airline employment & fleet forecast trends

airline employment &fleet forecast trends2013

special report

airline employment & fleet forecast trends 2013

2 | Flightglobal Jobs | Airline Employment & Fleet Forecast Trends 2013 Airline Employment & Fleet Forecast Trends 2013 | Flightglobal Jobs | 3

Across the globe which regions are developing and what are the projections for growth? Which aircraft will receive the most orders over the next few years? Of all the airlines in operation today, which are looking to develop and how, to ensure they have a sustainable future beyond 2013? All of these questions will affect your recruitment this year and through commissioning this whitepaper we hope to provide some insight into the answers you need to effectively plan your strategy.

Planning how to reach the right candidates using targeted and cost effective methods is where Flightglobal can really help you. As the only aviation website that combines the latest industry news with sites dedicated to both jobs and training, we are unique in offering access to candidates throughout the employment cycle, from those starting out through to experienced professionals.

To be seen as an employer of choice in the marketplace, reaching a large but qualified audience is key to the success of your business. Flightglobal Jobs has over 160,000 visitors every month, with over 1 million more potential jobseekers visiting our news site for the latest articles*. We have a variety of solutions to reach this audience of high quality aviation and aerospace professionals, which can also give you the opportunity to raise your brand awareness and stand out against your competitors.

We hope you find the following paper valuable to your recruitment needs. If you need any further help in attracting the right audience, then please get in touch with our team on the details below.

Lucinda ChiaGroup Sales ManagerFlightglobal Jobs and Training

* 160,818 Flightglobal Jobs visitors and 1,071,746 Flighglobal.com visitors on average Sept-Nov 2012

Cover photo credit: F1 Online/Rex Features

Flightglobal JobsQuadrant House, The Quadrant, Sutton, Surrey, SM2 5AS, UKTel: +44 20 8652 4900Email: [email protected]: www.jobs.flightglobal.comMedia Centre: flightglobaljobs.rbirecruitment.com


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forewordWelcome to our latest Flightglobal Special Report into Airline Employment and Fleet Forecast Trends, produced for Flightglobal Jobs. In this publication we draw on a variety of sources to analyse how future patterns in the world’s airliner fleet will drive employment in the sector.

The shape of commercial aviation has changed hugely over the past decade and a half. Already mature by the 1990s, with an ageing fleet and sluggish growth in passenger traffic, the North American market never really recovered from the aftershocks of the stock market crash of 2000, 9/11 and the subsequent global crises of the 21st century. Although North America still has more airliners than any region – dominated by single-aisle types – it is the only part of the world whose narrowbody fleet has not grown in 20 years.

Europe, for long the second biggest market for aviation, has also suffered, with the current economic problems forcing a wave of consolidation among airlines. More than a quarter of the world’s fleet is based in the region, but again immediate prospects for growth – in terms of fleet and airline employment – are slim.

It is emerging markets – particularly the giant Asia-Pacific region – that represent the biggest customers for the commercial aerospace industry, boosting manufacturer backlogs and – from often very small bases – leading the charge when it comes to recruiting. With not enough experienced pilots among their own citizens to meet demand, airlines in countries such as China and the United Arab Emirates are having to lure flightcrew from abroad. While putting in place fast-tracked schemes to accelerate the career development of their own

nationals, these carriers are likely to need talent from abroad for some time to come.

The traditional structure of the industry is also being turned on its head. For many years the North American market was dominated by large carriers operating from hub airports, with regional affiliates and subsidiaries feeding them with passengers. In Europe and elsewhere, flag-carriers – often state-owned – dominated the airways. The rise of the low-cost carrier in Europe has forced many of these legacy airlines to raise their game by cutting costs, or, in some instances, out of business. In Asia, new players opened the market for millions of new passengers. And in the Middle East, the phenomenal success of the big three global connectors – Emirates, Etihad and Qatar Airways – has changed the face of long-haul travel.

Aviation remains a fast-changing industry. We all remember airlines that were huge brands in the relatively recent past, that today do not exist or have been subsumed into competitors: from Pan Am to Varig to Sabena and Continental. Meanwhile, airlines that were relative minows or did not exist a decade ago are now global players. Failure rates are high, but given the rise in demand for air travel, especially in emerging markets, so too is the potential to succeed.

We hope you find Flightglobal’s Airline Employment Trends and Fleet Forecast a useful tool to aid your business planning.

Murdo MorrisonEditor, Flight International

executive summary 4

airline employment

Employee market share: 2011 5

Airline employees: historic trends 6

airline Financials

Top 150 airlines groups revenue summary 7

Historic trend based on airline group top 10 (2011) 10

contents

commercial Fleet

Current commercial active fleet 11

Historical commercial active fleet 12

Fleet Forecast

Fleet development 2012-2031 13



executive summary

airline employment

• Mainline carriers employ the most people with a market share of 85%

• The leisure carrier market has seen a 61% drop since 2007

• 31% and 29% of the airline workforce is based in Asia-Pacific and North America respectively

• There has been a fall of 61,000 employees in North America during the 2007-2011 period

• South America has seen an employment increase of 45% since 2007

• Delta Air Lines is the airline who employs the most people in the world with 78,392 employees in 2011

airline Financials

• Mainline airlines acumulated total revenues of US$526 billion in 2011

• North American revenues totalled US$205 billion in 2011 with operating results of US$7 billion

• Airlines in Asia-Pacific had the highest net result in 2011 with US$5 billion

• The Lufthansa Group had the largest revenues in 2011 with US$40 billion

• 28% of the world’s airline revenues are made by airlines in the US

commercial Fleet

• There are currently 24,350 active commercial aircraft in the world

• 50% of the world’s commercial aircraft are narrowbodies

• 45% of the world’s narrowbodies are Boeing 737 while 40% are Airbus A320 family aircraft

• North America is the only region that hasn’t achieved growth in the last 20 years in the narrowbody sector

• 33%, 26% and 24% of commercial fleet are based in North America, Europe and Asia-Pacific respectively

• Asia-Pacific is the region with the most widebodies in the world with more than 1,400 aircraft currently in service

Fleet Forecast 2012-2031

• 37% of the world’s commercial fleet will be based in Asia-Pacific by 2031

• China alone will be operating more than 5,000 aircraft by 2031

• The North American and European mature market expects fleet growth to be low in those regions

• The new entrants in the narrowbody market are the Bombardier CSeries, the Comac C919 and the Irkut MS21

• Strong growth is predicted in the widebody fleet, particularly in Asia-Pacific, China and the Middle East

Highlights from the report’s findings



North America

Europe

Asia-Pacific

South America

Middle East

Africa (3.5%)

30.5%

7.5%

5.3%

29.3%

23.9%

North America

Europe

Asia-Pacific

South America

Middle East

Africa (3.5%)

Mainline

Low-cost

Regional (3.8%)

Leisure (0.7%)

84.9%

10.6%

airline employment

employee market share

share by airline class: 2011airline class Total employees share

mainline 1,233,949 84.9%

low-cost 153,679 10.6%

regional 54,950 3.8%

leisure 10,343 0.7%

total 1,452,921 100.0%

share by region: 2011region Total employees share

asia-pacific 442,991 30.5%

north america 426,111 29.3%

europe 347,922 23.9%

south america 108,878 7.5%

middle east 76,662 5.3%

africa 50,357 3.5%

total 1,452,921 100.0%

The following analysis is based on the Airline Business Top 200 passenger rankings for the reporting year 2011.

Analysing the key airline types, it is clear to see that mainline carriers employ the most people with a significant market share of 85%. This is not entirely surprising given that 110 mainline operators feature prominently in the latest Top 200 ranking based on passenger traffic in 2011.

Low-cost carriers follow with a 10% global share and interestingly are the only market group which has grown (18%) its employee numbers over the last five years. Taking the biggest hit in terms of employee losses has been the leisure carrier market which has seen a 61% drop since 2007, a period where low-cost carriers were making their presence felt in the short haul arena, seen as the traditional core business of the leisure carrier.

Reviewing on a regional level, Asia-pacific employs 30.5% of the airline workforce, closely followed by North America (29.3%) and Europe (23.9%). North America has seen the largest fall in employee numbers during the last five years with -12.7%, a decrease of 61k employees. The neighbouring region of South America has

experienced a significant positive shift of 45.3% while Asia-Pacific has also seen an overall increase of 6.2% since 2007. Europe and the Middle East have seen a decrease of employees of -11.7% and -2.9% during this five-year period.

Looking at the leading airlines, the growth of 42% by Delta Air Lines over the 2007-2011 period can be explained by the merger with Northwest Airlines which happened in 2008. Leading Middle East operator Emirates has seen a significant increase of 55% during the same period with the number of employees going from 21k to 33k.

In 2011, Southwest Airlines saw a 30% increase in employees compared to the year before which is directly related to the acquisition of US low-cost carrier AirTran Airways which occured in 2011.

31%of the airline workforce is based in asia-pacific



airline employees: historic trendsTop 10 airlines (2011): employee 5-year Trendairline country 2007 2008 2009 2010 2011

Delta air lines USA 55,040 84,306 81,106 79,683 78,392

american airlines USA 82,000 70,900 66,500 65,506 66,522

air France France 63,613 55,684 58,065

lufthansa Germany 47,230 46,350 58,083 57,157 55,361

united airlines USA 55,160 50,000 47,000 46,060 46,491

southwest airlines USA 34,378 35,499 34,726 34,901 45,392

British airways UK 42,403 44,987 41,494 36,178 40,252

continental airlines USA 42,370 42,490 39,640 37,760 36,797

emirates UAE 21,769 28,037 28,686 30,258 33,634

Qantas Australia 34,267 33,670 33,966 32,489 32,629

hisTorical summary: airline Typeairline type employees

2007change employees




2011change

leisure 26,354 -1.8% 18,312 -30.5% 14,003 -23.5% 14,705 5.0% 10,343 -29.7%

low-cost 130,278 8.7% 136,662 4.9% 124,134 -9.2% 137,939 11.1% 153,679 11.4%

mainline 1,266,045 5.7% 1,295,014 2.3% 1,107,693 -14.5% 1,161,977 4.9% 1,233,949 6.2%

regional 79,329 20.0% 76,713 -3.3% 51,769 -32.5% 62,839 21.4% 54,950 -12.6%

total 1,502,006 6.5% 1,526,701 1.6% 1,297,599 -15.0% 1,377,460 6.2% 1,452,921 5.5%

hisTorical summary: regionregion employees





2011change

africa 49,100 20.6% 59,469 21.1% 22,529 -62.1% 44,334 96.8% 50,357 13.6%

asia-pacific 417,257 8.5% 464,715 11.4% 352,767 -24.1% 405,820 15.0% 442,991 9.2%

europe 393,934 2.3% 387,397 -1.7% 358,381 -7.5% 354,993 -0.9% 347,922 -2.0%

south america 74,928 23.7% 82,135 9.6% 77,499 -5.6% 87,339 12.7% 108,878 24.7%

middle east 78,919 3.0% 74,790 -5.2% 68,198 -8.8% 67,281 -1.3% 76,662 13.9%

north america 487,868 5.3% 458,195 -6.1% 418,225 -8.7% 417,693 -0.1% 426,111 2.0%

total 1,502,006 6.5% 1,526,701 1.6% 1,297,599 -15.0% 1,377,460 6.2% 1,452,921 5.5%

0

400,000

800,000

1,200,000

1,600,000

South America

North America

Middle East

Europe

Asia-Pacific

Africa

20112010200920082007

Emp

loye

es

South America

North America

Middle East

Europe

Asia-Pacific

Africa

0

400,000

800,000

1,200,000

1,600,000

Regional

Mainline

Low cost

Leisure

20112010200920082007

Emp

loye

es

Regional

Mainline

Low-cost

Leisure

hisTorical summary: airline Type hisTorical summary: region



airline financials

summary by airline Type: 2011group type revenues

(usm$)change op result

(usm$)op margin net result

(usm$)net margin groups

cargo 42,369 10.5% 1,999 4.7% 344 0.8% 11

mainline 526,357 12.6% 14,876 2.8% 4,438 0.8% 83

leisure 12,841 9.6% 94 0.7% -24 -0.2% 12

low-cost 67,338 25.8% 3,511 5.2% 1,331 2.0% 30

regional 17,098 18.3% 241 1.4% -92 -0.5% 14

total 666,004 13.8% 20,721 3.1% 5,997 0.9% 150

summary by region: 2011region revenues

(usm$)change op result

(usm$)op margin net result

(usm$)net margin

africa 11,656 1.8% -16 -0.1% -244 -2.1%

asia-pacific 190,950 14.0% 8,369 4.4% 5,177 2.7%

europe 186,272 14.4% 3,348 1.8% 521 0.3%

south america 30,148 23.2% 1,744 5.8% 247 0.8%

middle east 41,058 15.0% 66 0.2% -104 -0.3%

north america 205,920 12.3% 7,211 3.5% 401 0.2%

total 666,004 13.8% 20,721 3.1% 5,997 0.9%

EUROPEEurope’s carriers as a whole saw net profitability almost wiped out in 2011. The year 2012 has also witnessed high-profile airline casualties, and the Association of European Airlines (AEA) projects operating losses among its members of around €1.5 billion ($1.8 billion). Traffic and economic growth forecasts for large parts of the region are flat or negligible. And all this assumes that governments can resolve the sovereign debt that hangs over the region.

The climate of course differs by country and carrier. Airlines operating in fast-growing European markets outside of the EU, like Turkey and Russia, grew strongly in 2011. And within the EU, low-cost carriers have, in the main, kept a grip on profitability.

NORTH AMERICASince moving back into the black in 2010, the sustained profitability of North American carriers has been one of the brightest spots for the airline industry.

Amid continued tight capacity discipline, leading North American carriers posted collective profits of over $7 billion in 2011 – though net profits were much lower, in part hit by heavy losses

at American Airlines parent AMR. Having striven so hard to reach profitability, there is a determination to retain it, which is evident in their performance so far this year. This was underlined when IATA’s eurozone-woes-

The following analysis is based on the Airline Business Top 150 financial rankings for the reporting year 2011.

dominated recent global forecast for 2012 quietly lifted projected North American carrier profits by $500 million.

ASIA-PACIFICThe year 2011 further underlined the profitability of the fast-growing Asia-Pacific airline sector. At a net and operating level, Asian carriers in the top 150 biggest airlines generated higher profits than any other region. Of the most profitable 10 carriers by net profit, half were from Asia-Pacific.

It continues the rapid growth in the region which has seen Asia-Pacific carriers move sharply up the airline rankings. Revenues for Asia-Pacific among the top 150 operators were just shy of $200 billion, second only to North America. Ten of the 20 biggest airlines

$666bnis the collective revenues made by the world’s airlines in the year 2011


8 | Flightglobal Jobs | Airline Employment & Fleet Forecast Trends 2013 Airline Employment & Fleet Forecast Trends 2013 | Flightglobal Jobs | 9 � ightglobal.com/ab � ightglobal.com/ab August 2012 | Airline Business | 3332 | Airline Business | August 2012

WORLD AIRLINE RANKINGS SNAPSHOT

NORTH AMERICA

GRIP ON CAPACITY HELPS SUSTAIN IMPROVEMENTMixed fortunes for the North American majors; Delta Air Lines and United-Continental led pro� ts for the region continuing their improved results, but American Airlines parent AMR incurred heavy losses as it � led for bankruptcy protection. North America was second only to Asia in 2011 pro� tability

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CROSS HEAD

■

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REVENUE SPREADConditions closed in on the airline industry over the last year as the fuel cost burden mounted and economic growth stalled for many. This year’s World Airline Rankings illustrate the differing fortunes for the top 150 airlines by revenue in 2011

REGIONAL VIEWAsia-Paci� c has now overtaken Europe as the second largest region for passenger numbers among the top 150 airports, in handling over a billion passengers last year. Already the biggest region

REVENUE

STRONG SALES GROWTH STORYRevenues across the top 150 airlines jumped nearly 14% in 2011. Revenues at network carriers increased 12% to $526 billion, while they grew nearly 25% at low-cost operators in reaching $67 billion. Cargo revenues among the top 150 operators were up only 10% to reach $42 billion as the airfreight market struggled to pick up

Total revenue$666bn

Total profit$6.0bn

PROFIT

AIRLINES BATTLE TO KEEP A GRIPHigh fuel costs and a weakening economic picture for many have made it a battle to keep hold of pro� ts. Net pro� ts for the top 150 airlines slipped to $6 billion, of which low-cost carriers contributed almost a quarter. But it was a brighter story at an operating level, as pro� ts – while down on 2010 – still topped $20 billion

Total revenue$666bn

Total profit$6.0bn

LATIN AMERICA

CONSOLIDATION LEADS LATIN GROWTHThe mergers of AviancaTaca and LAN with TAM, � nally now completed, have dominated the Latin airline landscape. The region continues to expand rapidly, revenue growth of 23% was the fastest of the regions in 2011. But pro� ts came under � re, particularly in the highly competitive Brazilian market

Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

EUROPE

DEBT CRISIS BEGINS TO TAKE TOLL ON AIRLINESEuropean carriers lifted revenues 14% in 2011 and managed to largely cling on to their operating pro� ts in 2011, despite the increasingly dif� cult operating environment as fuel volatility continued and the European sovereign debt crisis deepened. But net pro� ts for the region were nearly wiped out

Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

ASIA-PACIFIC

CARRIERS LEAD THE WAY ON PROFITS IN 2011Revenues for Asia-Paci� c carriers within the top 150 grew 14% in 2011 as the region’s recent strong growth continues. While pro� t levels slipped on 2010, the Asia-Paci� c region was still the most pro� table. The potential for the region is underlined by the glut of recent airline start-up projects, notably in the low-cost space

Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

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NORTH AMERICA

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NORTH AMERICA

NORTH AMERICA


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

AFRICA

OIL PAIN TAKES TOLL ON AFRICAN CARRIERSSub-Saharan African operators saw much of the bene� ts of improved revenues in 2011 wiped out by the sharp increase in fuel, curtailing pro� ts for many. Airlines in North Africa were also hit by the disruption to air travel last year from the spread of the Arab Spring to a number of countries in the region

Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

AFRICA

ASIA-PACIFIC

MIDDLE EAST

EUROPE

LATIN AMERICA

MIDDLE EAST

GROWTH PATH CONTINUES BUT FUEL COSTS HIT HARDThe growth of mega-Gulf carriers continued apace in 2011, as Emirates, Etihad and Qatar Airways helped drive a 16% jump in revenues for Middle East airlines in 2011. Emirates’ pro� ts took a hit from higher fuel costs, but Etihad was in 2011 able to record its � rst pro� t since its launch

Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn



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NORTH AMERICA




CROSS HEAD

■




REVENUE


Total revenue$666bn

Total profit$6.0bn

PROFIT


Total revenue$666bn

Total profit$6.0bn

LATIN AMERICA


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

EUROPE


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

ASIA-PACIFIC


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

Gar

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NORTH AMERICA


NORTH AMERICA

NORTH AMERICA


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

AFRICA


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

AFRICA

ASIA-PACIFIC

MIDDLE EAST

EUROPE

LATIN AMERICA

MIDDLE EAST


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

� ightglobal.com/ab � ightglobal.com/ab August 2012 | Airline Business | 3332 | Airline Business | August 2012


NORTH AMERICA




CROSS HEAD

■




REVENUE


Total revenue$666bn

Total profit$6.0bn

PROFIT


Total revenue$666bn

Total profit$6.0bn

LATIN AMERICA


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

EUROPE


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

ASIA-PACIFIC


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

Gar

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NORTH AMERICA


NORTH AMERICA

NORTH AMERICA


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

AFRICA


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn

AFRICA

ASIA-PACIFIC

MIDDLE EAST

EUROPE

LATIN AMERICA

MIDDLE EAST


Europe$186bn

NorthAmerica$206bn

Africa$12bn

LatinAmerica$30bn

MiddleEast

$41bn

Asia-Pacific

$191bn



hisToric Trend based on airline group Top 10 in 2011group/airline country revenues $

million 2007revenues $ million 2008

revenues $ million 2009



lufthansa Group Germany 30,849 36,533 31,013 36,067 40,164

united continental Holdings USA - - - 34,013 37,110

united airlines USA 20,143 20,194 16,335 - -

continental airlines USA 14,232 15,241 12,586 - -

Delta air lines USA 19,154 22,697 28,063 31,755 35,115

air France-Klm Group France 34,434 33,739 29,664 31,276 34,109

Fedex USA 24,421 22,364 21,555 24,581 26,515

amr corporation USA 22,935 23,766 19,917 22,170 23,979

international airlines Group UK - - - 19,533 22,839

British airways UK 17,602 15,013 12,784 - -

iberia airlines Spain 7,617 8,101 6,136 - -

ana Group Japan 13,102 13,883 13,282 15,963 17,897

emirates UAE 10,572 12,595 11,565 14,807 16,958

southwest airlines USA 9,861 11,023 10,350 12,104 15,658

in 2011 by revenue were from Asia. This compares with just five Asian carrier groups 10 years ago. This includes three mainland Chinese carriers. The top Chinese mainland operators ten years ago ranked 35th, 39th and 43rd respectively in 2012, underlining the dynamic growth of China’s airline sector.

MIDDLE EASTA strong rise in revenues among the Middle East carriers, led by Emirates, was more than offset by the impact of high fuel prices, which saw overall net profitability tumble into the red. However strong growth and a good hedging policy helped local rival Etihad Airways become profitable for the first time.

Revenue for the Middle East’s top 10 airlines increased by around 15% last year, to $41.1 billion. Once again Emirates Group reported the highest figure, contributing more than two-fifths of the total amount.

SOUTH AMERICAWhen in June 2012 the merger between LAN Group and Brazilian operator TAM was finally completed, it created the largest airline group in fast-growing Latin America.

LATAM Airlines would have generated combined revenues in excess of $13 billion last year based on their individual returns. This would have made it the 16th biggest airline group in the world, underlining its importance on the global stage.

Small wonder there has been a tug of war from alliances for the merged carrier. A decision is still to come, but as a competition ruling attached to the merger blocks LATAM being in the same alliance as

recent Star Alliance recruit AviancaTaca, LAN’s existing relationship puts Oneworld in the box seat.

AFRICAFor African airlines still struggling to unlock the potential of the continent’s fragmented aviation market, fuel has been a heavy burden. Sub-saharan Africa’s big three carriers have continued to grow, lifting revenues and traffic. But profits among Kenya Airways, South African Airways and Ethiopian Airways in their most recent financial years were curtailed by rising fuel costs.

Kenya Airways’ net profits more than halved to Kenyan shillings (KSh) 1.66 billion ($18.7 million). While revenues grew a quarter, its costs jumped a third. Its fuel costs were 64% higher, the increased oil price exacerbated by the weak Kenyan shilling.

United States

Germany

Japan

France

China

United Kingdom

Other

27.9%

7.1%

5.9%

7.3%

41.1%

5.4%5.2%

revenue by counTry - 2009



commercial fleetcurrent commercial active fleet by region

norTh america

Widebody 1,148narrowbody 3,613regional 1,842turboprop 1,427

europe

Widebody 1,063narrowbody 3,580regional 763turboprop 929

middle easT

Widebody 497narrowbody 361regional 94turboprop 50

souTh america


asia-pacific

Widebody 1,468narrowbody 3,240regional 291turboprop 908

africa


World share by aircrafT markeT groupmarket group Total active fleet share

Widebody Jet 4,456 18%

narrowbody Jet 12,144 50%

regional Jet 3,376 14%

turboprop 4,374 18%

total 24,350 100%

The world’s in-service commercial aircraft fleet totalled 24,350 as of November 2012. North America is the region with the largest share (33%), followed by Europe (26%), Asia-Pacific (24%), South America (8%), Africa (5%) and the Middle East (4%). North America is the region with the highest number of narrowbody, regional jet and turboprop aircraft, although Asia-Pacific hosts the largest number of widebody aircraft, marginally more than North America.

Narrowbody jets represent 50% of the world airliners, with widebodies accounting for 18% of the global share. The regional jet and turboprop market groups hold a 14% and 18% world share respectively.

The Boeing 737 is the leading narrowbody type with 45% of the share followed by the Airbus A320 family aircraft with 40%. In the widebody market group, the Boeing 777, 767 and 747 aircraft types represent 57% of the share while the Airbus A330 and A340 count for 26%.

Bombardier and Embraer are the two principal manufacturers in the regional jet market, together making up more than 85% of the in-service fleet. With the Dash 8, Bombardier also feature in the

turboprop market, where it amounts to 19% of the overall share. ATR and Hawker Beechcraft are the other two leading manufacturers in that sector with a market share of 17% and 13% respectively.

The North American region seems to have reached its full capacity in the narrowbody aircraft market. It is the only region that hasn’t achieved growth in the last 20 years in that sector. More precisely, the region had a total of 3,700 narrowbodies in 1992, reached a peak of 4,493 aircraft in 2000 and was counting 3,613 in 2012.

50%of the world’s commercial aircraft are narrowbodies



North America

Europe

Asia-Pacific

South America

Africa

Middle East

33%

24%

8%

26%

5%4%

airliners region markeT share

Source: Flightglobal ACAS database (Nov 2012). Figures for passenger, freighter, combi and quick change aircraft.

Boeing 737

Airbus A320 family

Other

45%(5,410)

15%(1,857)

40%(4,877)

narroWbody Types markeT share

Boeing 777

Airbus A330

Boeing 767

Boeing 747

Airbus A340

Other

23%(1,040)

16%(733)

19%(863)

19%(841)

15%(672)

7%(307)

Widebody Types markeT share

Asia-Pacific experienced the biggest growth having gone from 545 narrowbodies in 1992 to 3,240 in November 2012. The narrowbody fleet has also increased considerably in Europe and in the Middle East over the same period while a smaller increase took place in Africa and South America. The world narrowbody fleet nearly doubled in 20 years going from 6,940 (1992) to 12,144 (2012).

The widebody fleet worldwide has gone from 2,569 aircraft in 1992 and increased up to 4,456 as of November 2012. The Middle East region has experience a major jump as it more than tripled its widebody fleet, going from 149 to 497 in 20 years. North America again doesn’t show a major progression in fleet size through time as it reached its peak in 2007 when it accumulated 1,207 active widebodies. The region went from 838 aircraft in 1992 to 1,148 in 2012.

0

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South America

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Middle East

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Asia-Pacific

Africa

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South America

North America

Middle East

Europe

Asia-Pacific

Africa

0

1,000

2,000

3,000

4,000

5,000

South America

North America

Middle East

Europe

Asia-Pacific

Africa20122007200219971992

Air

craf

t

South America

North America

Middle East

Europe

Asia-Pacific

Africa

narroWbody hisTorical fleeT Widebody hisTorical fleeT



fleet forecast 2012-2031

Nu

mb

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f air

craf

t

Year ending

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

South America

North America

Middle East

Europe

China

Asia Pacific

Africa

20222012200219921982

South America

North America

Middle East

Europe

China

Asia-Pacific

Africa

Nu

mb

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craf

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Year ending

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

South America

North America

Middle East

Europe

China

Asia Pacific

Africa

20222012200219921982

South America

North America

Middle East

Europe

South America

North America

Middle East

Europe

China

Asia-Pacific

Africa

acTive passenger fleeT acTive Widebody fleeT

PASSENgER FLEET DEvELOPMENT

Because of the maturity of the North American and European markets, demand for aircraft to deliver capacity growth in these regions is expected to be low. The North American low-cost fleet is “stocked”, and the European low-cost fleet is approaching that point. This means that the demand from these regions is largely for replacement.

Growth demand is coming from Asia-Pacific, China, the Middle East and Africa.

The new territories of growth demand appear to be “growing up” differently to the way the mature markets did, skipping the high levels of growth in the smaller turboprop and regional jet fleets. This is not good news for manufacturers in these segments without a growth region to deliver to. Signs of change in these areas will be carefully observed.

Although no attempt is made to predict cyclicality in the market, there is strong evidence that the current narrowbody delivery cycle is close to its peak and that a slowdown in deliveries is highly likely. Current high narrowbody jet deliveries are for renewing the fleets in mature markets, as well as growth in emerging markets. If the fleet replacement cycle is peaking, then manufacturers are

probability model predicts that some will re-enter the active fleet to meet some of the growth demand.

The narrowbody market has been the domain of Airbus and Boeing, with the exception of some Russian types that have not competed well globally. Now there are new entrants in the form of the Bombardier CSeries, Comac C919 and Irkut MS21, all with new generation engines promising double-digit fuel-burn savings.

Embraer has decided not to enter the narrowbody sector directly but to nibble at it from below with a re-engined E190/195. Both Airbus and Boeing have reacted to the new entrants with programmes to re-engine their narrowbody families. Without the technologies

37%of the world’s commercial fleet will be based in asia-pacific by 2031

approaching a period when they will have to be content with almost exclusively growth demand for a while.

Airlines in mature markets have been praised for their capacity restraint. Record delivery numbers have been accompanied by record numbers of removals. There is now a large parked fleet of aircraft and some of them might still have some life left in them. The



Cap

acit

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on

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Year ending

0

50,000

100,000

150,000

200,000

250,000

300,000

Large Widebody 72.5-150 tons

Medium Widebody 40-72.5 tons

Medium Standard Body 33-60 tons

Small Standard Body 12.5-33 tons

Utility 0-12.5 tons

2022201220021992

Large Widebody 72.5-150 tonnes

Medium Widebody 40-72.5 tonnes

Medium Standard Body 33-60 tonnes

Small Standard Body 12.5-33 tonnes

Utility 0-12.5 tonnes

World freighTer capaciTy

Nu

mb

er o

f sea

ts

Year ending

0

500,000

1,000,000

1,500,000

2,000,000

451+ seats

351-450 seats

251-350 seats

2029201920091999

451+ seats

351-450 seats

251-350 seats

World seaT capaciTy 251+ seaTs

ready to justify an all-new narrowbody, the order intakes of both suggest that their strategies have been an appropriate reaction.

Strong growth is expected in the widebody fleet, particularly in Asia-Pacific, China and the Middle East.

The order books for the A350 and 787 suggest the market has wanted aircraft like these for some time. Their effect on capacity is clear in the 251-350 seat and 351-450 seat categories. Of these categories, most growth is forecasted in the 351-450 seat category, which is to Airbus’s benefit. Airbus has two A350 models in this category compared to Boeing’s one: hence Boeing’s recognition of its need to revamp or replace its 777 to maintain its market share and anticipated 787-10 launch.

In terms of survival, turboprops and regional jets have shown great resilience, and it is assumed that this will continue. The narrowbody jet fleet is expected to have some survivors return from the parked fleet to active service.

FREIgHTER FLEET DEvELOPMENT

ICAO data shows that freight traffic, measured in tonne-kilometres performed, has increased consistently with world GDP, with brief stalls and dips. This has been met by growth in cargo fleet capacity. Since the mid-1990s, an increasing proportion of capacity has been delivered by large aircraft. In 1980, the large widebody share of capacity was 30%. This increased to 36% by 1990, 43% in 2000 and 60% in 2010, and is predicted to increase further, to almost 65%, by 2031.

Half the aircraft in this large widebody freighter fleet are Boeing 747s. With the exit of the L-1011 from the active fleet, together with the decline of share represented by DC-10s and the peaking of the share represented by the MD-11, most growth is being delivered by 747-8s and 777-200s. Both types have a healthy order book. It

looks like Airbus is missing out in this category with the cancellation of the A380 freighter programme. Perhaps, with many of its A380 programme issues behind it, Airbus will resurrect its freighter programme.

Demand for four-engine aircraft in this sector suggests prospects would be positive for an A340 conversion programme for long-thin trade routes.

With the shift of economic growth from the West to the East, the significance of the freighter fleets in Asia-Pacific and China has increased relative to that of those in North America and Europe. With much greater economic growth predicted for Asia-Pacific and China, this shift is set to continue. North America’s contribution to

world capacity peaked at around 67% in 1997 and had declined to 53% by the end of 2010. The forecast predicts it will continue to decline to around 48% by 2031. In terms of aircraft numbers, the forecast predicts that there will be around 4,000 freighters in active service by 2031. This is an increase of almost 2,000 aircraft to serve growth alone. Of course, there will also be deliveries to replace ageing aircraft as they are withdrawn.

Since 1970 there has been a trend for an increasing proportion of deliveries to consist of converted aircraft, rather than new build freighters. In the past few years there has been an increase in the percentage of new build aircraft. The chart of deliveries by converted/new build, below, suggests new build and some conversions provide the “base load” of deliveries, and conversions bear the brunt of the cyclicality.


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10,000

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30,000

40,000

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World GDP on PPP basis

Wo

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P o

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PP

bas

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ent

inte

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ion

al $

Bn

)

Source: ICAO, IMF and ACAS

0

40,000

80,000

120,000

160,000

200,000

Freight traffic performed

Freighter Fleet Capacity

20102000199019801970

World GDP on PPP basis

Freighter fleet capacity

Freight traffic performed

World freighTer Traffic & capaciTy 1970-2009

Shar

e o

f cap

acit

y (%

)

Year ending

0%

20%

40%

60%

80%

100%

South America

North America

Middle East

Europe

China

Asia Pacific

Africa

2022201220021992

South America

North America

Middle East

Europe

China

Asia-Pacific

Africa

World freighTer capaciTy share

Nu

mb

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f air

craf

t

Year ending

0

1,000

2,000

3,000

4,000

5,000

Large Widebody 72.5-150 tons

Medium Widebody 40-72.5 tons

Medium Standard Body 33-60 tons

Small Standard Body 12.5-33 tons

Utility 0-12.5 tons

2022201220021992

Large Widebody 72.5-150 tonnes

Medium Widebody 40-72.5 tonnes

Medium Standard Body 33-60 tonnes

Small Standard Body 12.5-33 tonnes

Utility 0-12.5 tonnes

World acTive freighTer fleeT

Since 1995, a very significant part of demand growth has been met by returning parked freighters to service. A looming issue is the lack of sufficient modern parked freight aircraft being available. To meet requirements, a larger proportion of demand will have to be met by new deliveries and conversions.

THIS SPECIAL REPORT WAS COMMISSIONED BY FLIgHTgLOBAL JOBS AND PRODUCED BY FLIgHTgLOBAL INSIgHT

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