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GlobalMark et Forec ast

2000 - 2019

July 2000

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31707 Blagnac CedexFrance

Telephone +33/(0)5 61 93 33 33 Airbus Industrie 2000

All rights reserved

AI/CP 390.0031/00

The statements made herein do not constitute an offer.They are based on the assumptions shown and areexpressed in good faith. Where the supporting grounds forthese statements are not shown the Company will bepleased to explain the basis thereof.

Printed in France

The Airbus Global Market Forecastcan also be found on the Internet at

http://www.airbus.com
http://www.airbus.com/http://www.airbus.com/

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Contents

1. Forecast highlights 4

2. Key forecast parameters 8

3. Introducing the GMF 9

4. Demand for air travel 12

5. Air transport operational evolution 15

6. Fleet renewal 21

7. World passenger fleet development 238. Demand for passenger aircraft deliveries: 27

- Regional jets 31

- Mainline single-aisles 32

- 200/250-seaters 33

- Mid-sized & large twin-aisles 35

- Very large aircraft 36

9. Air cargo forecast 41

Appendices

A. Geographical regions & airlines analysed 58

B. Route network development 61

C. Passenger market segmentation 62

D.Seat supply analysis 64

E. Passenger traffic forecast methodology 66& results

F. Aircraft replacement methodology 70

G. Detailed passenger fleet results:

- Ten years: 2000 to 2009 72

- Twenty years: 2000 to 2019 74

H. Cargo forecast methodology 76

I. Cargo forecast results 83
http://www.airbus.com/http://www.airbus.com/

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During the last year since the issue of Airbus Industrie's previous

Global Market Forecast (GMF), economic forecasters have become

somewhat more cautious regarding the prospects for long-termeconomic growth. Nevertheless the results of the latest GMF

confirm Airbus' confidence in the continued strength of the civilaircraft market over the next twenty years, provided ways and

means can be found to ease the problems caused by congestion.

A significant role in the development of the world fleet will be

played by a new generation of aircraft larger and more economical

than anything flying today, and designed to be compatible with

existing airport infrastructure.

Airbus' latest GMF covers the evolution year by year during the

period 2000 - 2019 of the fleets of passenger and combi aircraftwith at least 70 seats, as well as dedicated freighters, operated by

the world's largest 228 airlines and 49 subsidiaries, together with

187 additional cargo operators.

In response to widespread demand, this summary document

presents the results for the ten-year period to 2009 as well as for the

full twenty years covered by the forecast.

The major predictions are that:

l Driven mainly by continuing economic (GDP) growth and

reduced fares, passenger traffic (revenue passenger-kilometres) will

grow at an average annual rate of 5.2 per cent during the next tenyears. Growth will slow as markets mature, to average 4.6 per cent

through the following decade, resulting in twenty-year average

annual RPK growth of 4.9 per cent through 2019, when the airlineswill be generating 160 per cent more RPKs than today.

l Cargo traffic will be stimulated by the development of global

e-commerce and manufacturing trends, and freight tonne-kilometres

will grow more rapidly than passenger traffic. FTKs will increase at

an average annual rate of 6.1 per cent through 2009, slowing to 5.3

per cent annually during the following ten years. Twenty-year

annual FTK growth will average 5.7 per cent through 2019.l Modest increases in speed, load factor and utilisation will result

in improvements in productivity. The number of annual RPKs

produced by each seat installed in passenger aircraft will increase

from about 1.66 million in 1999 to 1.8 million in 2009 and more

than 1.9 million in 2019. Similarly, the number of annual FTKs

produced by each tonne of capacity in freighters will increase from

just under 1 million in 1999 to 1.14 million in 2009 and 1.27 million

in 2019.

l Consequently, to accommodate growing demand, the number of

seats in passenger service will increase from 1.85 million today to

1. Forecast h igh l ights

2000 Global Market Forecast

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2.8 million in 2009 and nearly 4.2 million in 2019. At the same time

the capacity of the dedicated freighter fleet will grow from nearly69,000 tonnes to 113,000 tonnes in 2009 and 184,000 in 2019.

l As passenger airlines increase frequencies on existing routes and

operate additional routes, the number of departures will increasemore rapidly than in the past. Annual departures will increase at anaverage 3.8 per cent per year through 2009. Limited infrastructure

capacity will constrain further growth in departures to just 2.7 per

cent per year through the next decade, resulting in a twenty-year

average annual growth in departures of 3.3 per cent through 2019,when the airlines will be making 90 per cent more daily departures

than today.

l Since the number of departures will be unable to keep pace with

the growth of traffic, the airlines will have to offer more seats per

departure. From the current average of 158, seats per departure willreach 168 in 2009 and 190 in 2019; an overall increase of 32.

l Smaller aircraft tend to make more flights than larger ones, so the

average number of seats per aircraft will need to grow more rapidly

than seats per departure. From the current 179 seats, average aircraft

size will increase at an accelerating rate to 191 in 2009 and 217 in

2019; an increase of 38. Thus, over the next twenty years, seats per

aircraft will increase by 19 per cent more than seats per departure.

l As a result, to provide the required increase in capacity, the

number of passenger aircraft in service will increase from some

10,350 in 1999 to 14,820 in 2009 and 19,170 in 2019.

Forecast highlights

lBy 2009, some 4,520 of the passenger aircraft currently in service

will have been replaced by their current operators as they seek to

The w orld jet l iner f leet w i l l grow by nearly11,000 aircraft

Passenger Passenger PassengerFleet Fleet Fleet

Fre ighter Fre ighter Fre ighter Fleet Fleet Fleet

New15,364(7,608)

Retired4,601

(2,408)

Recycled3,174(1,644)

Converted2,389(1,166)

1,153(703)

3,448(1,705)

703(271)

14,661(7,337)

World fleet change 2000 - 2019 (2000 - 2009 in brackets)

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maintain a youthful fleet. Of these, 1,640 will be recycled back into

the world fleet, leaving a need for delivery through 2009 of a totalof about 7,340 new passenger aircraft.

l During the following ten years another 4,500 aircraft will be

replaced, of which 1,530 will be recycled, leaving a need foranother 7,320 new aircraft for growth and fleet renewal. So over thetwenty years through 2019 the airlines will take delivery of a total

of about 14,660 new passenger aircraft. And of the 9,000 aircraft

replaced during this period, almost 2,400 will be converted to

freighters and enter dedicated cargo operations.

l The average delivery rate of 733 new passenger aircraft per year

projected through the first ten years of the forecast will be sustained

through the second decade in terms of units. However the

progressive trend towards larger aircraft means that the dollar value

of deliveries in the second decade will be greater.

l The biggest share (35 per cent) of deliveries of passenger aircraftwill go to airlines in North America. European airlines will take 30per cent, and Asia-Pacific airlines 24 per cent, leaving just 11 per

cent for airlines in Latin America, the Middle East and Africa.

l Higher growth in air travel markets outside the USA means that

the percentage of the world passenger fleet operated by airlinesbased in North America will decline from its current 43 per cent to

36 per cent in 2019, while the share of airlines in Europe and Asia-

Pacific rises. In terms of capacity, the most spectacular gain will be

made by the Asia-Pacific airlines, whose share of world seats willgrow from 24 to 29 per cent.

Nearly 15,400 new aircraft w i l l be del ivered ...

200/250-seaters like the AirbusA300, A310 and smaller model A330s

1,127 3,046

Larger twin-aisles like the AirbusA330-300 and A340 1,083 2,118

Very large and economical aircraftlike the Airbus A3XX 360 1,235

Mainline single-aisle types like theAirbus A318, A319, A320 and A321

4,330 7,570

70- & 85-seater regional jets 437* 692*

2000 - 2009 2000 - 2019

* many more of these aircraft will be needed by smallerairlines and current turboprop operators not covered by the GMF

7,608 15,364

Freighters 271 703

7,337 14,661Total passenger aircraft

Passenger + freighter aircraft

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Forecast highlights

l The world freighter fleet will grow from 1,510 aircraft with an

average capacity of 45.5 tonnes in 1999 to 2,240 aircraft with anaverage capacity of 50.5 tonnes in 2009. During this period some

700 freighters, having reached the end of their economic lives, will

be retired, creating the need for acquisition of a total of 1,440aircraft, including 1,170 passenger-to-freighter conversions and 270

new aircraft.

l From 2009 to 2019 the freighter fleet will grow to 3,450 aircraft

with an average capacity of 53.3 tonnes, while another 450 old

aircraft will be retired. Of the 1,650 aircraft delivered, 1,220 will beconversions and 430 new freighters. Thus a total of some 700 new

dedicated freighters will be delivered during the next twenty years.

l The new 7,610 passenger and cargo aircraft delivered during the

next ten years will be worth approximately $560 billion (2000

catalogue prices) and the 7,750 aircraft delivered during thefollowing decade will be worth another $750 billion, giving a total

twenty-year business volume of $1.31 trillion.

327.4

280.7

319.3

281.8

96.0

177.0

105.0

161.4

77.4

34.08.45.2

0

50

100

150

200

250

300

350

70&85 100 to 175 210 & 250 300, 350 &400

> 400 freighter

a business w orth $1.3 tr i l l ion

2000 $ (billion)

1% 32% 19% 29% 14%

20 00 - 2019

20 00 - 2009

1% 25% 21% 24% 22%

6%

7%

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The numbers of aircraft and seats needed at any point in time to

generate the forecast number of revenue passenger-kilometres at the

projected levels of service frequency will flow directly from theassumptions made regarding the evolution of such concrete

operational parameters as speed, aircraft utilisation, load factor andaverage flight distance.

To facilitate understanding of the GMF results and comparison with

other forecasts, the table below presents the actual and forecast

values at the beginning, middle and end of the twenty-year forecast

period of eight key parameters, from which the corresponding

values of a range of other operational parameters (such as speed)

can be easily derived.

These values, and the relationships between them, also provide auseful test of reasonableness of the forecast's results.

2 . Key forecas t pa ramet e rs


Key forecast parameters

Number of aircraft 10,349 14,815

Number of installed seats 1,852,641 2,834,332

Block hours per aircraft per year 3,502 3,636

Number of departures (000) 16,156.0 23,464.6

Seats per departure 158 168

World ASKs (billion) 4,378.5 7,076.9

World RPKs (billion) 3,080.1 5,100.2

Average flight distance (km) 1,370 1,414

End 1999 End 2009

Each of these numbers is a result, not an input !

19,173

4,168,701

3,736

30,738.8

190

10,864.2

7,985.7

1,444

End 2019Passenger aircraft only

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The millennial edition of Airbus Industrie's annual GMF predicts

the numbers of passenger and combi aircraft with at least 70 seats,

as well as dedicated freighters, that will be required during thetwenty years from 2000 to 2019 to accommodate traffic growth and

to allow fleet renewal by a total of 228 individual passenger airlinesplus 49 subsidiaries, outside the Commonwealth of Independent

States, which altogether account for 98 per cent of scheduled

passenger operations, as well as 187 additional cargo carriers. The

airlines studied, grouped into seven consolidated geographicalregions, as well as the criteria for inclusion in the GMF, are listed in

Appendix A.

3. In t roduc ing t he GMF

The GMF covers 228 passeng er air l ines ...

Europe78 airlines

2,789 aircraft

Asia-Pacific32 airlines

1,430 aircraft

Latin America36 airlines687 aircraft

North America29 airlines

4,418 aircraft

Africa23 airlines273 aircraft

Middle East11 airlines

261 aircraft

P.R. China19 airlines491 aircraft

and 187 freight er operat ors

Europe37 operators168 freighters

Asia-Pacific19 operators97 freighters

Latin America31 operators75 freighters

North America47 operators

1,055 freighters

Africa34 operators63 freighters

Middle East15 operators37 freighters

P.R. China4 operators

15 freighters

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Airbus recognises the great potential that exists for growth in

passenger and cargo traffic carried by airlines based in theCommonwealth of Independent States. Currently, however, the lack

of a consistent statistical base and reliable economic projections

does not allow the application to these airlines of the forecastingtechniques used in the GMF. Consequently Airbus makes a separate

forecast of the evolution of the fleets of the airlines in the CIS,

based on plausible assumptions, which is contained in a separate

document.

The GMF is a bottom-up forecast, projecting the year-by-yearevolution of passenger traffic, flight frequencies and aircraft

capacity on a total of 10,013 individual airport-pair route sectors

linking 1,896 airports in 82 distinct domestic and international sub-

markets. This avoids the errors inherent in top-down forecasts

derived from aggregations of averages.The route-by-route projections are then consolidated so as to

forecast the evolution of the individual fleets of each of the airlines,

and then further consolidated into the regional fleet forecasts shownin this summary document. Appendix B explains how the GMF

simulates the impact of new route development.

Unlike many forecasts, the GMF uses a very rigorous method of

product segmentation into 15 neutral seating categories.

Depending on its particular seating layout, any individual passengeraircraft will fall between two categories and contribute seats to

each. This ensures that at any time the number of aircraft (and

hence flight frequencies) and seats in each individual airline fleet

match exactly the forecast demand. Appendix C describes this

Demand is forecast in 19 c ategories

Passenger aircraft Cargo aircraft

Q 70 & 85-seaters *

Q 100,125,150 & 175-seaters

Q 210 & 250-seaters

Q 300, 350 & 400-seaters

Q 500, 600, 800& 1000-seaters

Q < 30 tonnes capacity

Q 30 to 50 tonnes capacity

Q 50 to 80 tonnes capacity

Q > 80 tonnes capacity

* the GMF does not predict total demand for aircraft in this category,because many more will be needed by smaller airlines and currentnon-jet operators

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Introducing the GMF

approach in more detail, while Appendix D illustrates the

application of the GMF methodology to a typical route. Cargoaircraft are segmented into four capacity categories.

The passenger traffic forecast methodology and results are

described in Appendix E.

The GMF is a pure demand forecast. The extent to which any

available aircraft type will satisfy the predicted future demand for

seats (or - for freighters - tonnes of lift) at projected levels of

frequency will depend largely on its competitiveness, and a versatile

passenger aircraft type, in service in a wide variety of seating

layouts, will contribute seats to a number of different neutral seat

categories.

Moreover, the GMF recognises that many airlines replace passenger

aircraft in their fleets long before the aircraft are converted to

freighters or definitively withdrawn from airline service. Aproportion of these aircraft are then recycled back into the fleets

of other airlines through the used aircraft or operating lease markets.

At the level of individual airline fleets, the GMF identifies the

corresponding opportunities to introduce new aircraft before the

existing aircraft reach the end of their economic lives. This

summary shows the extent to which overall forecast demand for

aircraft deliveries will be satisfied by used aircraft, as described in

Appendix F.

The detailed results of the GMF passenger fleet forecast through

2009 and 2019 are presented in Appendix G.

A significant proportion of airfreight continues to be transported by

dedicated freighters on a non-scheduled basis, rendering the

available flight schedule databases non-comprehensive. Until acomprehensive database becomes available, the GMF freighter

analysis will continue to deduce pertinent information about the

nature of the markets served and the type of service offered from

available aircraft-by-aircraft operational data.

The freighter and passenger aircraft forecasts are presented

separately due to the inevitable differences between the

methodologies. However the two forecasts are to some extentinterdependent because passenger aircraft operations play a crucial

role in global airfreight by making available significant freight

capacity in the belly-holds of passenger and combi aircraft, and by

providing significant dedicated freighter lift capacity through

passenger-to-freighter conversions.

The freighter forecast methodology and results are shown in

Appendices H and I.

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4. Dem and for a i r t rave l


Demand for air travel will continue to be driven primarily by

economic (GDP) growth, though as markets mature demand tends

to become more sensitive to changes in real fares. Initially, when airtravel can be afforded by only a tiny percentage of the population,

the fare level is largely irrelevant and the convenience of thejourney paramount. But as air travel becomes generally affordable,

more and more passengers - paying for their own tickets - will, if

necessary, go to considerable inconvenience if this enables them to

obtain a cheaper fare.

To maintain the growth in their business, airlines will have to find

ways to continue to reduce fares in real terms. Airbus forecasters

predict that in future the availability of still more efficient and

productive aircraft will make a major contribution to this.Airbus anticipates that high-speed rail systems will continue to take

a share of some highly-travelled short-haul travel markets, and this

is reflected in the GMF's growth rate projections. However theenormous investment required, together with environmental

concerns, will severely limit the proliferation of such systems.

Further, Airbus predicts that advanced telecommunications will

have an overall neutral impact on demand for air travel, any direct

substitution being counterbalanced by the stimulus they will provide

to economic growth.

Airbus does not expect that a new-generation supersonic aircraftwill achieve any significant penetration of the market during thenext twenty years. It also assumes that during this period the

development of subsonic air transport will not be significantly

World annual traffic - trillion RPK

Air t ravel w i l l cont inue to grow st rongly

0

1

2

3

4

5

6

7

8

9

1969 1979 1989 1999 2009 2019

ICAO traffic history

Airbus projection+ 4.88 % per annum

(11.2% p.a.)

(6.9% p.a.)

(4.5% p.a.)

(5.2% p.a.)

(4.6% p.a.)

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Demand for air travel

affected by a lack of availability of conventional hydrocarbon fuels,

although their increasing price as well as intensifying environmentalpressures will continue to provide strong incentives to improve fuel

efficiency.

Overall, Airbus predicts that during the ten years to 2009 scheduledrevenue passenger-kilometres (RPKs) carried by the GMF airlineswill grow at an average annual rate of 5.2 per cent, declining to an

average annual rate of 4.6 per cent as markets progressively mature

during the following decade. This results in a forecast average RPK

growth rate of 4.9 per cent per year through 2019. Thus during thenext twenty years world annual RPKs will grow to eight trillion

compared with the current level of three trillion.

Compared with the 1999 GMF, Airbus forecasters have increased

their estimate of annual traffic growth for the first decade by 0.1

percentage points, and reduced that for the following ten years by0.3 percentage points. This reflects a change, following the faster-

than-expected recovery of the economies of several Asian nations,

in the long-term outlook of the independent economic forecastsused by Airbus as an input to its forecasting models. The result is a

modest reduction by one-tenth of a percentage point of the average

annual growth in RPKs projected over the next twenty years.

Travel grow th w i l l vary w idely betw eendi f ferent markets

0

1

2

3

4

5

6

7

8

9

Average annual growth rate (% p.a.)1999 - 2019

% of world2019 RPK

Dom

.USA

Euro

pe-USA

Asia

-USA

Intra

Europe

Euro

pe-Asia

Dom

esticEurope

Dom

esticP.R.C

hina

P.R.

China-Asia

Afric

a-Europe

16.8% 13.3% 8.8% 7.6% 6.5% 3.9% 2.9% 2.4% 2.3% 2.2%

Intra

Asia

The individual sub-markets will grow at substantially different

rates. The mature US domestic air travel market is expected to grow

at just 2.9 per cent per year through 2009 and 2.3 per cent per year

through the following decade, resulting in a twenty-year average

annual growth rate of 2.6 per cent. In contrast, passenger traffic

growth on domestic routes in the People's Republic of China

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- driven largely by high GDP growth - is expected to average a

stunning 9.2 per cent annual growth through 2009, and 7.0 per centthrough the next decade. This means that during the next twenty

years domestic PRC traffic will increase nearly five-fold, at an

average annual rate of 8.1 per cent per year. The lower-than-averagegrowth projected on US domestic routes will result in the share of

world RPKs generated in this market declining to 17 per cent in

twenty years' time from its current level of 26 per cent. During the

same period domestic routes in the PRC will double their share of

world RPKs, increasing from 2.1 to almost four per cent. By 2019

the top ten sub-markets alone will generate two-thirds of total world

RPKs, but despite this concentration Airbus believes that tounderstand the traffic growth potential for each individual airline it

is necessary to study all the 82 sub-markets. These are listed in

Appendix E together with the average annual RPK growth ratesprojected over the two ten-year periods covered by the GMF.

World totalat end 1999

3.08 trillion RPK


7.99 trillion RPK

US domestic

26%

US domestic

17%

US domest ic share of w orld traf f ic w i l l decl ine

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5. A i r t ranspor t opera t iona l evo lu t ion

The results of the GMF flow directly from the assumptions made

regarding not just traffic growth but also such operational

parameters as speed, aircraft utilisation, load factor and averageflight distance. The values of these parameters also provide an

excellent test of reasonableness of the forecast results.

During the past twenty years the overall values of all these elements

have been increasing as route networks have evolved and airlines

have responded to global competition. Airbus forecasters predict

that during the next twenty years these historical trends will

continue, within the constraints of airport and air traffic

management capacity. For the GMF passenger airlines, they expect

that:

llAverage flight distance will increase from 1,370 km in 1999 to

1,414 in 2009 and 1,444 in 2019;

ll Average block speed, severely constrained by congestion, will

increase from 611 km/h in 1999 to just 616 in 2009 and 620 in

2019;

llAverage passenger load factor will increase from 70.3 per centin 1999 to 72.1 in 2009 and 73.5 in 2019, and

ll Aircraft annual utilisation will increase from an average of

3,502 block hours in 1999 to 3,636 in 2009 and 3,736 in 2019.

As is invariably the case, these average figures embrace a wide

range of variations. Higher-than-average traffic growth on longerinternational routes flown by the airlines in Europe, the Americas

and the Asia-Pacific region will serve to increase average flight

Increasing seat product iv i t y w i l l absorb part o f t ra f fi c growt h

-1 0 1 2 3 4 5

World traffic (RPKs) 4.9% 4.1%0.7%

RPKs per seat Seats in service

Passenger load factor 70.3 73.5

Utilisation (block hours/year) 3,502 3,736

Block speed (km/h) 611 620

1999 2019Elements of productivity

Average annual growth (% p.a.)

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distances and hence average speeds over the twenty-year forecast

period. The most striking development will be among Asia-Pacificairlines, for which a 146 km growth in average distance will result

in a 16 km/h increase in average block speed. On the other hand,

higher-than-average growth on local and domestic routes served bythe airlines of Africa, the Middle East and the PRC will lead to a

reduction in average flight distance and block speed.

The projected overall increases in speed, load factor and utilisation

combine to enable each seat in service to generate more RPKs each

year. Average annual RPKs per installed seat are projected toincrease from 1.66 million in 1999 to 1.8 million in 2009 and 1.92

million in 2019. This represents an average annual growth in seat

productivity of 0.8 per cent through 2009 and 0.7 per cent through

2019.

Consequently, to provide the forecast increase in RPKs, the airlineswill have to increase the numbers of seats they operate by

respectively 4.3 per cent per year through 2009 and 4.1 per cent per

year through 2019. As a result, the capacity of the GMF passengerairline fleet will grow from its current 1,852,600 seats to 2,834,300

in 2009 and 4,168,700 in 2019.

These global average figures embrace a considerable variation

between airlines based in the different geographical regions. Annual

average growth in seat productivity by as much as 1.1 per cent is

expected for the airlines of the Asia-Pacific region, where the GMF

projects a five-point increase in passenger load factor during thenext twenty years. On the other hand the highly productive but

predominantly short-haul airlines of North America are forecast to

-2 -1 0 1 2 3 4 5 6 7

RPK per seat Capacity (seats in service)

World traffic (RPKs) 4.9%

Asia-Pacific 5.6%

Middle East 4.3%

Europe 5.2%

Latin America 4.7%

Africa 4.4%

P.R. China 7.7%

0.7

0.6

1.1

0.6

0.9

0.7

0.7

4.1

7.1

4.5

3.7

4.5

3.2

3.4

3.7

N. America 3.8%

1.0

Seat product iv i ty and capaci t y growt h w i l l varybetw een the di f ferent air l ine regional groups

Average annual growth(%)

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Air transport operational evolution

increase seat productivity by an average of just 0.6 per cent per

year.

During the next twenty years, to accommodate the projected 7.7 per

cent annual growth in RPKs, the airlines of the PRC will have to

increase the number of seats they operate four-fold, from 97,100 to380,600. At the other extreme, the airlines of North America willincrease capacity by less than 90 per cent, growing from almost

700,000 seats in 1999 to just 1.3 million in 2019.

The seat productivity and fleet capacity growth rates shown on the

chart are the average increases needed for the airlines based in each

geographical region to accommodate the growth in air travel

projected in all the sub-markets they serve. They are not the growth

in seats needed on routes to, from and within the different regions.

Similarly, these figures cover a substantial variation between the

different individual airlines based in each of the regions. Amongairlines based in Europe, for example, twenty-year annual capacity

growth rates are forecast to range from a low of 0.6 per cent to a

high of 8.6 per cent, while airlines based in North America will

increase capacity at annual rates ranging from 2.2 per cent to as

much as 23.2 per cent in one extreme case.

The additional seats will be provided partly by an increase in the

number of aircraft operated (very largely determined by the increase

in numbers of flights), and partly by an increase in average aircraft

capacity. The method used by Airbus to determine the relative

contribution of these two variables is derived from a detailed studyof the actual distribution of flight frequencies between many

thousands of airport-pairs as a function of stage distance. For

200 400 600 800 1000 2000 4000 6000 800010000 Distance (km)1

2

4

6

8

10

20

40

60

Daily flights

Satisfactoryregionalservice levels(Europe shown)

Maximumservice levels

The GMF assumes l iberal f requencydevelopment

Frequencygrowth only

Capacity/frequency split

Capacitygrowth only

Frequencyshare

Capacityshare

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virtually all routes the numbers of daily departures are no greater

than those defined by the upper (blue) line. Rational behaviour bythe airlines means that this represents the maximum level of

frequency beyond which a further increase will not in itself

stimulate any additional travel demand. The lower (red) line,specific to each region-to-region sub-market, represents the

minimum level of service at which air travel becomes fully

attractive.

Thus within Europe, for example, on short routes of up to 500 km,

the minimum satisfactory service level is seven daily flights eachway, and where demand exists the GMF allows daily service to

grow to 60 flights each way. Corresponding frequency levels on a

6,000 km flight range from a minimum of two to a maximum of 18

daily flights, each way.

As traffic grows on a particular sector, additional capacity will berequired. As long as the minimum satisfactory level of service has

not been reached, all additional capacity is provided by adding daily

flights, keeping the same aircraft size. Beyond this point bothfrequency and aircraft size will be increased. The transition from

frequency to aircraft capacity is carefully tailored to favour

increasing frequency as demand grows, so as to simulate the

opening of additional routes (this aspect is further discussed inAppendix B). Once frequency reaches the maximum level all

further increase in demand is accommodated by an increase in

aircraft size.The overall result is a very liberal growth in frequencies. The GMFpredicts that in ten years' time the airlines will be making 45 per

cent more daily departures than today. This average annual increase

Aircraft s ize w i l l have to increase

No. of seats

(4.1%*)

Seats peraircraft (1.0%*)

No. of flights

(3.3%*)Flights per

aircraft (0.1%*)

No. of

aircraft

(3.1%*)

*20-year average annual growth rate

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Air transport operational evolution

of 3.8 per cent represents a faster growth in frequencies than has

been achieved during the past 25 years, despite the inevitableincrease in congestion and the assumed availability of larger

aircraft. The projected 3.3 per cent per year growth in daily

departures during the whole twenty year period of the forecastmeans that by 2019 the airlines will be making 90 per cent more

flights than today.

Despite the anticipated increase in average flight distance during the

next twenty years, the GMF predicts that airlines will be able to

increase the average number of annual flights made by each aircraftfrom 1,561 to 1,603, a gain of nearly three per cent. So to achieve

the forecast 90 per cent increase in annual departures, the airlines

will have to increase the numbers of aircraft they operate by 85 per

cent (1.85 x 1.03 = 1.90). This represents an average annual

increase of 3.1 per cent in the number of aircraft operated. This inturn means that to achieve the projected annual 4.1 per cent increase

in installed seats, they will have to increase average aircraft

capacity by 1.0 per cent per year, from 179 seats per aircraft at end

1999 to 191 in 2009 and 217 in 2019, an increase of 38 seats per

aircraft over the twenty-year period.

Once again, the global average covers a wide range of regionalvariations as well as differences within the different regions. Thus

airlines in the Americas are expected to continue to carry below-

average loads and remain well below the world average in terms of

seats per aircraft. Airlines in Africa and the Middle East, driven bythe need to increase frequencies, will increase aircraft size only

marginally. But in contrast the Asia-Pacific airlines, already well

183

242

182

146

214

157

198

179

191

307

215

170

224

189

217

243

140

160

180

200

220

240

260

280

300

The Asia-Paci f ic air l ines w i l l lead the w ay ina i rcraf t s ize growt h

2019

1999

Africa Europe Middle East P.R.China

Asia-Paci fic Latin America North AmericaWorld average

Seats

per aircraft

2009

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above the world average, will have to increase the average size of

their aircraft by no less than 65 seats - mostly during the seconddecade of the forecast - if they are to meet strongly growing demand

in an increasingly congested environment. Small aircraft tend to

make more flights than large ones, so that any forecast growth inaverage seats per departure will generally require a more rapid

increase in average seats per aircraft. The GMF predicts that

average seats per departure will increase by just 32 seats, from 158

at end 1999 to 190 in 2019. Thus during the twenty-year forecast

period, average seats per aircraft will need to increase by 19 per

cent more than average seats per departure.

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6. Flee t renew al

Airline fleet forecasters commonly assume that, once introduced

into the passenger fleet, an aircraft will remain in passenger service

until the end of its economic life. In fact many airlines tend tomaintain a young fleet, and replace their passenger aircraft much

earlier.

Each time an airline replaces a passenger aircraft, and whenever an

operating lease expires, this creates an opportunity to introduce a

new aircraft into the airline's fleet, while the aircraft replaced -

assuming sufficient economic life remains - becomes a candidate

either for conversion to a freighter or to be recycled back into the

world passenger fleet through the used aircraft or operating lease

markets.

The methodology used in the GMF to determine the numbers ofaircraft replaced, recycled, converted to freighters or (ultimately)

withdrawn from airline service, is described in Appendix F. It

reflects as far as possible each individual airline's approach to fleetrenewal. Where no clear pattern of behaviour is apparent, it assumes

that passenger aircraft are replaced by their first operator at a

regional default age from new which varies from 20 years for

airlines in Asia-Pacific to 29 years for airlines in Latin America.

The overall result is an average replacement age from new of 24

years.

Air l ines w i l l cont inue to replace passengera i rcraf t before the end of thei r economic l i fe

0

5

10

15

20

25

30

Eas

tern

Europe

Wes

tern

Europe

Nort

hAmerica

As

ia-Pac

ific

Indian

Su

bcon

tinen

t

P.R.C

hina

Nort

hAfrica

Res

to

fAfrica

MiddleEas

t

La

tin

America

24 years

worldaverage

Default replacement age

On this basis, the GMF predicts that by end 2019 only 1,338 (13 per

cent) of the 10,349 passenger aircraft with at least 70 seats in

service with the GMF airlines at end 1999 will still be in service

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with their current operators.

Of the 4,515 passenger aircraft replaced by end 2009:

l 1,644 will be recycled back into passenger service with other

operators;

l 1,166 will be converted to freighters (see Chapter 9), and;

l 1,705 will be definitively withdrawn from airline service, to bescrapped or to enter VIP, government or other non-airline use.

Another 4,496 passenger aircraft will be replaced during the period

2010 - 2019. Of the total of 9,011 aircraft replaced by end 2019:

l 3,174 will be recycled;

l 2,389 will be converted to freighters, and;

l 3,448 will be withdrawn from airline service.

In the case of dedicated freighters, the GMF assumes they will

remain in service until the end of their economic life, which is

estimated to be 37 years since new for standardbody aircraft and 35years for widebodies. On this basis, a total of 703 freighters will be

retired during the period 2000 - 2009, and another 450 during the

period 2010 - 2019.

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7. Wor ld passenger f lee t deve lopment

At end 1999 the fleet of passenger jets with at least 70 seats

operated by the airlines in the GMF included a total of 10,349

aircraft with 1,852,600 installed seats. This will increase to 14,815aircraft with 2,834,300 seats at end 2009, and to 19,173 aircraft with

4,168,700 seats at end 2019.

Over the whole twenty-year period, the PRC airline fleet will grow

the fastest, more than tripling from a total of 490 aircraft at end

1999 to nearly 1,600 at end 2019. At the other extreme, the airlines

0

5,000

10,000

15,000

20,000

1999 2009 2019

+ 3.7 % per annum

10,349@ 179

19,173 a/c@ 217 seats

The GMF passenger f leet w i l l almost double

Number of aircraft

14,815

@191

+ 2.6 % per annum

-2 -1 0 1 2 3 4 5 6 7

Avg. a/c size No. of aircraft in service

World capacity 4.1%

Asia-Pacific 4.5%

Middle East 3.4%

Europe 4.5%

Latin America 3.7%

Africa 3.7%

P.R. China 7.1%

1.0

1.0

1.2

0.9

0.2

0.8

0.2

3.1

6.0

3.7

2.9

3.2

2.3

3.2

3.5

N. America 3.2%

0.8

High aircraft s ize grow th in Asia-Paci f ic ; highf leet grow th in t he PRC

Average annual growth(%)

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Higher growth in air travel markets outside the USA means that the

percentage of the world passenger fleet operated by airlines based in

North America will decline from its current 43 per cent to 36 percent in 2019, while the shares of airlines in Europe and the Asia-

Pacific region (including the PRC) rise to respectively 30 and 22 per

cent. In terms of capacity, the most spectacular gain will be made

of North America will grow their fleet by less than 60 per cent,

from about 4,400 aircraft today to 6,900 in twenty years' time. Thepassenger fleets of the other regions will almost double, growing at

average annual rates in the range 2.9 to 3.7 per cent.

Europe

27%

Asia-Pacific

19%

P.R.China

5%


1.85 million seats


4.17 million seats

North America

38%

Rest of World

11%

Europe

30%

Asia-Pacific

20%

P.R.China

9%

North America31%

Rest of World

10%

Air l ines in Europe & Asia-Paci f ic * w i l l operateas many seats as those in North Americ a

(* including PRC)

Asia-Pacific

14%

Europe

27%

P.R.China

5%


10,349 aircraft


19, 173 aircraft

North America

43%

Asia-Pacific

14%

Europe

30%

P.R.China

8%

North America

36%

Latin America

6%

North Americ an air l ines share of the w orldf leet w i l l decrease

Middle East

3%

Africa

3%

Latin America

7%

Middle East

3%

Africa

3%

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World passenger fleet development

by the Asia-Pacific and PRC airlines, whose share of world seats

will grow from 24 to 29 per cent. By 2019, airlines based in Europeand in Asia-Pacific will both be operating nearly as many seats as

those in North America. Only ten per cent of world seats will be

operated by airlines in Africa, the Middle East and Latin America.

As the average seat-count of aircraft in service continues to grow,

the composition of the world passenger fleet will progressively shift

towards larger aircraft seating capacities. Currently, almost three-quarters of the jetliners with at least 70 seats in service with the

GMF airlines have fewer than 210 seats. In twenty years' time this

share will be down to 59 per cent.

210 & 250

11%

100 to 17 5

71%

300, 350 & 400

15%


10,349 aircraft


19, 173 aircraft

70 & 85

2%

> 400

400

6%

Widebodies w i l l increase their share of thew orld f leet

210 & 250

15%

100 to 175

55%

300, 350 & 400

28%


1.85 million seats


4.17 million seats

70 & 85

1%> 400

1%

210 & 250

20%

100 to 175

36%

300, 350 & 400

24%

70 & 85

1%> 400

18%

Very large a i rcraf t w i l l prov ide a s igni f icant share of future w orld airl ine capaci t y

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The contribution made by very large aircraft is best illustrated by

the distribution of seats among the different aircraft seat categories.The proportion of fleet capacity provided by aircraft in seat

categories above 400 seats will increase from under one per cent

today to 18 per cent in 2019. Nevertheless, the GMF predicts that intwenty years' time these very large aircraft will account for only 6.4

per cent of the world passenger jet fleet; less than the 7.3 per cent of

the current fleet which is represented by the 753 passenger and

combi 747s in service today.

Detailed results of the GMF passenger fleet forecast to end 2009and end 2019 are presented in Appendix G. This shows the number

of aircraft of different types in service and on firm order at end

1999, together with the associated seat-counts, as well as the

number of these aircraft and seats which are forecast to be replaced

during the forecast period. Projected deliveries beyond those in theend-1999 backlog are shown for each of the 15 neutral aircraft

seat categories.

Care is needed in reading the results. The GMF does not, forexample, forecast delivery of just 43 A340-600s through 2019. In

addition to the 43 aircraft on firm order at end 1999, the A430-600

will compete to supply part of the demand forecast for more than

1,900 aircraft in the 400-seat and adjacent neutral seat categories.

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8. Dem and fo r passenger a i rc ra f t de l i ver ies

Global summary

During the next ten years the GMF airlines will need to add 4,466

aircraft with 981,700 seats to accommodate traffic growth, and toacquire another 4,515 aircraft with 772,900 seats for fleet renewal.

Thus during this period the airlines will need a total of 8,981

passenger aircraft with 1,754,600 seats.

During the following decade they will require a further 4,358

aircraft with 1,334,400 seats for growth and 4,496 aircraft with

839,000 seats for fleet renewal, leading to demand for delivery of a

total of 17,835 passenger aircraft with 3,928,000 seats through2019.

The biggest share (35 per cent) of deliveries will go to airlines in

North America. European airlines will take 30 per cent, and Asia-

Pacific (including PRC) airlines 24 per cent, leaving just 11 per cent

for airlines in Latin America, Africa and the Middle East.As described in Chapter 6, 1,644 of the aircraft required through

2009 and 3,174 of those needed through 2019 will be recycled

aircraft acquired through the used aircraft or operating lease market.

Consequently the manufacturing industry can expect to deliver to or

for the GMF airlines a total of 7,337 new passenger and combi

aircraft with at least 70 seats during the next ten years, and a total of

14,661 new aircraft during the next twenty years.

The recycled aircraft will provide 307,200 seats through 2009 and636,000 seats through 2019, leaving respectively 1,447,400 seats

and 3,292,000 seats to be delivered in new aircraft. So the average

0

5,000

10,000

15,000

20,000

1999 2009 2019

Growth

Replaced

+ 3.7 % per annum

10,349 @ 179

19,173 @ 217

1,338 @ 180

9,011 @ 179

8,824 @ 262

Nearly 18,000 aircraft w il l be required for f leetrenewal and growth

17,835

deliveries

Number of aircraft

+ 3.1 % per annum

14,815 @ 191

5,834 @ 185

4,515 @ 171

4,466 @ 220

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capacity of new aircraft delivered during the first ten-year period

will be 197 seats, increasing to an average 252 seats per aircraft

during the following decade.

Of the new passenger aircraft delivered through 2009, 61 per cent

with 68 per cent of the seats will be acquired for growth and 39 per

cent with 32 per cent of the seats for fleet renewal. For the whole

twenty-year period, 60 per cent of the new aircraft delivered, with

70 per cent of the seats, will be for growth, and 40 per cent of theaircraft with 30 per cent of the seats for fleet renewal.

Most smal l je t l iners w i l l be needed in NorthAmerica & Europe; most very large aircraft inAsia-Pacific

0%

20%

40%

60%

80%

100%

North America 35%

Europe 30%

Asia-Pacific 15%

P.R.China 9%Latin America 6%

Middle East 2%

70 & 85 100 to 175 210 & 250 300, 350 & 400 > 400

Seat category

Per cent of aircraft delivered

Africa 3%

0

5,000

10,000

15,000

20,000

1999 2009 2019

Growth

Replaced

+ 3.7 % per annum

10,349 @ 179

19,173 @ 217

1,338 @ 180

5,837 @ 167

8,824 @ 262

Almost 14,700 new passenger aircraft w i l l bedelivered

3,174 @ 200

Recycled

14,661new aircraft

Number of aircraft

+ 3.1 % per annum

14,815 @ 191

5,834 @ 185

1,644 @ 187

2,871 @ 162

4,466 @ 220

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Demand for passenger aircraft deliveries

The new aircraft will be distributed among the different seatcategories as follows:

ll 437 (through 2009) and 692 (through 2019) aircraft in the 70

and 85-seater categories. The GMF makes no attempt at a

comprehensive forecast of demand for these small aircraft. Many

more will be needed for regional operations and by smaller airlines

and current turboprop operators not covered in this study. However

operations by these aircraft in the fleets of major airlines have to bestudied in order to define the lower bound of operations by 100-seaters;

ll 4,330 (through 2009) and 7,570 (through 2019) aircraft in the

100, 125, 150 and 175-seater categories , where the outstanding

sales success of the A318, A319, A320 and A321 reflects airlines'

recognition of the tangible cost and revenue benefits offered by

these advanced and efficient aircraft;

ll1,127 (through 2009) and 3,046 (through 2019) aircraft in the210 and 250-seater categories. A300s and A310s have sold well in

the past, but in recent years sales of all aircraft types in this categoryhave slowed down. The A330-200 has now made a strong start, and

Airbus foresees great potential for this and other A330 familymembers;

ll1,083 (through 2009) and 2,118 (through 2019) aircraft in the

300, 350 and 400-seater categories, where the larger A330-300

and the A340 family have progressively built a dominant share ofannual orders, likely to be reinforced once the stretched A340-500

and -600 enter service in 2002;

ll360 (through 2009) and 1,235 (through 2019) aircraft in seat

categories above 400 seats. The GMF confirms that if the airlines

692

7,570

2,118

1,235

437

4,330

1,127 1,083360

3,046

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

70 & 85 100 to 175 210 & 250 300, 350 & 400 > 400

Seat category

Number of aircraft (total demand - recycled)

New passenger aircraft del iver ies w i l l average733 per ye ar ...

2010 - 2019 7,324

2000 - 2009 7,337

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are to continue profitably to meet growing demand for low-cost air

travel in the face of intensifying global competition and increasingcongestion, they will need substantial numbers of a new generation

of aircraft like the A3XX, larger and more economical than

anything flying today. Despite a small reduction in projectedtwenty-year RPK growth compared with last year's forecast, this

year's GMF identifies a need for slightly more very large aircraft.

This suggests that demand for aircraft in this category will prove to

be robust in the face of changing market conditions.

Based on the current catalogue flyaway prices (2000 $) of currentaircraft types, this business will be worth a total of $526 billion

through 2009 and $1.22 trillion through 2019.

The greatest business volume will be provided by the 100, 125, 150and 175-seater category of the A318/A319/A320/A321. This will be

closely followed by the 300, 350 and 400-seater category of the

A330-300 and A340 family, which will account for 31 per cent of

the total during the first decade and 26 per cent over the full twenty-year forecast period. An outstanding 23 per cent of the twenty-year

business volume will be accounted for by very large aircraft in seat

categories above 400 seats, a market now targetted by Airbus with

the all-new A3XX. At the other end of the scale, the GMF

understates demand for 70 and 85-seaters because many more of

these small regional jetliners will be needed by airlines outside theGMF's domain.

The operation of the GMF airlines' passenger jet fleet will continue

to be highly concentrated. By 2019, flights from just the Top 20 out

of 1,896 airports served worldwide - led by Chicago O'Hare and

327.4

280.7

319.3

281.8

177.0

105.0

161.4

77.4

8.45.20

50

100

150

200

250

300

350

70 & 85 100 to 175 210 & 250 300, 350 & 400 > 400 Seatcategory

a business w orth $1.2 t r i l l ion2000 $ (billion)

1% 34% 20% 31% 15%

20 00 - 2019

20 00 - 2009

1% 27% 23% 26% 23%

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Los Angeles International - will absorb the utilisation of 25 per cent

of the aircraft, and half the aircraft will be used on flights from theTop 62 airports.

The table shows the Top Ten airports ranked by the numbers of

daily departures, aircraft used and seats offered by the GMF fleet:

Results by mega seat category

- Regional jets

The GMF does not attempt a comprehensive forecast of demand for

regional jets. Many more of these small aircraft will certainly be

needed for operations not covered here. However regional

operations of 70 and 85-seaters by major carriers have to be studied

in order to define the lower bound of operations by 100-seaters. The

number of regional jets concerned will triple during the forecast

period, growing from 254 at end 1999 to 763 at end 2019; anincrease of 509. During the same period almost the whole of the

current fleet of these aircraft will be replaced, leaving just eight still

in service with their current operators in twenty years' time. Of the

246 aircraft replaced, 63 will be recycled back into the worldpassenger fleet through the used aircraft or operating lease markets.

This will create a need for delivery through 2019 of 692 new

aircraft (380 70-seaters and 312 85-seaters) to potential users in the

GMF.

Rankings of Top Ten airports in 2019

Daily departures

1. Atlanta

2. Chicago OHare

3. Dallas

4. London Heathrow

5. Frankfurt

6. Paris CDG

7. Los Angeles

8. Amsterdam

9. Detroit

10. St. Louis

Number of aircraft

1. Chicago OHare

2. Los Angeles

3. London Heathrow

4. Atlanta

5. Dallas

6. Frankfurt

7. Paris CDG

8. Amsterdam

9. New York JFK

10. Newark

Number of seats

1. London Heathrow

2. Los Angeles

3. Tokyo Narita

4. Frankfurt

5. New York JFK

6. Chicago OHare

8. Atlanta

9. Singapore

10. San Francisco

7. Paris CDG

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- Mainline single-aisles

The GMF airlines' fleet of 100, 125, 150 and 175-seaters will grow

from some 7,330 aircraft at end 1999 to 10,490 at end 2019. During

the period, 6,350 aircraft (87 per cent of the current fleet) will be

replaced, with some 1,930 aircraft being subsequently recycled back

into the passenger fleet and 4,420 withdrawn from passenger

service. This will create a need for delivery during the next twentyyears of a total of 7,570 new aircraft in this category.

40 per cent of these will be 100 and 125-seaters, and 60 per cent

The GMF covers only a port ion of globalregional jet operators

0

100

200

300

400

500

600

700

800

900

1999 2019

Growth

Repl.

+ 5.7 %

per annum

763 @ 77

8

183

254 @ 7 3

63Rec.

692 new

aircraft

509

Fleet development

312

380

0

50

100

150

200

250

300

350

400

70 85

Number of new aircraft

Seat category

Mainl ine single-aisles w i l l grow less rapidly . ..

2,0771,943

2,496

1,054

0

500

1,000

1,500

2,000

2,500

3,000

100 125 150 175


Seat category

0

2,000

4,000

6,000

8,000

10,000

12,000

1999 2019

Growth

Repl.

+ 1.8 %per annum

10,486 @ 144

983

4,417

1,933Rec.

7,570 new

aircraft

3,153

Fleet development

7,333

@ 140

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150 and 175-seaters. As a result, the average capacity of the sub-

fleet will increase slightly, from 140 to 144 seats per aircraft.

Operation of these aircraft will be widely dispersed. By 2019, no

less than 1,586 of the 1,896 airports served by the GMF airlines willbe served by aircraft in this category, with flights from the Top 20

airports using a quarter of the aircraft, and half the fleet being used

on flights from 73 airports, led by Dallas and Chicago OHare. 44per cent of these aircraft will be in operation in the large fleets(averaging 170 aircraft) of the North American airlines and 27 per

cent will be used by European airlines (34 per cent of the operators).

The remaining 28 per cent will be spread in the other regions.

- 200/250-seaters

The GMF airlines' fleet of these aircraft is expected to grow at an

average annual rate of 5.9 per cent during the next twenty years,from fewer than 1,200 aircraft at end 1999 to nearly 3,700 at end

2019. With almost 90 per cent of their current fleet being replaced,

and only some 500 aircraft being recycled back into passenger

service, the GMF airlines will need delivery of some 3,000 new

aircraft in this category during the next twenty years.

About 60 per cent of these will be 210-seaters, and 40 per cent 250-seaters. As a result, the average capacity of this sub-fleet will

decline slightly, from 234 seats per aircraft to 229. Much of this

demand is likely to be supplied by versatile aircraft such as A321s

and smaller members of the A330 family.

221 airlines 10,486 aircraft

w ith m ore than 40% f low n by air l ines inNorth America

Asia-Pacific

14%

Europe

34%P.R.China

8%

North America

12%

Latin America

16%

Middle East

5%Africa10%

Asia-Pacific

7%

Europe

27%

P.R.China

8%

North America

44%

Latin America8%

Middle East

2%

Africa

3%

GMF mainline single-aisle fleet in 2019

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Operation of these aircraft will be relatively concentrated. By 2019,

they will be serving just 735 of the airports served by the GMF

airlines. Flights from the Top 20 airports will use one-third of the

aircraft, and half the fleet will be used on flights from 44 airports,

led by Chicago O'Hare and Los Angeles International.

In 2019, 180 airlines will be operating 200/250-seaters. Almost 70

per cent of the aircraft will be in service with airlines in Europe and

North America. 35 per cent of operators, flying 38 per cent of theaircraft, will be in Europe. Only 12 per cent of operators will be in

North America, but their large fleets (averaging 50 aircraft per

airline) mean that they will be operating 30 per cent of the aircraft.

The f leet of 200/250-seaters w i l l m ore t hantr iple ...

1,282

1,764

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

210 250


Seat category

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1999 2019

Growth

Repl.

+ 5.9 %

per annum

3,668 @ 229

126

546

496Rec.

3,046 new

aircraft

2,500

Fleet development

1,168

@ 234


w ith air l ines in Europe the largest users

Asia-Pacific

17%

Europe

35%

P.R.China

9%

North America

12%

Latin America12%

Middle East6%

Africa

9%

Asia-Pacific

13%

Europe38%

P.R.China

8%

North America

30%

Latin America

5%

Middle East3%

Africa

3%

GMF 200/250-seater fleet in 2019

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- Mid-sized & large twin-aisles

The GMF fleet of 300, 350 and 400-seaters will nearly double

during the next twenty years, from nearly 1,600 aircraft at end 1999

to more than 3,000 at end 2019. With 86 per cent of the current fleet

being replaced, and fewer than 700 aircraft re-entering passengerservice with other operators, there will be a need for delivery of atotal of about 2,100 new aircraft in this category.

Half of these will be 300-seaters, with the rest split evenly between

350 and 400-seaters. Consequently, the average capacity of the

current in-service fleet will grow from 331 to 336 seats per aircraft.

2,100 new mid-sized & large tw in-aisles w i l l be needed ...

576506

1,036

0

200

400

600

800

1,000

1,200

300 350 400


Seat category

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1999 2019

Growth

Repl.

+ 3.4 %

per annum

3,021 @ 336

221

655

682Rec.

2,118 new

aircraft

1,463

Fleet development

1,558

@ 331


w ith Asia-Pacif i c & the PRC t he largestregional mark et

Asia-Pacific

20%

Europe

33%

P.R.China

11%

North America

14%

Latin America

8%

Middle East

6%Africa

7%

Asia-Pacific24%

Europe

32%

P.R.China

9%

North America

25%

Latin America

3%

Middle East

5%

Africa2%

GMF mid-sized & large twin-aisle fleet in 2019

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Operation of these large aircraft will be highly concentrated. By

2019 they will be serving only 490 (a quarter) of all the airportsserved by the GMF fleet. Flights from the Top 20 airports will use

42 per cent of the aircraft, and half the fleet will be used on flights

from just 27 airports, led by London Heathrow and Frankfurt.In 2019, one-third of the world fleet of these aircraft will be inservice with airlines in Asia-Pacific, and another third with airlines

in Europe, compared with just a quarter with airlines in North

America.

- Very large aircraft

By definition, the market for aircraft larger than anything flying

today is driven by growth. Currently only 36 high-density aircraft

are in service with more than 500 seats, with an average capacity of

551 seats each. By 2019 all of these aircraft will have beenwithdrawn from passenger service. At the same time the airlines

will need a total of 1,235 very large and economical aircraft to

accommodate traffic growth on highly-travelled routes at projected

levels of frequency, and to meet intensifying global competition.

The need for very large aircraft builds progressively throughout the

forecast period; 360 will be needed in ten years' time.

Despite the fact that Airbus forecasters have reduced theirprojections of long-term passenger traffic growth by one-tenth of a

percentage point, the 575 500-seaters, 404 600-seaters, 223 800-

seaters and 33 1,000-seaters for which a need is forecast in twentyyears' time represent a slight increase compared with last year's

GMF. (Note that the maximum exit-limited seat count in a nine-

door A3XX is 990 seats.)

Demand w il l develop for more t han 1,200 verylarge airc raft . ..

33

404

223

575

0

100

200

300

400

500

600

700

500 600 800 1000


Seat category

0

200

400

600

800

1,000

1,200

1,400

1999 2019

Growth

Repl.

(+ 19.3 %

per annum)

1,235 @ 600

36

1,235 new

aircraft

1,199

Fleet development

36 @ 551

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By 2019 58 airlines will be operating very large and economical

aircraft. 28 of these, or almost half the total, will be based in theAsia-Pacific region (including the PRC), making this geographical

group by far the biggest users of these aircraft. Operators in Europe

and North America will together represent only 37 per cent of themarket.

The average of 21 very large aircraft per airline covers a widespread, from 108 aircraft in the fleet of the largest user to just a

single aircraft at the bottom. And, as always, the world fleet of these

Demand for very large aircraft is highlyconcentrated

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 10 20 30 40 50 60

700

600

Cumulated

average

seats

10 airlines need59% of aircraft61% of seats

20 airlines need79% of aircraft81% of seats

Number of airlines

Percent of total demand for aircraft larger than 400 seats


w ith Asia-Pacif ic dominat ing demand

Asia-Pacific31%

Europe

19%

P.R.China

17%

North America16%

Latin America

7%

Middle East5%Africa

5%

Asia-Pacific

44%

Europe

20%

P.R.China

13%

North America

17%

Latin America

2%

Middle East

1%

Africa

1%

GMF very large aircraft fleet in 2019

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The large aircraft w i l l be distr ibuted simi lar lyto todays passenger 747s

0

20

40

60

80

100

> 400 seater in 2019

747 in 1999

Airlines

Aircraft per airline

20 40 60

aircraft will be highly concentrated. Almost 60 per cent of the

aircraft will be with just the ten largest users, each of which willneed at least 50 aircraft, and three-quarters with the 19 airlines

which will need more than 20 aircraft each.

The distribution by individual fleet size is actually very similar tothe distribution of the world's current passenger 747 fleet. A total of753 passenger 747s are today operated by 47 airlines, with fleets

ranging in size from 76 aircraft to just one. This should ensure the

eventual development of an active secondary market for these large

aircraft.

The operation of very large aircraft will also be highly concentrated.

Out of the 10,013 route sectors studied in the GMF, just 230 will by2019 absorb the utilisation of at least one very large aircraft, and

half the capacity of the entire fleet of these aircraft will be used on

route sectors linking just 56 airport-pairs. Out of the Top Ten routes

served by these very large aircraft, as measured by aircraft usage,only the routes from London Heathrow to New York Kennedy and

Los Angeles do not serve the Asia-Pacific region, which once again

emerges clearly as the main driver behind demand for these aircraft.

Five of the Top Ten routes serve Heathrow, and four serve Los

Angeles and Tokyo Narita. By 2019 these Top Ten routes alone will

use the capacity of about 170 very large aircraft.

The very large aircraft will have to be extremely versatile. The

distribution by stage length of the 2019 fleet clearly shows that theywill be used on a wide spread of applications, including a number of

high-density domestic and local routes - primarily in Asia; several

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As a final measure of concentration, the GMF predicts that by 2019flights from just 94 of the 1,896 airports served by the GMF airlines

will absorb the utilisation of at least one very large aircraft, while

the capacity of more than half the fleet will be used on flights from

just the Top Ten airports. High traffic flows on international routes

from congested Tokyo will make Narita the largest user of very

large aircraft, with these routes utilising the capacity of 116 of these

Very large a i rcraf t w i l l be used across theent i re range spectrum

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10 %

500 2000 3500 5000 6500 8000 9500 11000 12500

Percent of aircraft operated at range

Range band (500 km steps)

Eight of the Top Ten large aircraftroutes wil l serve the Asia-Pacif ic region

LAX

In 2019, the Top Ten airport-pairs alone will use 168 out of 1,235 very

large aircraft

In 2019, the Top Ten airport-pairs alone will use 168 out of 1,235 very

large aircraft

NR TJFK

LHR

SIN

TPE

SYD

HK G

15

Number of aircraft

20

1518

16

16

17

16

20

OR D15

major intra-Asian and transatlantic routes; and a variety of

intercontinental routes largely serving the Asia-Pacific region.

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Six of t he Top Ten large aircraft airports w i l l be in Asia-Pacific

1NR T(116)

10SYD(35)

3HK G

(83)

5SIN(56)

2LHR(96)

8FRA(44)

7BK K

(47)

4LAX(74)

6JFK

(50)

9TPE(38)

RankAirport

(no. of VLAs)

In 2019, more than half of the worlds fleet of 1,235 very large aircraft will

be used on flights from just the top ten airports

In 2019, more than half of the worlds fleet of 1,235 very large aircraft willbe used on flights from just the top ten airports

aircraft in 2019. Narita will be closely followed by slot-constrained

London Heathrow, which will need the capacity of 96 very largeaircraft to handle the growth in traffic projected over the next

twenty years.

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9. A i r c argo fo recast

Global Summary

Over the next twenty years participants in the world air cargo

industry, including the 187 operators of today's 1,510 dedicatedfreighters, will face the enormous opportunities and challenges

presented by an increasingly integrated and fiercely competitive

global economic environment. These trends, as well as continuing

developments in manufacturing systems and in the emerging new

information economy, will create robust growth in airfreight

demand. In response, the world freighter fleet will grow to 3,449

aircraft by 2019. At the same time, intense competition will mean

that operators will need to be significantly more efficient both in the

air and on the ground.

During the twenty-year period of the GMF, 1,153 freighters will beretired from service as they reach the end of their economic lives.

The need to replace them, together with the acquisition of 1,939

additional aircraft to accommodate airfreight growth, will combineto create demand for a total of 3,092 freighters. Three quarters of

this demand will be satisfied by lift capacity drawn from the

passenger fleet through passenger-to-freighter conversions, leaving

a requirement for delivery of 703 factory-built freighters worth

approximately $96 billion (2000 $).

Compared with the 1999 GMF, the 2000 edition is slightly more

optimistic about long-term demand for factory-built freighters in the

upper mid-sized (50-80 tonne) and largest (>80 tonne) aircraft

segments. But there is a significant reduction in anticipated demand

in the small (

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segments, reflecting the difficulty operators will experience

justifying the high acquisition costs of new aircraft in the face ofmodest production levels. The overall result is a slight decrease in

total demand for new freighters.

Interestingly, the increase in size of the world freighter fleetaccelerates slightly in the second half of the forecast period. This isthe result of a reduction in the rate of growth of both average

aircraft capacity and productivity, which more than offsets the

deceleration in traffic growth as markets progressively mature.

Faster aircraft capacity growth in the decade through 2009 reflectsthe tendency of operators to reduce unit costs by increasing aircraft

capacity when they replace the large numbers of small and mid-

sized freighters which will be retired during this period, while the

superior performance characteristics of current-generation dedicated

freighters, especially factory-built aircraft, result in a substantialincrease in productivity coinciding with the same replacement

wave. Overall, therefore, the world freighter fleet grows at an

average 4 per cent per year to 2009 and at an average 4.4 per cent

per year to 2019.

More information about the cargo forecast methodology, together

with the relevant data sources used, can be found in Appendix H.

Tables summarising the airfreight and capacity forecast results canbe found in Appendix I.

Airfreight traffic forecast

Globalisation and its resulting economic growth will continue to

drive airfreight demand in the long term. The accession of China

into the World Trade Organisation represents a continuation of thistrend, with virtually all nations now embracing trade and investment

as vehicles for long-term growth. Paradoxically, while growth will

drive airfreight, airfreight will also drive growth. Advanced

manufacturing systems, which depend on global procurement andrely heavily on fast efficient airfreight as well as advanced

communication systems, have been contributing to productivity-led

economic growth. Moreover, it is widely recognized that thepresence of an efficient air transport infrastructure offers a stronginducement for companies contemplating investment in productive

capacity in a particular location.

This edition of the GMF analyses 120 directional airfreight markets,

significantly more than the 36 studied in 1999. Detailed results are

available upon request in a separate comprehensive study. Overall,the GMF predicts that airfreight, driven by growth in time-sensitive

services in particular, will triple over the next twenty years, growing

at a robust average annual rate of 5.7 per cent. Traffic will grow at a

faster average 6.1 per cent per year through 2009, and then mature

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Air cargo forecast

to an average 5.3 per cent per year growth through the following

decade.

The largest and fastest growing airfreight markets are, and will

remain, those linking Europe and North America to the Asia-Pacific

region. Together, these markets are expected to represent over 40

per cent of global airfreight in twenty years' time, generating the

main demand for long-range large widebody freighters. The globalshare of shorter-range more mature markets like the domestic US

will gradually erode to about 11 per cent in 2019 from 15 per cent

today, dragging down demand for, and the global share of, shorter-range smaller freighters.

Introduction of a new generation of fast ships on the North Atlantic

cargo market is not expected to have a significant impact on

airfreight growth, but rather to erode the share of freight carried by

direct ocean liner service. While new fast ship services are expected

to narrow the very wide service gap between the standard airfreight

product and the top ocean service in terms of speed, security and

reliability, an overwhelming percentage of North Atlantic airfreight

is currently, and will continue to be, handled by very competitive

and efficient point-to-point belly/combi service.

Belly/combi & dedicated freighter traffic forecast

In general, passenger baggage boarding priorities limit the amount

of useable space available for cargo on passenger aircraft.

Nevertheless in 1999 the passenger aircraft system carried 84.2

billion FTKs, representing 55 per cent of global airfreight traffic,

and playing a crucial role in the transport of high-value

Global air f reight w i l l more than tr iple

0

100

200

300

400

500

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

FTKs (billion)

Europe -

Asia-Pacific

North America -

Asia-Pacific

US domestic

Eur . - Lat.A m.

NA - Lat.Am .

Intra Asia.

Other flows

Europe -

North America

7.0% p.a 6.1%

5.3%

5.7% p.a

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manufactured and semi-processed goods to market locations around

the world. The GMF assumes that, largely because of thecompelling economics, airlines will continue aggressively to pursue

the incremental profit potential from their available airfreight

capacity in passenger aircraft. The extent to which capacity in thepassenger aircraft system can grow will be defined by the future

development of the passenger aircraft fleet. As a result the GMF

predicts that airfreight handled by passenger and combi aircraft will

grow at an average 5.4 per cent per year to 2019. Reflecting the

progressive introduction of more cargo-capable passenger aircraft

over the forecast period, this represents slightly faster growth than

the forecast average 4.9 per cent increase in passenger traffic but isslower than overall global airfreight growth.

The extent to which belly capacity is available on any particular

airfreight market has a significant impact on overall yields paid by

shippers. Despite differences in the levels of service, the abundance

of marginally-priced belly capacity on the North Atlantic, forinstance, tends to push overall yields lower, whereas the shortage of

belly capacity out of Asia tends to push yields upwards. In any

event the portion of airfreight not handled by passenger aircraft, aswell as airfreight demanding a level of service superior to that

offered by belly/combi capacity, will need to be served by dedicated

freighters.

Consequently, airfreight traffic handled by dedicated freighters will

need to grow faster than the global average. The growth gap

between overall airfreight growth and the portion handled by the

passenger aircraft system means that dedicated freighter services

Passenger aircraft w i l l cont inue t o play acruc ial role in air f reight t ransport

0

50

100

150

200

250

300

350

400

450

500

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017

FTKs (billion)

Airbus projectiontotal cargo traffic

5.7% p.a.

Belly freight5.4% p.a.

Dedicated freightersanticipated traffic

6.1% p.a.

Total cargotraffic history

7.0% p.a.

6.3%

6.0%

6.1%

5.3%

6.0%

4.8%

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Air cargo forecast

will need to grow at an average 6.1 per cent per year over the next

twenty years, from 68.2 billion FTKs in 1999 to 223.5 billion in2019. As a result of a widening growth gap, traffic growth attributed

to dedicated freighters will experience more gradual maturation

than overall growth. So, over the next ten years dedicated freightertraffic will grow at an average 6.3 per cent, slowing slightly to an

average 6.0 per cent in the ten-year period thereafter.

The GMF freighter forecast does not distinguish between integratedand non-integrated service growth, but nevertheless anticipates that

future airfreight growth will overwhelmingly accrue to time-

sensitive service. Generally, integrators offer the premium level of

service and can therefore command the highest yields, but are

somewhat less flexible in their operations than are forwarders.

Nevertheless, recent trends in the structure of the industry suggest

that the boundaries between these conventional groups are gradually

eroding, with both demonstrating the product development and

operational skills needed to capture the emerging growthopportunities, whether all the elements in the logistics chain are

owned or whether they are assembled together and offered

seamlessly by a contractor.

Freighter fleet retirements

In future, additional lift capacity will also be needed to replacecapacity currently in service as it reaches the end of its economic

life. Based on the demographics of the current freighter fleet, two

distinct retirement peaks can be anticipated over the forecast period.

The first will take place from 2003-2007, coinciding with the need

Air f reight industry struc ture is converging

ShippersOrigin

Integrator

Agent

Airline

Forwarder

ConsigneesDestination

Customer - transportinterface

TransportMode(s)

Transport - consigneeinterface

Integratedcarriers

Forwarders

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to replace large numbers of small freighters like converted 727s and

lower mid-sized freighters like DC-8s and 707s. The secondretirement peak will occur in the second half of the forecast period,

coinciding with the need to replace first generations of factory-built

large dedicated freighters.

Financing the cost of acquiring replacement capacity will prove to

be a major challenge for some operators, particularly those whosehistorical orientation towards slower-growing opportunistic charter

services means that they are able to achieve only marginal asset

utilisation. Some operators will be forced to change strategy,

focussing resources on faster-growing time-sensitive services with

highly reliable and performance-enhanced newer equipment. A few

others will be forced to close down or merge with other weaker

players in efforts to achieve meaningful economies of scale and

improved asset utilisation. This will provoke a wave of

consolidation.

Key operational parameters

While additional lift capacity will be needed to accommodate trafficgrowth and to allow for fleet renewal, future freighters will also

need to work harder to assure profitable operations in the face of

pricing and competitive pressures. The GMF predicts that in twenty

years' time each tonne of freighter capacity in service will generate

approximately 1.21 million FTKs annually, compared with 0.99

million today, an increase of 22 per cent. Most of this productivity

improvement will be achieved through an increase in the average

number of annual flight hours* per aircraft from 1,542 in 1999 to

Small f reighters w i l l be ret i red f i rst

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

< 30 tonnes 30 - 50 tonnes

50 - 80 tonnes > 80 tonnes

Based on retirement age 37 years for standardbodies 35 years for widebodies

Tonnes retired

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Air cargo forecast

1,814 in 2019. Part of the increase in utilisation will result from the

attrition of less efficient first-generation jets, many of which are stilldeployed in marginal operations today. In addition, faster-than-

average capacity growth in the larger aircraft segments will

contribute to an overall improvement in utilisation because suchcapacity is generally deployed on long-range services that are better

able to accumulate high annual flight hours.

More, larger, more produc t ive freighters w i l l be needed

*20-year average annual growth rate

22% higherFTK per tonne (1.0%*)

18% more tonnesper aircraft (0.8%*)

128% more aircraft (4.2%*)

228%more traffic

FTK

(6.1%*)

Unlike in passenger services where operators are more inclined to

increase frequencies in o

airbus 2000

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