible
for half of the demand. These are cities mainly located in
the south easten parts of the country where social, his-
torical and economic ties with Taiwan are the strongest.
However, as more deregulation occurs, with as a conse-
quence a surge in mainland Chinese nationals travelling
to Taiwan, demand is expected to spread from many
more cities in mainland China, thereby increasing the
average trip length and therefore aircraft utilisation.
Chinese cross straits forecast:
the number one intra-Asian network
60%40%
Source: Airbus, OAG,
National Tourist Administration (September 2008)
Other modesAir
On direct
flights and
continuation
from
Hong-kong
& Macau
Moslty
through
Hong-kong
& Macau
PEK
TSN
TNA
DLC
TAO
NKG
HGH
HGH
WUH
CGO
FOC
XIY
KMG
CTU
CKG
HAK
CAN
NMG
KHH
KWL
SZX
YNT
Source: Airbus
• Air Traffic to almost triple within the next decade.
(Includes traffic to Hong-Kong and Macau).
• > 8 million air travellers per year on the direct routes
to Mainland China only.
• More routes, average distance to increase.
• Single-aisle up to very large aircraft needed to operate
the different markets.
Direct non-stop scheduled routes with regular flights to mainland China within the next decade

Many of the passengers expected to fly the new direct
air links between Taiwan and mainland China will be
diverted from the current Hong-Kong and Macau routes
to Taiwan, as two thirds of the traffic on these routes
consists of passengers connecting to mainland China.
Overall 20% of Hong-Kong regional traffic has the
potential to be affected by the new direct air services.
However, in the short term only 35% of this demand is
expected to effectively translate into lost traffic, as
Hong-Kong Airport will remain an attractive gateway
for nearby mainland destinations, in Guangdong pro-
vince, and will continue to offer more destinations and
flights to mainland Chinese cities. While the connecting
traffic will continue to erode, direct traffic between Hong-
Kong and Taipei will continue to increase at an average
rate estimated at 5.2% per year (2008-2020), more
than offsetting the decline of the connecting traffic to
mainland China beyond the next 5 years. Therefore, by
2020, the HKG-TPE route will increasingly become a
route serving origin and destination demand between
these points directly, with 72% of traffic being those
people only wanting to travel between the cities
of Hong Kong and Taipei.
As well as being an example of the pro-active deregula-
tion of an important market allowing significant growth,
it is also an example of the strength of the resulting
unleashed demand.
The magnitude of the effects of the deregulation and
when they will occur is uncertain, but recent events
show developments happen sooner rather than later.
Frequencies will increase significantly in 2009, if we
assume frequencies trebling to around 350 a week with
the additional new routes, this implies that 75% of the
current visitors will be able to fly to their desired destina-
tions directly. There would also be enough flights to
capture all the demand on the routes served in January
2009 with a mix of single-aisle and wide-body aircraft.
Assuming progressive, total deregulation and with a
conservative scenario, more than eight million air travel-
lers will fly annually one way on the direct air routes
between mainland China and Taiwan within the next
decade. That is similar to Japan-PRC. Total traffic
between Taiwan and China, including Hong-Kong and
Macau, could almost triple within the same timeframe.
This as deregulation, particularly for passengers from
mainland China, will boost demand and some existing
demand switching to air travel. As traffic levels grow,
average distance flown increases and top destinations
will continue to attract most of the demand, a large
number of aircraft, ranging from single-aisles to very
large aircraft will be necessary to fly Cross Straits.

Traffic forecast
Air travel will double
in the next 15 years
Air travel remains a growth
market
0
199019801970 2000 2010 2020 2030
2
4
6
8
10
World annual traffic - RPKs trillion
Air traffic
will double
in the next
15 yearsAir traffic
has doubled
every 15 years
+ 10.5% per year
Source: ICAO, Airbus
Airbus
GMF 2009
ICAO
total traffic
As a result of drivers such as these, worldwide Revenue
Passenger Kilometres (RPKs) will grow at an average of
4.7% per annum over the next 20 years. Among the
largest submarkets, annual RPK growth on domestic
Indian and PRC flows are expected to average 10% and
7.9% respectively. This reflects optimistic long-term pro-
jections for economic growth in these countries, as well
as a growing tendency for their populations to travel by
air, reaping the benefits of vastly reduced journey times
for largely similar prices. Growth will also be driven by
increased wealth and improved access to air transport
generally. Some other markets linked to the Indian
Subcontinent are expected to grow strongly, with an ave-
rage annual RPK growth of 5.8% for the Indian
Subcontinent-Western European market and 5.8% for
the Middle East-Indian Subcontinent market for example.
For other, more mature markets, such as the domestic
US and the intra/domestic European market, Airbus
forecasts average annual RPK growth of 2% and 3.3%
respectively. Although these seem to be relatively small
numbers, they are still significant due to the already high
levels of traffic in these regions. The pace of growth on
Indian and Chinese domestic flows is set to increase
seven-fold and five-fold respectively over the next 20
years. However, by 2028 the total volume of traffic,
including growth, will still be larger in the US and
Western Europe.

History and forecast of world top ten traffic flow by RPK
1. Domestic US
2. Intra - Western Europe
3. US - Western Europe
4. Domestic PR China
5. Asia - Western Europe
6. South America - Western Europe
7. Japan - US
8. Domestic Western Europe
9. PR China - Western Europe
10. Central Europe - Western Europe
1. Domestic US
4. Japan - US
9. Domestic Japan
10. Asia - US
1. Domestic US
4. Japan - US
6. Asia - US
8. Domestic Japan
1998 2003 2008
Largest 20 traffic flows in 2028
4.3%
4.4%
4.6%
3.0%
5.8%
6.8%
5.4%
5.5%
5.6%
4.2%
10.0%
6.7%
7.1%
4.6%
5.7%
7.0%
4.0%
3.3%
7.9%
2.0%
1,0008006004002000 1,200 1,400 1,600
RPKs (Billions) 20-year
growth
1.3%
1.3%
1.3%
1.3%
1.5%
1.5%
1.5%
1.8%
1.8%
1.8%
2.2%
2.3%
2.3%
2.5%
2.5%
2.6%
6.8%
8.4%
8.7%
12.2%
% of 2028
World RPKs
2008 traffic 2009-2028 growthDomestic US
Domestic PR China
Intra West. Europe
PR China - West. Europe
US - West. Europe
South America - West. Europe
Asia - West. Europe
Asia - PR China
Central Europe - West. Europe
Domestic India
Japan - US
Asia - US
Middle East - West. Europe
Intra-Asia
PR China - US
India Sub - West. Europe
Domestic West. Europe
Domestic Asia
North Africa - West. Europe
Canada - West. Europe
Source: Airbus
20-year world
annual traffic
growth 4.7%

Traffic forecast
1. Domestic US
8. Asia - PR China
10. Domestic India
1. Domestic US
9. Japan - US
10. Asia - PR China
1. Domestic US
7. Japan - US
10. Asia - PR China
2013 2018 2028
India and China the fastest growing,
but US remains the largest market
x1 x3 x5 x7x2 x4
Traffic volume in 2028
RPKs(billions)
Domestic US
Domestic
Japan
Ratio to 2008 traffic
200
400
600
800
1,000
1,200
1,400
1,600
Domestic PR China
Domestic India
Western Europe - US
Western Europe - Asia PRC - US
Western Europe (Dom + Intra)
Indian Subcontinent - PRC
Source: Airbus

World traffic growth by regional flow - 2028 versus 2008
In addition, the combined Middle Eastern traffic flows
are expected to expand rapidly, with 6.9% annual
growth to 2028. Flows from and within the
Commonwealth of Independent States (CIS) will gene-
rate 5.9% average annual growth, while Africa and Latin
America are expected to increase by 5.2% and 5.8%
respectively.
The progress made by Chinese flows is equally clear.
The country’s domestic flow moved up from seventh
place in 1998 to fourth in 2008 and is expected to be
the third largest by the end of 2028, with flows linked to
Asia in general representing five of the top ten largest
flows in terms of traffic. As a consequence, airlines
based in Asia are expected to develop their traffic more
rapidly than those based in other regions, growing by
an average of 6.0%. This is fuelled by the aspirations of
airlines and in some cases the countries themselves,
as well as by access to burgeoning markets driven by
liberalisation and a growing propensity to travel.
The airlines of Latin America, the CIS and Africa are also
expected to register growth higher than the global ave-
rage during this period, as air transportation and its
benefits continue to be more evenly distributed around
the world. As a result, traffic will be much more evenly
shared across the world, with Asian airlines forecast to
triple operations to represent 33% of all traffic by 2028.
The fastest regional traffic growth will be in the Middle
East, where the ambitions of countries and airlines will
drive annual growth of 6.9%. Over the next 20 years this
will result in the region increasing its world share to 8% of
the total.
Looking at traffic evolution from a different point of view,
this time segmenting airlines at a very broad level (or the
highest possible granularity), the network airlines are
expected to remain dominant with 75% of the total
worldwide traffic, whether they are global, major, such
as a large national flag carrier with a large fleet, or small.
The 42 global network airlines, which grow more slowly,
will still represent 55% of total worldwide traffic in 2028.
Today's LCCs are expected to grow 1.2% per annum
faster than the global network airlines (the 84 included in
this GMF represent 98% of global LCC traffic).
0%
30%
50%
100%
RPKs (billions)
World 2008
World 2028
DomesticPRC
790
Otherflows
3,009
Domestic&Intra-W.Europe
536
DomesticUS
462
W.Europe-US
426
W.Europe-PRC
227
Domestic&IntraAsia
225
DomesticIndia
222
Asia-PRC
202
W.Europe-SouthAmerica
195
W.Europe-C.Europe
193
W.Europe-Asia
171
Asia-USA
141
W.Europe-MiddleEast
138
4,665
11,602
Source: Airbus

Airline segmentation - world traffic evolution
Passenger traffic growth by airline domicile
Asia to lead in world traffic by 2028
2019-2028
2.9%
20-year
growth
2.4%
North America
2009-2018
1.9%
2019-2028
5.6%
20-year
growth
5.8%
Latin America
2009-2018
5.9%
2019-2028
5.1%
20-year
growth
5.2%
Africa
2009-2018
5.4%
2019-2028
4.7%
20-year
growth
4.3%
Europe
2009-2018
4.0%
2019-2028
5.6%
20-year
growth
5.9%
CIS
2009-2018
6.2s%
2019-2028
4.8%
20-year
growth
4.7%
World
2009-2018
4.6%
2019-2028
5.5%
20-year
growth
6.0%
Asia-Pacific
2009-2018
6.6%
2019-2028
6.3%
20-year
growth
6.9%
Middle East
2009-2018
7.6%
2,5002,0001,5001,0005000 3,000 3,500
RPKs (billions)
Traffic by airline domicile
Asia
Europe
North America
Latin America
Middle East
CIS
Africa
6.0%
20-year
growth
4.3%
2.4%
6.9%
5.8%
5.9%
5.2%
33%
% of 2028
World RPKs
26%
20%
8%
6%
4%
3%
2009-2029 growth2008 traffic
4%
14%
57%
13%
6%
6%
Traffic at end 2008
4.7 trillion RPKs
Traffic at end 2028
11.7 trillion RPKs
Global Network
Major Network
Charter
Small network
LCC
Regional
& Affiliates
16%
4%
16%
4%
5%
55%
Source: Airbus
Traffic forecast

Airbusglobalmarketforecast 2009 - 2028

Airbusglobalmarketforecast 2009 - 2028

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