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Worldwide Market Forecast
2019-2038
March 2019
Japan Aircraft Development Corporation
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Worldwide Market Forecast
2019 – 2038
March 2019
Japan Aircraft Development Corporation
Worldwide Market Forecast 2019-2038
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Worldwide Market Forecast 2019-2038
Foreword
The aircraft industry is expertise-intensive, and it has a spillover effect leading to
advancement of the country’s industrial structure. Therefore, the industry is essential for
Japan to be a scientific and technological powerhouse, and makes a great effort to develop
and progress.
It is essential to continuously collect and analyze data relating to the world commercial
aircraft market so that Japan’s aircraft industry can further develop in the future. In this
document, we show demand forecasts for air transport and aircraft of passenger and cargo
for the next 20 years from 2019 to 2038, based on results obtained by collecting and analyzing
data relating to the global commercial aircraft market involving air transport, aircraft, airlines,
aircraft makers, etc.
This document summarizing such forecasts is widely distributed not only to those who are
involved within and around the aviation industry, but also to the general public through our
website (http://www.jadc.jp/en/).
March 2019
Japan Aircraft Development Corporation
YGR-5095
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Worldwide Market Forecast 2019-2038
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Worldwide Market Forecast 2019-2038
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Contents
1. Executive Summary ........................................................................... 1
2. Introduction ....................................................................................... 3
3. Market Environments ........................................................................ 5
4. Market Drivers ................................................................................... 15
5. Air Passenger Market ........................................................................ 25
6. Passenger Airplane Demand .............................................................. 35
7. Air Cargo Market ............................................................................... 51
8. Jet Freighter Demand ......................................................................... 59
9. Airplane Sales .................................................................................... 69
10. Regional Overview ............................................................................ 73
11. Aero Engine Demand ........................................................................ 97
12. Methodology ...................................................................................... 99
Abbreviations ........................................................................................................... 101
Glossary of Terms .................................................................................................... 102
Appendix A Definitions of Airplane Categories .................................................. 103
Appendix B Definitions of Aero Engine Categories ............................................ 104
Appendix C Air Passenger Traffic ....................................................................... 105
Appendix D Air Cargo Traffic ............................................................................. 107
Appendix E Airplane Demand Forecast .............................................................. 108
Appendix F Effect of Crude Oil Price on RPK ................................................... 110
Appendix G Evaluation of Second Demand ........................................................ 111
Appendix H Changes in Cargo Transportation Results by Major Airlines .... ....... 112
Reference Materials ................................................................................................. 113
Worldwide Market Forecast 2019-2038
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Worldwide Market Forecast 2019-2038
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1. Executive Summary
Generally speaking, long-term demand forecast for the commercial air transport market
provides useful information for evaluating and reviewing market risk when doing business
associated with the commercial air transport sector, and for devising medium- and long-term
business plans and product strategies. In this document, Japan Aircraft Development
Corporation (JADC) specifically show demand forecasts for air passenger traffic, air cargo
traffic and airplanes (passenger jets, passenger turboprop airplanes and jet freighters), as well
as for aero engine demand, over the 20-year period covering 2019 to 2038.
For the forecast period, global economic growth, in terms of GDP, will be growing at an
average annual rate of 2.8%.
For the forecast period, global air passenger traffic demand, in terms of RPK, will grow at an
average annual rate of 4.4%, from 8.26×1012 passenger kilometers in 2018 to 19.4×1012 in
2038, which is 2.3 times larger than in 2018. During the period, the Asia-Pacific region will
show a growth rate of 5.3%, and its share will grow from 34% in 2018 to 40% in 2038.
The in-service passenger jet fleet will increase from 23,904 units at the end of 2018 to 40,301
units at the end of 2038. Demand for new airplanes over the next 20 years will be 35,312 units,
with a total value of 5.53 trillion U.S. dollars (at 2018 list prices). Among demand for passenger
jets, the largest demand will be for the 120-169 seat airplane class at 12,576 units. Regionally,
large demand will be generated in Europe (22% share), China (20%), and North America
(19%), and demand from these three regions will constitute 61% of the total demand in the
global market. The Asia-Pacific region will generate a demand of 14,384 units (41%).
2018 2038 Growth measures Sales (2018 US$billion)
World Economic Growrh (GDP) 2.8%p.a.
Passenger Demand (RPK :×109 passenger km) 8,259 19,400 4.4%p.a.Passenger Jet Airplane Fleet 23,904 * 40,301 2.6%p.a.New Passenger Jet Airplane Deliveries 35,312 5,531
Cargo Demand (RTK :×109 ton km) 255 547 3.9%p.a.Jet Freighter Fleet 1,966 * 3,010 2.2%p.a.New Jet Freighter Deliveries 1,039 354
Total New Jet Airplane Deliveries 36,351 5,885
Passenger Turboprop Airplane Fleet 3,673 * 3,914 0.3%p.a.New Passenger Turboprop Airplane Deliveries 3,130 68
New Engine Deliveries 87,685 1,360(*:This data is based on the database of Cirium. )
Worldwide Market Forecast 2019-2038
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The in-service passenger turboprop airplane fleet will increase from 3,673 units in 2018 to
3,914 units in 2038. Demand for new airplanes will be 3,130 units with a total value of 68
billion U.S. dollars (at 2018 list prices). The largest demand will be for airplanes with the 60-
79 seat class, amounting to 1,066 units. There will be no particular region with outstandingly
large demand, and airplanes will be used widely throughout many regions. The Asia-Pacific
region will have demand for passenger turboprop airplanes at 1,302 units (42%).
For the forecast period, cargo traffic demand, in terms of RTK, will increase at an average
annual growth rate of 3.9%, from 255×109 ton kilometers in 2018 to 547×109 in
2038, 2.1 times the figure for 2018. The Asia-Pacific region will show a growth rate of 4.6%,
and its share will expand from 35% in 2018 to 40% in 2038. The region will become the world's
largest market, just as in the case of air passenger traffic.
The in-service jet freighter fleet will increase from 1,966 units in 2018 to 3,010 units in 2038.
Demand for new jet freighters will be 1,039 units (of which 1,524 units will be converted from
passenger airplanes), with a total value of 354.2 billion U.S. dollars (at 2018 list prices).
Among demand for production jet freighters, demand for large airplanes will be 577 units, and
demand for medium-wide body airplanes will be 462 units. Regionally, North America and the
Asia-Pacific region will have the largest demand.
Global aero engine demand (including spares) will be 87,685 units with a value of 1.36 trillion
U.S. dollars (at 2018 market prices). Among these, demand for jet engines will be 80,764 units,
with a value of 1.35 trillion U.S. dollars, and demand for turboprop engines will be 6,921 units,
with a value of 15 billion U.S. dollars.
WorldNew Deliveries
Economics (GDP) 2.8% 39,481Pax. Traffic (RPK) 4.4% Sales valueCargo Traffic (RTK) 3.9% 2018US$BAirline Fleet 2.4% 5,953
Growth measures
North AmericaNew Deliveries
Economics (GDP) 1.9% 7,679Pax. Traffic (RPK) 3.1% Sales valueCargo Traffic (RTK) 3.8% 2018US$BAirline Fleet 0.5% 997
Growth measures
EuropeNew Deliveries
Economics (GDP) 1.6% 8,151Pax. Traffic (RPK) 4.3% Sales valueCargo Traffic (RTK) 1.8% 2018US$BAirline Fleet 2.5% 1,228
Growth measures
Asia-PacificNew Deliveries
Economics (GDP) 4.1% 15,950Pax. Traffic (RPK) 5.3% Sales valueCargo Traffic (RTK) 4.6% 2018US$BAirline Fleet 3.8% 2,552
Growth measures
Latin AmericaNew Deliveries
Economics (GDP) 2.9% 2,611Pax. Traffic (RPK) 3.6% Sales valueCargo Traffic (RTK) 1.2% 2018US$BAirline Fleet 2.1% 282
Growth measures
Middle EastNew Deliveries
Economics (GDP) 3.1% 2,336Pax. Traffic (RPK) 4.7% Sales valueCargo Traffic (RTK) 4.9% 2018US$BAirline Fleet 3.2% 570
Growth measures
CISNew Deliveries
Economics (GDP) 2.1% 13,470Pax. Traffic (RPK) 2.4% Sales valueCargo Traffic (RTK) 3.4% 2018US$BAirline Fleet 0.9% 165
Growth measures
AfricaNew Deliveries
Economics (GDP) 3.7% 1,407Pax. Traffic (RPK) 3.8% Sales valueCargo Traffic (RTK) 4.1% 2018US$BAirline Fleet 1.0% 160
Growth measures
*Airline fleet, new delivries and sales value are the aggregate for passenger jets, passenger turboprops and jet freighters.
(Terms and abbreviations used in the text are shown after P. 101.)
Worldwide Market Forecast 2019-2038
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2. Introduction The development of an airplane requires a period of nearly 10 years with development costs of more than one billion U.S. dollars, from the planning phase to entry into service. Even more time is needed to recoup the investment. Then, the newly developed model continues to be manufactured for several decades while several derivatives are developed. Once the airplane is delivered, it will continue to be operated for at least 10 years or so, and some for more than 40 years. Because airplanes are such long-lived products, the aircraft industry is said to have a very high business risk. Airlines that purchase and operate such airplanes are highly susceptible to the economic and social circumstances of the time, such as competition with new entrants including LCCs resulting from privatization and deregulation, and increased costs due to soaring fuel prices. Airplanes are very expensive, ranging from billions of JPY to tens of billions of JPY per unit. While the airline industry is a capital-intensive industry because airlines need many such airplanes, airfares are becoming cheaper and cheaper, and air tickets are now said to be commodities. In such a business environment, in order to minimize business and market risks, it is important to con- tinuously and carefully monitor market trends related to the economic and social environments surrounding the aircraft industry and the airline industry, which is their customer. JADC has continuously been gathering information, and undertaking research and analysis of information on the global commercial aircraft market including airplanes, air traffic and airlines. For the members of JADC and the aircraft industry in Japan, JADC has made long-term demand forecasts for air travel and airplanes since the late 1970s, in order for such data to be used as a source for creating long-term product strategies and business plans. The “Worldwide Market Forecast”, which is the long-term demand forecast by JADC, shows forecasts for air passenger and air cargo demand, as well as airplane demand for passenger turboprop airplanes with at least 15 seats, passenger jets with at least 20 seats, jet freighters and aero engines, over the 20-year period covering 2019 to 2038. These forecasts are widely released to the public including aircraft manufacturers, suppliers, airlines and financial institutions, etc., at home and abroad.
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3. Market Environments
Business overview
The global GDP growth rate in 2018 was 3.0%, a figure slightly lower than expected.
The World Bank's “Global Economic Prospects (GEP)” forecasts a moderate decline to 2.9% for 2019
in the global GDP growth rate. While the world trade and activities in the manufacturing industry are
slowing down, and trade disputes show no sign of settlement, downside risks to the global economy’s
growth rate are increasing due to a tighter monetary environment, the deceleration of the Chinese economy, Brexit, crude oil price fluctuations, political uncertainty, etc. The economic recovery of primary commodity export countries remains stagnant and has been slowing
down. Further tightening of borrowing costs may hinder capital inflows and lead to a slowdown in the
growth of many emerging and developing countries. It seems that public and private debts that have
been accumulated so far may only increase vulnerability to fluctuations in finance conditions and
market sentiments.
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In this economic environment, according to IATA’s forecast of global air passenger traffic in 2018, air
passenger traffic in terms of RPK is expected to grow by 6.0%, and air traffic cargo in terms of FTK
is expected to expand by 3.5%.
Airlines in Japan saw a 1.3% year-on-year increase in the number of domestic air passengers and a
5.2% increase in international routes in 2018. The number of Japanese people traveling abroad
increased by 6.0% year-on-year, and that of foreign visitors entering Japan rose 8.7%. The growth rate
of the latter was reduced by half from the previous year (19.3%), but the actual number has been
increasing, making the inbound demand as important as before.
Looking at the financial situation in 2018, although sales for the global airline industry as a whole
were up 8.7% year-on-year, to $821 billion, net income was down 6.4% year on year, to $32.3 billion,
because airfare unit prices decreased and fuel prices moderately increased. Looking at the net profit
margin to sales by region, airlines in North America were the highest at 5.7%, followed by the Asia-
Pacific region at 3.8%, and Europe at 3.7%.
Airplane order and delivery
At the end of 2018, the global fleet was comprised of 23,904 passenger jets, 3,673 passenger turboprop
airplanes and 1,966 jet freighters in service.
The number of annual orders (net orders excluding cancellations) for passenger jets (including Combi and Quick Change jets) and airliner variants of jet freighters, etc., was 2,140 in 2018, a year-on-year decrease of 9.4%. It continues to be necessary to secure airplanes to meet demand for future air transport, as well as to fill demand for replacement by new models which comply with stricter environmental regulations; however, taking into consideration such matters as future global economic
Worldwide Market Forecast 2019-2038
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instability and fuel price trends, airlines seem to even be wary of placing orders for airplanes. Details of the number of orders were as follows: 363 wide body airplanes (17%), 1,502 narrow body airplanes (69%) and 320 regional jets (15%). The number of orders for wide body airplanes increased by 123 from 2017, that for narrow body airplanes decreased by 474, and that for regional jets increased by 187. Among the wide body airplanes, the number of orders for jet freighter variants was 83 in 2018, a significant increase from 11 units in the previous year. In addition, the number of orders for major models of turboprop passenger planes in 2018 was 86, almost a half of the number
from the previous year. The number of jet airplanes delivered in 2018 reached 1,764, marking a record high topping 1,652
units in the previous year. Both Airbus and Boeing are trying hard to increase their production of
narrow body aircraft, and they delivered 626 units of the A320 family aircraft and 580 units of the 737
family aircraft in 2018. The number 1,764 includes 39 freighter jets.
There were 107 passenger turboprop airplanes delivered in 2018, which is slightly less than 123 units
delivered in the previous year.
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The combined order backlog of passenger airplanes and jet freighter variants as of the end of 2018
stood at 15,007 units, or 1.84 times the amount at the end of 2008. Regionally, the Asia-Pacific regional
airlines were the biggest both in 2008 and 2018, but orders from undisclosed customers have recently
increased.
It is said that the delivery positions of narrow body aircraft for major manufacturers are almost
completely filled until 2020. Both Airbus and Boeing have produced monthly, at least 50 units of the
A320 family and of the 737 family respectively in 2019 so far. To ensure an early delivery of orders,
the manufacturers are considering further increases in production.
The order backlog for major models of turboprop airplanes was 364 units at the end of 2018.
Restructuring of the Airline Industry
In December 2013, American Airlines and US Airways merged. In the U.S., Northwest Airlines had
already merged with Delta Air Lines, Continental Airlines with United Airlines, and AirTran Airways
with Southwest Airlines. After the mergers, these four companies have had a capacity share, in terms
of ASK of 78% (as of September, 2018) of the U.S. domestic market. In December 2016, Alaska
Airlines acquired Virgin America. Similarly, industry restructuring is also proceeding in Europe and
Latin America.
Many airlines entered the U.S. market after the deregulation of the industry more than 30 years ago,
which drove down airfares through fierce competition. However, due in part to exogenous shocks such
as soaring fuel prices, terrorism and the financial crisis, the financial condition of airlines had been
worsening until a few years ago. To survive in this environment, companies have merged in order to
reduce costs and expand their market share. The greatest benefit from this restructuring by M&A is
the decrease in the number of competitors in the industry.
Even within the restructuring of the airline industry, cross-national mergers are still rare. Due to current
regulations, airlines cannot be funded with foreign capital in excess of 50%, although there are some
Worldwide Market Forecast 2019-2038
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exceptions. While it is difficult for an investor in a foreign airline to carry out a complete takeover,
investments within the scope of the regulations can be made in pursuit of business objectives. Etihad
Airways has made a 49% investment in Alitalia, a 49% investment in Air Serbia, and a 25% investment
in Virgin Australia. Qatar Airways has made a 20% investment in IAG. This kind of action will
continue to expand, and it is believed that airlines will be regionally consolidated into a few companies
or groups.
Alliances
There are three major global airline alliances: Star Alliance, SkyTeam and oneworld. Using the number
of IATA members as a parameter, the airlines belonging to these three alliances account for 59% of
RPK and 64% of operating revenue. It is possible for an airline partnership within an alliance to obtain
antitrust immunity, which refers to the exemption from persecution under antitrust laws. Although
competition has mainly existed between individual airlines, it has been changing and the present
competition is between alliances.
The alliances are looking to expand membership so that they will be able to provide seamless service
through networks spanning the entire globe. To join an alliance, an airline must make sure that its level
of service is in line with the alliance’s standards, which is expensive. For small- to medium-sized
airlines, however, the cost is worthwhile, as it is becoming difficult for them to survive independently
outside of an alliance. However, airlines do not conduct all business within their respective alliances.
Cases of airlines entering into business partnerships with carriers in other alliances are increasing.
In addition, alliance network strategies are being affected by instances of airlines leaving one alliance
to join another, as was the case when US Airways merged with American Airlines and LAN merged
with TAM, and in 2014 the two new airlines left “Star Alliance” to join “oneworld”. Within alliances,
23%
20%
16%
41%
Air Passenger Traffic (RPK)
Others 23%
23%18%
36%
Operating Revenue
Others
Market Share of 3 Major Alliances (2016)
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things like code-sharing, frequent flyer program integrations and joint purchasing of equipment are
already taking place, and the joint purchasing of airplanes is also being considered.
Even with these developments, some airlines such as Emirates Airlines and Hawaiian Airlines attach
importance to the demerits of alliance membership, and are attempting to expand their networks and
increase convenience independently. Airlines also exist which invest in other airlines and become
involved as equity partners, such as Etihad Airways. However, even for these airlines, it is difficult for
them to realize everything on their own, and there are increasing numbers of cases in which one airline
forms a business partnership with another that fits its strategy, for example Emirates and Qantas.
Infrastructure
Infrastructure development, such as airports and airspace, is important for the growth of air transport.
Currently, Europe, the U.S. and Japan are upgrading to next-generation air traffic control systems to
improve congestion and economic viability by making efficient use of airspace. However, there are
technical challenges and cost restraints that are making the change difficult in the short term, and as
such there is no choice but to
implement the new systems in phases,
over a period of time.
At major airports in each country,
congestion and a lack of landing slots
are resulting in delays, impeding the
opening of new routes and increases
in frequency. At many of the major
airports around the world, delays
from 30 minutes to one hour are
becoming regular occurrences during
peak travel times. Heathrow Airport in
London has already reached the limits of
its capacity, and it has become difficult
to secure slots for arrivals and departures
there.
New airport construction, as well as
upgrades to existing airports, such as
new or improved runways and aprons, as
well as terminal facility improvements
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and expansions, require a very considerable investment of time and money.
In recent years, with a growing
awareness about the environment, the
understanding of nearby residents
must be obtained regarding the issues
of noise and air pollution around
airports.
Even in Asia, which is experiencing
remarkable growth, an improvement
of the infrastructure is urgently
needed, and some projects are already
under construction or in the planning
phase. China, where domestic airlines
are expanding rapidly, is also
planning to build about 100 airports by 2020.
According to Eurocontrol, the delayed time per flight in 28 EU countries will increase from 8.8
minutes in 2012 to 14.2 minutes in 2035, and the resulting total loss of time value is expected to
increase from €4 billion in 2012 to €13.4 billion in 2035.
Presently, infrastructure development such as airports and aerospace around the world is not keeping
pace with the air traffic growth.
Environmental challenges
Traditionally, environmental issues involving aviation were focused on the noise and air pollution
affecting the environment surrounding airports. Recently, the problem of global warming has taken
the spotlight, and attention is focusing on aircraft CO2 emission volumes. In 2016, greenhouse gas
emissions in the form of CO2 from international air traffic amounted to 558 million tons, an increase
of 5.2% from 2015, which was just 1.7% of total global emissions; however, this is expected to
increase along with the growth in air traffic.
ICAO, at its 37th Assembly in 2010, adopted a global reduction goal of improving fuel efficiency by
2% annually until 2050, and to prevent any increase in CO2 emissions from 2020 onwards, as goals
including both developed countries and emerging countries. (Against this backdrop, from 2012, the
EU began applying CO2 emission regulations and emissions trade obligations (EU Emissions Trading
System - EU-ETS) to aircraft. As this system is applied to all flights operated from or to Europe,
including flights by foreign carriers, the governments of the U.S., China, India, Japan, Russia and
other countries have expressed opposition to such a system. The EU, with regard to carriers which
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operate from or to Europe from January 2014 to 2020, revised the regulations to be relevant only to
flights within Europe, which are covered by the EU-ETS).
Moreover, at the 38th Assembly of ICAO in 2013, it was confirmed that various countries will work
comprehensively by taking every measure available in order to achieve the reduction goals that were
set in 2010. It also set new goals to build an emissions reduction system using market mechanisms (so
called emissions trading) in 2016, and goals applicable from 2020.
At the 39th Assembly of ICAO in 2016, 191 nations agreed to the regulatory framework for
greenhouse gas emissions related to international aviation. This agreement compensates for the
increase of CO2 emissions from aircraft from 2020 onwards, and makes it mandatory for each airline
to offset any increase by purchasing emission units. The reduction of greenhouse gas emissions based
on the purchase of emission units under this scheme will begin in 2021, involving 64 nations that will
participate voluntarily. From 2027 onward, participation in this scheme will be mandatory for all
nations, excluding those whose emissions are below a specific level, etc.
In 2017, ICAO established the CORSIA (Carbon Offsetting and Reduction Scheme for International
Aviation), a scheme to promote the agreement made at the Assembly of ICAO in 2016. International
flights connecting participating countries are subject to this scheme. However, any international flight,
if either its departure port or arrival port is not in a participating country, is excluded; and any airline
whose international flight airplanes emit 10,000 tons of CO2 per year or less, and any airplane with a
maximum takeoff weight of 5.7 tons or less, are also excluded. An emission standard value, based on
which the CO2 emission units to be purchased after 2021, will be obtained by using an average value
of emissions in 2019 and those in 2020, and the CO2 emission units required to be purchased by each
airline will be a portion exceeding the average value.
The CO2 emission units required to be purchased are calculated by using a coefficient commonly
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applied to all airlines for a period between 2021 and 2029, and by using an individual coefficient
reflecting the effort to reduce emissions by airlines for a period between 2030 and 2035. Each airline
is supposed to purchase emission units corresponding to the calculated CO2 emissions. According to
data by the Mini
stry of Land, Infrastructure, Transport and Tourism (or MLIT, Japan), the total emission units to be
purchased by Japanese airlines each year are expected to increase from one billion and several hundred
million JPY in 2021 to several tens of billion JPY in 2035.
However, while the aforementioned regulation relates to international aviation, CO2 emissions from
domestic flights in each country are allocated to the total emissions by country including emissions
from the other domestic industries in the country, and thus each country is supposed to seek to reduce
CO2 emissions with its government’s responsibility based on its reduction target according to the
Kyoto Protocol and the subsequent Paris Agreement. In addition, with regard to exhaust gas standards to be set based on aircraft size, a new aircraft CO2
emissions standard, which is contained in a new Volume III "Aeroplane CO2 Emissions" to Annex 16
of the Convention on International Civil Aviation (Chicago Convention), was adopted as a standard
required in such a manner that indicators based on aircraft fuel consumption rates shall be certain
values or below. The standard will apply to jet airplanes with a maximum takeoff weight of more than
5.7 ton and to propeller airplanes with that of more than 8.6 ton. Effective dates of the standard shall
be: January 1, 2020 for newly developed models to be applied for model certification by manufacturers
(January 1, 2023, however, for jet airplanes whose maximum takeoff weight is 60 tons or below with
a maximum number of fewer than 19 seats); January 1, 2023 for models already in-production to be
applied for model modification; and January 1, 2028 for airplanes other than the above which continue
to be manufactured. Accordingly, airplanes subject to regulation will not be able to be manufactured
after the effective dates if they do not meet the standard.
As the production of CO2 corresponds directly to fuel combustion, improving the fuel consumption
in aircraft would lead directly to lower CO2 emissions. However, as the examination of CO2 emissions
reduction progresses, it has become clear that it will be difficult to reach the goals simply by means of
technological innovations in aircraft and improving methods of operation, so the potential for
substitute fuels for fossil fuels, following the idea of carbon neutrality, has been considered, and
research is progressing on biofuels made with vegetables.
Regarding the problem of noise in the vicinity of airports, even now, with aircraft that are quieter than
those of the 1970s starting to make appearances, it continues to be a major concern as an environmental
issue. For the purpose of noise abatement, many of the world’s major airports are limiting the number
of departures and arrivals, and restricting nighttime flights, namely, putting a curfew in place. With
the growth of air traffic, increased frequency and the operation of larger airplanes have become
Worldwide Market Forecast 2019-2038
14
necessary. However, because this can also lead to a worsening of the environment around airports, it
is difficult to relax departure and arrival restrictions at existing airports or expand facilities. This also
makes new airport construction difficult. In such a situation, the ICAO adopted the application of
Noise Standards Chapter 14, which is stricter than the current standards, at the 38th ICAO Assembly
in August 2013. The application period and target for the new standard are aircraft obtaining model
certification from January 1, 2018 (or from the end of 2020 for aircraft with a maximum takeoff weight
of less than 55 tons).
Environmental standards will become increasingly stronger in the future. As a result, airlines will have
to promote such measures as the use of equipment with higher fuel efficiency, adoption of efficient
methods of operation that will lead to fuel conservation, and use of alternative fuels, regardless of fuel
price trends.
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4. Market Drivers 4.1 World Economy The global economy has continued a moderate recovery centered on the U.S., and the real economic
growth rate for 2018 was 3.2%.
The global economy for the time being, while various countries are hurriedly trying to revitalize their
economies, is involved in large and small risks as follows: there are discontents on adjustment to the
distribution of profits among countries, discontents on foreign policies that underlie such discontents,
and other discontents in economic relations including national security; meanwhile, there are worries
about the U.S.-China trade negotiations, revision to trade relations between the U.S. and countries
concerned, and refugee/immigration issues and uncertain Brexit future in Europe; in Asia, China is
expanding its military presence and there is a sign of putting pressure on the freedom of the seas, or
trade freedom; and in addition, behind those scenes, there are an interest rate hike forecast by
normalization of monetary policies in the U.S. and a possibility of fluctuation in crude oil prices in
association with Iran and Saudi Arabia. In the long term, during the forecast period from 2019 to 2038,
the real global GDP (calculated in 2015 USD) is forecast to grow at an average rate of 2.83%. During
this time period, China, Southeast Asia (including ASEAN), and South Asia (including India) are
expected to continue to have high GDP growth rates.
Although the average annual growth rate for China is expected to drop to 4.7% in the next 20 years,
which is much lower compared to the rate of 8.8% that has been enjoyed over the past 20 years, its
huge size will continue to account for massive GDP growth. Furthermore, expected growth rates for
2.83%
4.07%
1.85%
1.57%
1.47%2.67%
0.91%
2.38%4.72%
1.94%
4.40%
5.73%
3.05%
2.88%3.65%
2.06%
3.09%
5.24%
2.20%
1.79%
1.69%3.28%
0.88%2.99%
8.83%4.19%
5.10%
6.58%
3.98%
2.25%3.99%
4.10%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
WorldAsia/Pacific
North AmericaEurope
Westen EuropeEastern Europe
JapanOceania
ChinaNorth-East AsiaSouth-East Asia
South Asia
Middle East
Latin AmericaAfrica
CIS
Real GDP Growth Rate per annum
Economic Forecast by Region
2019-2038
1999-2018Breakdown of Europe
Breakdown of Asia/Pacific
Worldwide Market Forecast 2019-2038
16
Southeast Asia and South Asia will be between 4.4% and 5.7%. In contrast, economic growth in
developed regions is expected to maintain the status quo or slow, and is forecast to be 1.9% in North
America, 1.6% in Europe, and 0.9% in Japan. As a result, global GDP will grow by a factor of 1.75,
from 82 trillion dollars in 2018 to 142 trillion dollars in 2038.
Looking at real GDP by region, the Asia-Oceania Region, which has already ranked first in the world
by overtaking North America, will increase its share from 34% in 2018 to 44% in 2038, and
specifically, China will be 24%, Southeast Asia 4.7%, and South Asia 7.1%.
Worldwide Market Forecast 2019-2038
17
4.2 Crude Oil Prices
In the airline industry, changing fuel prices have a direct effect on airline profits. Crude oil maintained
high prices until the first half of 2014, but the crude oil markets suffered an oversupply due to
decreased demand for crude oil attributable to the remarkable economic deceleration of China and
uncertainty over the future of the global economy, the U.S. government lifting the ban on exports of
crude oil for the first time in 40 years following the industrialization of shale oil, and Iran restarting
oil exports after it was released from economic sanctions. Moreover, based on the fact that OPEC has
postponed coordinated
production cuts and non-
OPEC countries are
increasing oil production,
crude oil prices have
dropped significantly in the
year and a half until early
2016. Spot prices of Brent
Crude, an international
index for oil prices, dropped
73%, from $111.8 per barrel
in June 2014 to $30.7 per
barrel in January 2016. Later, in February 2016, it turned upward. As of March 2018, the average
annual price increased 115% from the early 2016 level, to $66.0 per barrel, partly because the OPEC
countries agreed to production cuts at the Extraordinary Meeting of the OPEC Conference that was
held in September 2016. The price of jet fuel (U.S. spot price) also dropped by 68% due to the sudden
decrease in crude oil prices, falling from $2.88 per gallon in June 2014 to just $0.93 per gallon in
January 2016. However, as in crude oil prices, the price of jet fuel turned upward in February 2016.
As of March 2018, it stood at $1.86, up 100% from the early 2016 level. Looking at the average annual
price, it was $2.70 per gallon in 2014, $1.53 per gallon in 2015, and $1.25 per gallon in 2016.
Accordingly, many international airlines set their fuel surcharges at 0 (zero) in the middle of 2016, but
since around February 2017, many airlines have imposed fuel surcharges on passengers, reflecting the
subsequent rise in jet fuel prices.
Demand for crude oil prior to 2000 was mostly for the consumption in developed countries. After 2000,
the rapid economic development of Asian countries, especially China, as well as other BRICS
countries, was accompanied by major increases in demand for crude oil. Because of this, according to
the IEA, demand for crude oil from non-OECD countries, as a fraction of global demand, increased
from 37% in 2000 to 49% in 2013. After 2000, following strong global demand and soaring prices,
Worldwide Market Forecast 2019-2038
18
the amount of crude oil supplied grew from 77.3 million barrels per day to 91.4 million barrels per
day in 2013. Notably, the amount supplied from non-OPEC oil producing countries has increased
dramatically, rising 8.1 million barrels per day from 2000 to 2013. This is due to Russia and other CIS
countries enhancing their production capacity, development of deep sea oil fields in West Africa and
Brazil, and the development of shale oil fields in North America. In contrast, the amount supplied from
OPEC countries has risen 5.9 million barrels per day.
Worldwide Market Forecast 2019-2038
19
However, since later 2014, demand for crude oil has been oversupplied globally due to reasons such
as slowdown of the growth rate of emerging economies including China, introduction of fuel
efficiency improvement technologies developed by developed countries, and high-level production
of crude oil by major oil producers including members of the Organization of the Petroleum
Exporting Countries (OPEC).
The forecasts of future crude oil prices published by some specialized institutes indicate drops in the
short term due to oversupply and the economic standstill. According to many of these forecasts, in the
long term, it is expected that the oversupply will be resolved due to the rising demand for energy
accompanying economic development in emerging countries, and that crude oil prices will rise again,
although the proliferation of energy-saving technology as well as the transition to alternative energy
sources will reduce demand for crude oil.
For example, according to the median estimate (Reference Case) of the IEA (2018), the price of crude
oil will be around $73 per barrel around 2020, reaching the 2005 level. Although the increase will be
moderate thereafter, the price is expected to reach $90 per barrel around 2030, and $105 per barrel
around 2040.
Even though this price rise speed will be more moderate than before, airlines will be confronted with
soaring fuel prices again. According to the low estimate (Low Oil Price Case) of the same forecast,
the price of crude oil will be at about $48 per barrel in 2040. In this case, it will be easy to draw out
increased transportation demand accompanying economic recovery and development, because lower
fuel costs will keep the transportation costs and yield low. However, there will be the effects of slower
investment in fleet renewal for improving transportation efficiency.
4.3 World Population In emerging countries, including those in Asia, partly due to their high economic growth rate, middle-
0
50
100
150
200
250
1990 2000 2010 2020 2030 2040
Aver
age
Spot
Pric
e (2
018U
S$/b
bl.)
Transition and Forecast of Crude Oil Prices (Brent Crude Oil)EIA High Oil Price Case
EIA Low oil and gasresource and technologyEIA Reference Case
EIA High oil and gasresource and technologyEIA Low Oil Price Case
IEEJ Ref.
IEEJ Tech. Advanced
Source : EIA, IEEJ
Brent Crude Oil Price(Average Spot Price)
Worldwide Market Forecast 2019-2038
20
class income (annual household disposable income range between $5,000 and $35,000) has been
expanding rapidly. During the ten-year period from 2000 to 2010, the middle-class income population
increased at an average annual rate of 13.3%, reaching 2.1 billion. By 2020, the figure is expected to
reach 3.1 billion.
According to population estimates for 2017 by the United Nations, the world population will rise to
8.33 billion in 2027, up from 7.55 billion in 2017. It is estimated that the population in emerging
countries will grow from 6.29 billion in 2017 to 7.05 billion in 2027. As a result, the global middle
class population, which comprised 10% of the total global population in 2000, is expected to account
for 40% of the total global population in 2020. Regionally, Asia, containing both China and India, will,
as expected, have the largest middle class population, growing from 1.5 billion in 2010 to 2.3 billion
in 2020, and accounting for 76% of the middle class overall. The global population will grow from
7.55 billion in 2017 to 9.02 billion in 2037. 97.6% of this growth will be in emerging countries.
Urbanization has been taking place partly due to population expansion and economic growth. The urban population will rise from 51.6% of the world population in 2010, to 58.0% in 2025 and 61.7% in 2035. During that period, the urban population of emerging countries, with ever-expanding urbanization, will increase by about 10%, up from 46.0% to 55.8%, while that of the developed countries will increase by 4.6%, up from 77.5% to 82.1%. Urbanization in emerging countries will accelerate.
Worldwide Market Forecast 2019-2038
21
In addition, there were 29 cities globally with populations in excess of 10 million in 2015, and this
number will rise to 48 in 2035. Twenty three of these cities were in emerging countries in 2015, and
this number will increase to 41 by 2035, meaning these countries will be further urbanized. The
population of cities with more than 10 million inhabitants as a percentage of the global urban
population will increase from 11.6% in 2015 to 12.7% in 2020, and will further increase to 15.5% by
2035. From a regional point of view, the number of cities in Asia with populations in excess of 10
million will increase from 18 in 2015 to 32 in 2035, which means that about 60% of the cities with
populations over 10 million in the world will be in Asia.
Worldwide Market Forecast 2019-2038
22
4.4 Demand for Travel According to the UNWTO (United Nations World Tourism Organization), the number of international tourist arrivals (overnight visitors) in 2017 increased by 7.0% (86 million) from the previous year to 1.326 billion, despite conflict and economic hardship in some regions. This marked the highest increase since the 2009 global economic crisis, also it was exceeded the UNWTO's long-term forecast. This growth was driven by an upward trend of the global economy, and outbound demand from all source markets was strong. This was hugely contributed to by recovery of outbound demand from Brazil and Russia, whose economies had been stagnant, as well as inbound demand to economically growing India. From a regional perspective, Europe increased by 8% to 672 million, the U.S. increased by 5% to 211 million, the Asia-Pacific region increased by 6% to 323 million, and the Middle East increased by 5% to 58 million. Demand to the Southern/Mediterranean European and North African Mediterranean region drove such growth. Of these international tourists’ arrivals, about 80% were intra-regional movement, and conventionally, main outbound tourist markets in international tourism have been Europe, the U.S., and developed countries in the Asia-Pacific region. In the past several years, however, emerging economies in Asia, Central and Eastern Europe, the Middle East, Africa, and Latin America have shown rapid growth due to rising disposable income. Europe has generated almost half of the number of international tourists’ arrivals globally, and even now, it is the world’s largest outbound tourist market in the world tourism. Meanwhile, the share of the Asia-Pacific region in outbound tourism has been increasing rapidly, and currently, one out of 4 tourists originates in the Asia-Pacific region.
Worldwide Market Forecast 2019-2038
23
According to the same organization’s prediction for the number of international tourist arrivals
(overnight visitors) worldwide from 2010 to 2030, this number will reach 1.8 billion by 2030, growing
at an average rate of 3.3%. The average growth rate of arrivals in emerging countries will be 4.4%, or
double the rate of developed countries, so that in 2030 the share of international tourist arrivals is
estimated to reverse to 57% in emerging countries and 43% in developed countries. The annual growth
rate will be 4.9% in the Asia-Pacific region, which will expand the most, while growth is estimated to
be more moderate in Europe and the Americas. As for the share of international tourists in the global
market, it is estimated that
the Asia-Pacific region
(from 22% in 2010 to 30% in
2030), the Middle East (from
6% to 8% in the same time
period), and Africa (from
5% to 7% in the same time
period) will increase their
shares, while North America
(from 16% to 14% in the
same time period) and
Europe (from 51% to 41% in
the same time period) will
account for lower shares.
In the statistics for 2017, 57% of travelers with accommodations used airplanes, and airplanes are
increasing their share of transportation. Looking at the purpose of travel, we see that 55% of travel
was for leisure, 27% was to visit friends and relatives (VFR), undertake pilgrimages, or seek health
treatments, and 13% was for business.
Worldwide Market Forecast 2019-2038
24
Looking at the relationship between income level and the number of foreign trips, it is understood that
the more GDP per capita increases, the more demand for foreign travel increases. It is especially
apparent that in countries whose GDP per capita is still low and less than $10,000, demand for foreign
travel tends to increase rapidly with the increase of their GDP per capita. In comparison, such demand
in economically mature countries is less sensitive to GDP per capita.
It is expected that hereafter, if economic growth and rise of income level are followed by population
expansion in emerging countries, a massive new middle class will be created, and consequently,
demand for aviation will increase substantially.
0.01
0.10
1.00
10.00
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000
Num
ber o
f For
eign
Tra
vels
pe
r per
son
per y
ear
GDP per Capita (2015US$)
Relationship between Income Level and Number of Foreign Travels* (1) (2015)
Source : UN, IBRD, IHS, JADC
USA
ItaliaRussia
China
Brazil
India
Switzerland
France
Japan
HungaryGerman
Canada
Australia
Netherland
UK
New Zealand
( * : including land and sea travels )
0.00
0.01
0.10
1.00
10.00
0 10000 20000 30000 40000 50000 60000 70000 80000 90000
Num
ber o
f For
eign
Tra
vels
per p
erso
n pe
r yea
r
Real GDP per Capita (2015US$)
Relationship between Income Level and Number of Foreign Travels* (2) (1995-2015)
China India
Russia S.Korea
Thailand Colombia
Czech Frnace
UK USA
Japan 系列12( * : including land and sea travels )
Worldwide Market Forecast 2019-2038
25
5. Air Passenger Market
5.1 Air Passenger Market Trend
Air passenger traffic
Entering the 21st century, global air transport based on RPK experienced a significant decline due to
the 2001 terrorist attacks in the U.S., the Iraq War and SARS in 2003, the U.S. financial crisis in 2008,
and the subsequent debt crises in Europe. Furthermore, the rise of fuel prices starting from 2005 lasted
until 2014, which weighed on airlines and pushed down passenger traffic demand. However, it appears
that in response to declining fuel prices since the autumn of 2014, the RPK started to recover, grew at
a fast pace of around 6.5% per year, and almost returned to the pre-2001 growth level by 2018. Thus,
air passenger traffic demand is affected by shocks due to external conditions, but whenever it happens,
such demand shows a tendency to resume growth and return toward its initial growth curve.
It is understood that air passenger traffic demand is affected by matters such as income level, airfare,
population, distance, frequency, seasonality and availability of alternative modes of transportation.
Above all, income levels and airfares are strongly related to demand. Recently, air travel demand has
tended to fluctuate markedly due to exogenous shocks, such as war, terrorism, disease, and financial
crisis. While any fluctuations in air travel demand caused by income or airfares are long-lasting and
structural, any effects of terrorism or war tend to instantly cause a huge drop in such demand which
can recover in a short time if the cause is removed.
For management of airlines, it has become more important than ever to take measures against the
fluctuations caused by such exogenous shocks (or event risks).
0
4
8
12
16
20
24
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
RPK (×1012 )
Transition of World Air Passenger Traffic (RPK)Actual Forecast 補間線
Source : IATA, ICAO
1980-
1982
2001-
2003
Growth Rate1988-1998 4.6%1998-2008 4.6%2008-2018 6.0%1998-2018 5.3%2018-2038 4.4%
2005-2014
2008-
20091991-
1993
The shaded portions indicate the air recession and the like.The orange frame shows the period of rising crude oil prices.
The shaded portions indicate the air recession and the like. The orange frame shows the period of rising crude oil prices.
Worldwide Market Forecast 2019-2038
26
Liberalization and LCC
LCCs (Low-cost carriers) were established by the airline liberalization in countries in North America,
Western Europe and other regions. In 2012, LCCs were established in Japan and Taiwan, which were
called blank areas for LCCs. Additionally, airline liberalization is in progress in emerging countries,
along with which, many LCCs have been established.
-8
-6
-4
-2
0
2
4
6
8
10
12
-16
-12
-8
-4
0
4
8
12
16
20
24
1988 1993 1998 2003 2008 2013 2018 GD
P G
row
th (%
)
RPK
Gro
wth
(%),
Yie
ld G
row
th (%
)
FinancialCrisis
Iraq WarSARS
Terror AttacksGulf War
Yield
RPKGDP
Crude Oil PriceDown
Worldwide Market Forecast 2019-2038
27
In 2018, 31.9% of available seats of intra-regional routes in the world were supplied by LCCs. Irish
LCC Ryanair had maintained the top position among international flights for at least five years in
terms of the number of passengers. In Southeast Asia, LCCs accounted for 56.4% of available seats
on intra-regional routes in 2018, and some forecasts predict that it will exceed 70% in 2020. In regional
lines in Africa and China, the shares accounted for by LCCs is about 11.6% and 9.7% respectively,
but their shares are also expected to increase further in these regions due to the expansion of aviation
liberalization.
In addition, LCCs are advancing into international markets as well as domestic and regional ones. This
seems to be viable in terms of cost if the flight distance is short enough for the crew and aircraft to
return without spending the night at the destination, which will enable operation in a daily cycle.
Forays into long-distance international routes that require crew lodgings and the replacement of
equipment and personnel are difficult in many cases because of the costs, and entries and withdrawals
were seen one after another in the past. In 2016 and thereafter, however, Norwegian and JetBlue began
to make an attempt at Atlantic routes, and in 2017, IAG launched LEVEL and Air France launched
JOON, both of which are medium- and long-haul LCCs, respectively (then, JOON terminated
operations in June, 2019). AirAsia X, Scoot, and other airlines have planned to revive long-distance
routes that have been suspended. Japan Airlines also established ZIPAIR Tokyo, a preparatory
company for a new medium- and long-haul LCC, in April, 2019 to open Narita-Seoul and Narita-
Bangkok routes in 2020, and the LCC plans to launch Pacific routes in the future. Future trends in
LCCs’ long-distance routes are now attracting interest.
According to “Research on the economic ripple effect regionally by the entry of LCCs” (2015) by the
Policy Research Institute for Land, Infrastructure, and Transport (or MLIT, Japan), 17% of LCC users
responded in the questionnaire, “Without LCCs, I would not have made this trip”. It could also be
said that LCCs create new air passenger traffic in Japan as well. The entry and expansion of LCCs into
the market will make airfares so low that it will drive further increases in air travel demand, and even
those who were previously unwilling to use airlines or did not use them often because of expensive
airfares will find it easier to use them.
It was said that LCCs had a 50% to 60% cost advantage over FSCs (full service carriers), but LCCs
have incurred rising labor-related costs against a strong performance backdrop. On the other hand,
FSCs have continued to streamline their business and reduce costs in order to survive, and the gap
between the two types of companies is getting smaller. Although the low cost makes LCCs’ business
viable despite cheap airfares, there are actually cases where impossibly cheap airfares are offered in a
price competition between LCCs. These LCCs are financially weak and vulnerable to big changes in
the economy and event risks. In Europe, there are some LCCs, such as Monarch Airlines (UK),
Primera Air (Denmark) and WOW air (Iceland), which suddenly ceased operations or went bankrupt.
In addition, it is observed that there were mergers between LCCs, like Southwest Airlines and AirTran
Worldwide Market Forecast 2019-2038
28
Airways in the U.S., and Peach Aviation and Vanilla Air in Japan. With the market maturing, further
consolidation will possibly continue.
At the end of 2018, in the Asia-Pacific Region LCC market, which was crowded with 59 companies,
some LCCs have experienced severe financial situations due to increased competition, and have
tended to change their strategy from the conventional expansion of networks to an emphasis on more
profitable routes.
High-speed rail
Partly due to an issue related to greenhouse gas emissions, such countries as Brazil, India, the U.S.,
and Indonesia have announced new plans for high-speed railroad construction. However, since such
construction and maintenance of a railroad line infrastructure require a lot of time and money, and
recovering those costs stretches into the long term, long-term demand forecasts and careful
management decisions are required in order to execute such plans. In that regard, airplanes can be
flown as long as airports are built, so air routes can be established with relatively lower infrastructure
construction costs, making entry to the business easy.
An airplane can travel at nearly three times the speed of a high-speed train, and the longer the travel
distance, the greater the advantage becomes for the former. Accordingly, competition between these
two means of transportation occurs mainly in short-haul routes. Competition between air transport and
railway transport has already occurred in Japan, Europe, China, South Korea, and Taiwan, which have
high-speed railway networks. Above all, the competition is fierce at routes where it takes one to two
hours to complete travel by airplane. It is said that a high-speed railway has the advantage on routes
Worldwide Market Forecast 2019-2038
29
which a high-speed train can complete by traveling within four hours.
Not only do high-speed railroads connecting major cities with a large population have large number
of passengers, they are also used for business travel. Such routes are important for airlines as well.
Railroads can provide direct access between city centers, are less influenced by weather, do not require
passengers to set aside time for security checks, and have no restrictions on the use of mobile phones
and the Internet. They can also have meals even if passengers do not use first-class cars. As such, many
people feel trains are safer, surer, and far more comfortable than airplanes, and use high-speed trains.
LCCs have also flown their airplanes on such routes so lower airfares have been available. Recently,
high-speed rail fares have also dropped and even train fares that cost about 50% of regular airfares or
even lower than LCC fares have become available in Europe. There are several instances in which it
is believed that high-speed railways caused the closure of LCC routes. In addition, the operating speed
of high-speed rail trains is increasing every year, resulting in shorter travel times, and such a situation
is becoming harder and harder for airlines to handle.
Passenger load factor
The global passenger load factor reached 81.9% on average in 2018. It increased by about 13% over
the past 20 years, from 68.7% in 1998. In North America and Europe, the annual average passenger
load factor reached 83.8% and 84.5% in 2018 respectively, and the U.S. exceeded a passenger load
factor of 85% during the busy season of 2018. Passenger load factors in other regions also have been
rising every year, with many exceeding 80% on average.
0
10
20
30
40
50
60
70
80
90
100
N.AMERICA EUROPE ASIA-PACIFIC M.EAST L.AMERICA AFRICA CIS WORLD
Load Factor by Region1998
2018
2038
Load Factor (%)
Worldwide Market Forecast 2019-2038
30
This high passenger load factor is the result of striving to improve RASK (revenue per ASK). while
making the increase of ASK lower than that of RPK, in order for airlines to secure their profits in
response to the significant rise in the break-even load factor due to a decrease in revenue resulting
from lower airfares due to competition between airlines including LCCs, and an increase in
operating costs resulting from soaring fuel prices.
Crude oil prices, which had soared for nearly 10 years, have fallen sharply since the autumn of 2014.
However, forecasts about future crude oil price trends, while they differ in matters of degree, have
predicted rising prices due to increased demand for oil due to economic recovery and economic
development. In addition, in an environment where every country should be required to achieve
significantly lower CO2 output towards 2050, it will be difficult to carelessly increase consumption of
fuel. Since passenger fares are also not expected to rise significantly, due in part to competition among
airlines, the global passenger load factor is believed to be maintained at a high level considering that
airlines will precisely adjust demand and supply in the future, and it is estimated to rise from 81.9%
in 2018 to 83.4% in 2038.
Passenger yield
The world average real passenger yield fell 2.2% per year over the past 20 years, between 1998 and
2018. Major factors that reduced the real yield over that period were airlines’ efforts to reduce
operating costs by introducing new models of airplane with better operational economy, and their
streamlined operation. Recently, the advent of LCCs and their competition with existing airlines have
been added to these factors.
Going forward, there would be room for airfares to be further lowered due to further improvement of
airplane operational economy and corporate efforts by airlines, competitiveness among airlines
including LCCs, the falling of fuel prices that continued to soar for about a decade, and others.
However, even cost reductions through restructuring and mergers/acquisitions by airlines seem to
almost reach their limit, which means the trend will have a more moderate decline in airfares than ever
before.
60
65
70
75
80
85
90
2003 2005 2007 2009 2011 2013 2015 2017 2019
US Airline Passenger Load Factor
Monthly Average
Annual average
%
( Fuel price soaring period )
Worldwide Market Forecast 2019-2038
31
5
10
15
20
25
30
1988 1993 1998 2003 2008 2013 2018
Trend of Real Yield by Region2015 US cent/RPK
World
source: AEA, A4A, ICAO, IATA, CIRIUM
North America
Western Europe
Worldwide Market Forecast 2019-2038
32
5.2 Air Passenger Traffic Forecast
For the 20-year period covering 2019 to 2038, the global RPK will grow at 4.4% per year, from
8.259×1012 passenger kilometers in 2018 to 19.40×1012 in 2038, approximately 2.3 times the figure
for 2018. For the forecast period, the real passenger yield is set to fall 0.8% per year due to effects
including competition among airlines and fluctuations in fuel prices.
0
4
8
12
16
20
1998 2003 2008 2013 2018 2023 2028 2033 2038
2.3 times
ForecastActual
5.3% p.a.
World Air Passenger Traffic ForecastRPK (×1012 )
4.4% p.a.
2.8 times
0 1 2 3 4 5 6 7 8
Africa
CIS
Latin America
Middle East
North America
(East Europe)
(West Europe)
Europe
(Japan)
(Northeast Asia)
(Oceania)
(South Asia)
(Southeast Asia)
(China)
Asia-Pacific
Traffic in 2018
Increase from 2019 to 2038
RPK (×1012)
World Air Passenger Traffic Forecast by Region
5.7%
6.5%3.1%3.1%
3.0%4.3%
3.9%8.4%
4.7%3.6%
3.1%
2.4%3.8%
5.7%
5.3%
Breakdown of Europe
Breakdown of Asia/Pacific
Worldwide Market Forecast 2019-2038
33
Looking at air passenger traffic by region, North America and Europe (Western Europe and Eastern
Europe) will have a lower average growth rate over 20 years than the other regions in the world due
to the maturation of their markets, at 3.1% and 4.3% respectively. Because of this, the RPK of North
American airlines will increase from 1.856×1012 passenger kilometers in 2018 to 3.442×1012
passenger kilometers in 2038, while the RPK of European airlines will increase from 1.974×1012
passenger kilometers to 4.559×1012 passenger kilometers in the same period, and the global market
share will contract from 22% and 24% respectively in 2018 to 18% and 23% respectively in 2038.
Asia-Pacific and Middle East airlines will increase their share in place of European and North
American airlines. Asia-Pacific Airlines have experienced a growth of 7.4% per year in RPK over the
past 20 years, and this region has grown to be the largest market in the world. In the future, China,
ASEAN countries and India will take center stage and continue a growth of 5.3% per year in RPK,
expanding from 2.781×1012 passenger kilometers in 2018 to 7.784×1012 passenger kilometers in 2038,
2.8 times higher. The share will grow from 34% to 40%.
Looking at the annual growth rate of airline passenger demand by region, Chinese airlines have
enjoyed growth at an average rate of 12.3% for the past 20 years. Although this will slow to 5.7% over
the next 20 years due to recent economic uncertainty and the maturation of the market, it will retain
strong growth potential, and the RPK in 2038 will be three times that in 2018, growing from
1.251×1012 passenger kilometers in 2018 to 3.768×1012 passenger kilometers in 2038.
Major growth is expected also in South Asian airlines, mainly India, at an annual growth rate of 6.5%,
and Southeast Asian airlines at an annual growth rate of 5.7%.
World Air Passenger Traffic Share by Region (RPK)
18%
21%
3%
2%10%5%
2%
19%
2%
10%
2%4% 2%
2038 Share
North America
Europe
East Europe
Northeast Asia
Oceania
China
Japan
Middle East
Africa
Latin America
(23%)
West Europe
Asia-Pacific(40%)
Others(19%)
CIS
Southeast AsiaSouth Asia
23%
23%
1%3%8%3%
2%
15%
2%
9%
2%5% 4%
2018 Share
North America
Europe
East Europe
Northeast Asia
Oceania
China
Japan
Middle East
Africa
Latin America
(24%) West Europe
Asia-Pacific(34%)
Others(20%)
CIS
Southeast Asia
South Asia
Worldwide Market Forecast 2019-2038
34
Middle East airlines took in a lot of transfer passenger demand, and showed an annual average growth
of around 11%, but since 2017, it has gradually slowed down. It is expected that they will show an
annual average growth of 4.7%, increasing from 0.753×1012 passenger kilometers in 2018 to
1.903×1012 passenger kilometers in 2038, and their market share is expected to increase from 9% to
10% in the same period.
Based on such an RPK and load factor, the total global ASK is estimated to grow at an annual average
of 4.3% over the next 20 years, reaching 23.25×1012 seat kilometers in 2038, which is 2.3 times what
it was in 2018.
5.3
2.8
5.7
4.1
9.3
5.1
11.7
3.8
1.2
12.3
5.5
6.9
9.17.9
4.4
3.13.6 3.9
8.4
3.84.7
3.1 3.0
5.7
3.1
5.76.5
2.4
0
5
10
15
20
World NorthAmerica
LatinAmerica
WestEurope
EastEurope
Africa MiddleEast
Oceania Japan China NortheastAsia
SoutheastAsia
SouthAsia
CIS
1999-2018
2019-2038
World Air Passenger Traffic Growth by RegionRPK Growth per Year (%)
Worldwide Market Forecast 2019-2038
35
6. Passenger Airplane Demand
6.1 Passenger Airplane Analysis ASK distribution by route distance
Passenger airplanes are chosen on the basis of their suitable route distance by airlines. According to
ASK distribution by route distance for scheduled nonstop services, passenger turboprop airplanes are
mainly operated within a range of 900 km, and the peak distance ranges from 400 to 600 km.
Regional jets are mainly operated on routes ranging from 400 to 1,500 km in regions other than North
America, but in North America, which is a main market for them, their routes extend to about 2,000
km.
Narrow body jets can cover 500 to 5,000 km, and they are mainly operated on routes ranging from
1,000 to 2,500 km. Routes within 3,500 km account for 91% of ASK. For routes of 4,500 km or less,
they account for 80% of total ASK worldwide, and looking at all distance groups, they account for
52% of total ASK worldwide.
Wide body jets are operated in a wide range of routes from short distance to long distance, mainly
covering 6,000 to 9,500 km, and routes from 4,500 to 13,000 km account for 79% of total ASK of
wide body jets.
0
200
400
600
800
1000
1200
TurbopropRegional JetNarrowbody JetWidebody Jet
Range (km)
Range Category and ASK DistributionASK (×10 9 )
Long RangeMediumRange
ShortRange
Regional
source: OAG September 2018
Worldwide Market Forecast 2019-2038
36
ASK distribution by airplane seating capacity
According to ASK distribution by airplane seating capacity in accordance with route distance
categories, in the route distance category of 1 to 1,000 km, you can find a small peak of 40-99 seats in
passenger turboprop airplanes and regional jets, and a large peak of 120-169 seats (A320, 737-700/800,
etc.) in narrow body jets, which means airplanes with a 120-169 seat capacity are mainly used.
Even within the range of 1,001 to 2,000 km, 120-169 seat airplanes are the largest, and 170-229 seat
narrow body jets (A321, 737-900ER, 757, etc.) and 230-399 seat wide body jets are also operated.
In the range of 2,001 to 4,500 km, 120-169 seat airplanes are also mainly used, and 170-229 seat
narrow body jets and 230-399 wide body jets (A330, 767/787, etc.) are operated. In this range, partly
because the route distance is longer, relatively large airplanes such as 170-229 seat narrow body and
230-399 wide body jets are used more actively than for over 1,001-2,000 km.
In the range of 4,501 km or more, 310-399 seat jets (A340, 777, etc.) are mainly operated, followed
by 230-309 seat jets (A330, 787, etc.), 500-800 seat jets (A380), and 400-499 seat jets (747). 400-499
seat airplanes have declined in number due to the recent decrease in the number of 747 jets.
Increase of average seat numbers / Upgage of airplanes
Comparing 2004 with 2013 with regard to the relationship between the number of arrivals/departures
and the number of passengers at the top 50 airports in the world, the number of arrivals/departures did
not change much, while the number of passengers increased. While the average number of passengers
per departure/arrival in 2004 was 87, it increased 1.3 times, to 113 in 2013. During this period, the
1-10001001-2000
2001-45004501-
0
200
400
600
800
1000
1200
1400
1600
1800
001-019 020-
039 040-059 060-
079 080-099 100-
119 120-169 170-
229 230-309 310-
399 400-499 500-
800
Route ASK Distribution - World
Aircraft Size (Seats)
Range (km)
ASK (×10 9 )
Source : OAG September 2018Wide Body
Narrow Body
Regional,
Turbo Prpo
Worldwide Market Forecast 2019-2038
37
global load factor increased
by 6.7%, from 73.1% to
79.8%, and even without this
increase, it can be seen that
the average number of seats
per airplane increased. This
suggests that airlines are
responding to the increased
passenger numbers by
increasing the number of seats
or upgaging their airplanes.
Due to the advent of regional
jets, the introduction of twin-engine airplanes capable of long-distance operation, and widespread use
of smaller jets with high frequency in operation, the average number of seats per airplane had
decreased by the mid-2000s. However, since the late 2000s, with the emergence of LCCs, rising fuel
prices, slot limitations due to airport congestion, reorganization of redundant routes and reduction in
the number of flights due to airline mergers, the average number of seats per airplane on routes of
2,000 km or shorter has first shown an increase. Then, since 2012, when the passenger load factor
went up to its limit and a considerable number of large four-engine airplanes had been retired, the
average seat number even on medium- and long-distance routes exceeding 2,000 km has shown an
increase. There have been more seats available on airplanes, and airplanes within the same family have
been enlarged.
90
95
100
105
110
115
120
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Inde
x (2
001=
100)
Trend of Average Seats per Airplane
Source: OAG
1,000-2,000km
<1,000km
2,000-4,500km>4,500km
Worldwide Market Forecast 2019-2038
38
Airplane retirement
The retirement age (or replacement age) of passenger airplane depends on changes in economic conditions (demand for transport), changes in fuel prices, compliance with noise regulations or the like, advent of new models of airplanes with new technologies, etc.
20182016201420122010200820062004
2002
2000
1998020
4060
80
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50
Year
No.
of R
etire
d Ai
rpla
nes
Age of retirement
Trend of Passenger Jets Retirement
Western Build Passenger Jets OnlySource : CIRIUM
201820162014201220102008200620042002200019980
10
20
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54
Year
No.
of R
etire
d Ai
rpla
nes
Age of Retirement
Trend or Passenger Turboprop Retirement
Western Build Passenger Turboprops OnlySource : CIRIUM
Worldwide Market Forecast 2019-2038
39
Looking at recent years, the retirement of aging airplanes to which the Chapter 2 Noise Standard
of ICAO Noise Standards applies (those aged around 30 years) took place intensively until 2002. The
several years following the retirement of aging airplanes was relatively calm, when airplanes aged
around 25 years constituted the majority of retired planes each year (the average retirement age of
airplanes was around 27 years). However, since fuel prices began to rise in 2005, airlines were forced
to replace even relatively young airplanes, not to mention aging ones with high maintenance costs,
with even more fuel-efficient ones. As a result, especially since 2009, the retirement age of airplanes
has rapidly been getting younger, with those aged around 22 to 25 years constituting the majority of
retired airplanes and even those aged around 18 years being retired. Thereafter, the stabilization of fuel
prices since 2015 seems to have calmed down a temporary rush for retirement/replacement of
airplanes; yet, the average retirement age of airplanes dropped to approx. 23 years, which still remains. While the pressure for retirement has been eased due to fuel prices stabilized at a low level, it is believed the current level of service life will be maintained for a while, partly because of the huge back-order. In addition, in recent years, there have been an increasing number of airplanes which are frequently
operated due to the growth of LCCs, and as a result of being overused, these airplanes may be retired
at an earlier age than the average retirement age for existing ones. Since LCCs are still newcomers to
the industry, it seems that there are a small number of airplanes that have actually reached their service
lives; however, it is believed that in the future, this type of earlier retirement will become apparent and
result in lowering the average retirement age for airplanes, especially narrow body jets.
Looking at passenger jets from Western manufacturers, in 2005, 306 airplanes were retired, with an
average retirement age of 27.5 years. Since 2008, over 400 airplanes were retired each year; since
2011, almost every year experienced the retirement of over 500 airplanes; and in 2017, 483 airplanes
were retired. Furthermore, during this period, the average age of retired airplanes declined from 27-
28 years to approx. 23 years. In 2017, it was 23.3 years. At present, the majority of retired airplanes
are ones that were delivered from the mid-1980s to the mid-1990s.
Looking at passenger turboprop airplanes manufactured in the West, 100 airplanes were retired in 2005
with an average retirement age of 25.8 years, but 123 were retired in 2012 (average age of 26.1 years),
and 93 were retired in 2017 (average age of 26.0 years). The number of turboprop passenger airplanes
retired yearly has grown smaller than before, similar to the trend of passenger jet airplanes. However,
the average age of retired turboprop passenger airplanes has gradually increased over the past 50 years
or so, in contrast to that of passenger jet airplanes, and in recent years the level has reached 26 to 28
years. Partly because turboprop passenger planes have been reappreciated due to their superior fuel
efficiency in the face of soaring fuel prices, and suitable substitute airplanes with certain capacities in
terms of number of seats are not in production, turboprop passenger airplanes now tend to experience
longer use than passenger jets.
Worldwide Market Forecast 2019-2038
40
Fuel prices
Crude oil prices, or fuel prices, greatly affect air transport economy. Soaring crude oil prices make the
global economy (GDP) cower, and such soaring fuel prices, together with rising airfares (yield), will
prevent the growth of demand for air transport (RPK). The recent soaring crude oil prices came to an
end after about 10 years. However, there is always a possibility that crude oil prices would rise again
due to a future change in the balance of supply and demand, or an incidental or external factor. Many
forecasts by specialized institutes indicate that crude oil prices will be on a rising trend; yet, relatively
lower prices are set by some forecasts.
The idea that crude oil prices will be maintained as they are and that they will rise has strong arguments
from contradictory perspectives such as expansion and shrinkage of demand for crude oil due to global
economic growth and promotion of alternatives to fossil fuel, production adjustment by OPEC, and
increasing production by non-OPEC countries. The JADC believes that supply will not be tightened
for a while, but predicts that it will moderately increase, considering increasing production by non-
OPEC countries, decreasing demand for conventional crude oil due to commercialization of shale oil,
the idea that there are many oil-producing countries whose primary balance is still negative at the
current level of crude oil prices, and other factors. The graph below shows the pricing used by the
JADC. For the forecast period, crude oil prices will rise at 0.2% on average per year, and will be
included in changes in RPK through the changes in yield (please refer to Appendix F as well).
In-service fleet
Globally, there were 5,523 passenger turboprop airplanes and 12,687 passenger jets in service in 1998,
while in 2018, there were 3,673 passenger turboprop airplanes and 23,904 passenger jets. During this
period, the number of the former decreased by 1,850 units, and that of the latter increased by 11,217
units.
0
50
100
150
200
250
1990 2000 2010 2020 2030 2040Aver
age
Spot
Pric
e (2
018U
S$/b
bl.)
Changes and forecasts in crude oil prices (Brent Crude Oil)EIA High Oil PriceCase
EIA Low oil and gasresource andtechnologyEIA Reference Case
EIA High oil and gasresource andtechnologyIHS reference ( BrentBase )
JADC
EIA Low Oil PriceCase
Source : EIA, IHS Markit
Brent Crude Oil Price(Average Spot Price)
Worldwide Market Forecast 2019-2038
41
The number of airplanes in service has been increasing with the rise in income level thanks to
economic growth, and the accompanying increase in the travel demand. There is evidently a positive
correlation between the number of airplanes in service per population of one million and GDP per
capita, although there may be differences of varying degrees depending on the size of national territory,
the development of ground transportation networks, etc.
At the end of 2018, there was an order backlog for 15,007 jet airplanes (passenger jets and jet
freighters), of which 31% were orders from airlines in the Asia-Pacific region. In Asia, especially in
China, South Asia and Southeast Asia, a large number of airplanes have been ordered with the strong
air travel demand.
In those regions, GDP per capita (USD as of 2015) is expected to be about 24.1 thousand dollars in
China, 4.7 thousand dollars in South Asia (mainly India), and 8.8 thousand dollars in Southeast Asia
in 2038. These figures are 2 to 2.5 times the level of 2018. Since an increase in income along with
economic growth and growth in travel demand along with increase in income are expected, these
regions will have strong demand for airplanes in the days ahead.
GDP per Capita vs. Passenger Jet Airplanes per Capita
0.01
0.1
1
10
100
100 1,000 10,000 100,000
GDP per Capita (2010US$)
No.
of A
irpla
nes
per 1
mill
ion
pers
ons
Passenger jet airplane in service only.Asia-Pacific includes China, Japan, Other Asia, South Asia and Oceania.source: Ascend, UN
North America
Europe
Middle East
Asia-Pacific
Africa
Latin America Japan
China
Oceania
South Asia
Other Asia
Worldwide Market Forecast 2019-2038
42
6.2 Passenger Jet Airplane Demand Demand for transport is expected to increase (RPK: an annual average of 4.4%) due to global
economic growth (real GDP: an annual average of 2.8%) even though it is in a downward trend, and
thus, the fleet size required in 2038 to meet a required ASK will increase 1.69 times, from 23,904
airplanes in 2018 to 40,301 airplanes in 2038, despite some factors suppressing the increase of required
airplanes, including rising load factors, introduction of airplanes with more seats available, and the
extension of annual flight hours of airplanes by more efficient maintenance. The number of delivered
passenger jets in the 20 year period from 2019 to 2038 will be 35,312 airplanes. Among these, 18,915
airplanes will replace current airplanes, accounting for 54% of total new deliveries. The remaining
16,397 airplanes will be due to new demand in response to growing air passenger demand.
At the end of 2018, 3,445 regional jets with 100 or fewer seats were in service. The number of
passenger jets in service will remain almost unchanged at 3,452 in 2038, but the share of airplanes in
service will decrease from 14.4% to 8.6%. Between 2019 and 2038, 3,104 jets will be retired, and
3,111 new jets will be delivered, an 8.8% share of new deliveries.
With the advent of new, more economically efficient regional jets, from the latter part of the 1990s
through to the early 2000s, the number of regional jets with 50 or fewer seats increased, taking away
demand from passenger turboprop airplanes, opening new routes, and taking mainline low-demand
routes away. However, thereafter, under such circumstances as aviation industry recessions after the
September 11 attacks in the U.S. and rising fuel prices, airplanes in this class whose CASK was high
due to their small size were so high cost ones that they hastily needed to be changed to larger ones,
and because of this reason as well as their shorter service life due to their structure based on bizjets
0
10,000
20,000
30,000
40,000
2018 2038
No. o
f Airp
lane
s
Fleet Developments of Passenger Jet40,301
23,904
16,397
18,915
4,989
35,312 Replacement
Growth
Retained
46%
54%
New Deliveries
Worldwide Market Forecast 2019-2038
43
that were their prototype, they were reduced in number. The production of regional jets with 50 or
fewer seats such as CRJ100/200 and ERJ135/145 jets has already ceased.
Recently, in many cases, even a regional jet has been equipped with first- or business-class seats, or
constituted by two classes, so slightly larger airplanes are required. Because the restriction by the
scope clause for regional jets has been relaxed to 76 seats, major U.S. airlines have settled on
introducing 76 seat airplanes as replacements for 50 seat or smaller airplanes, and have placed orders
for the CRJ900, ERJ175, and MRJ90. These airplanes are rather large with the standard number of 86
to 90 seats in mono class, but the total seats can be reduced to 76 with the installation of a first class
section. Along with the seat number, the scope clause imposes a limitation on the maximum takeoff
weight of 86,000 lbs. While certain measures must be taken for airplanes exceeding this weight
limitation, such airplanes will be the staple airplanes in service from now on.
The types of airplanes in the 90-seat class that are in service or being developed include CRJ1000,
ERJ190/190E2, MRJ90, ARJ21, and Superjet100. In order to increase demand for such airplanes,
especially in the U.S., it is necessary to liberalize the scope clause to increase the number of seats to
80 or 90. With that in mind, regional jets with 60 to 99 seats, which are the main staple of regional
jets, will increase from 2,369 in service in 2018 to 3,333 in 2038. The number of airplanes delivered
in this class will be 2,992 units throughout the 20-year period.
At the end of 2018, 15,947 narrow body jets with 100 to 229 seats were operated, but they will increase
to 25,853 in 2038, and the share of in-service airplanes will be 64.1%. Between 2019 and 2038, 12,602
jets will be retired and 22,508 new jets will be delivered to airlines. The share of new deliveries will
be 63.7%.
3,445 3,452 3,111
15,947 25,853 22,508
4,512 10,996 9,693
0%
20%
40%
60%
80%
100%
2018 Fleet 2038 Fleet New Deliveries 2019-2038
Shar
e
Fleet and New DeliveriesRegional Jet Narrowbody Widebody
Worldwide Market Forecast 2019-2038
44
One recent trend has been the popularity of such larger airplanes, such as the A320/A321 and the 737-
800/-900ER/MAX-8, rather than the A319 and the 737-700 from the viewpoint of soaring fuel prices,
airport congestion, etc. There is also a trend toward a higher average number of seats. For example,
the average number of seats on 737-800 belonging to European airlines is already 180. Some airlines
require the 757 successor or airplanes of the class with superior high-temperature and high-altitude
performance, and the ability to cross the Atlantic Ocean with some 200 seats.
While LCCs are mainly operating on short- and medium-haul routes up to 4 or 5 hours flights which
the A320 and 737 jets currently in use can fly, they also seem to operate longer flight ranges along
with the maturing of that transport market. The demand for airplanes that are bigger than mainstay
airplanes and can fly longer distance is likely to increase in the future. While narrow body airplanes
with a lower CASK compared with wide body airplane are preferred by airlines that greatly pay
attention to cost-performance, they seem to be approaching their limits as single-aisle airplanes due to
their seat capacity, and there is a possibility that they will be replaced by twin-aisle airplane.
Nonetheless, as far as the number of airplanes is concerned, over the next 20 years, the demand for
narrow body jets will remain the highest among all types of jets, and the forecast shows that among
narrow body jets, the largest deliveries will be those with 120 to 169 seats, totaling 12,576 units and
the number of airplanes in service in this class will be 15,346 in 2038. With the need for airplanes with
larger capacity or longer flight ranges, there will be large deliveries of airplanes with 170-229 seats,
amounting to 8,686 units. The demand for narrow body jets with 100 to 119 seats will be mainly for
the A220-100 and ERJ 195, amounting to 1,748 units.
1,076 0
2,369
341 592 73
12,689
2,770 2,666
502 1,750
568
2,356
613 406 122 119
2,992
1,748
12,576
8,184
5,534 4,129
30 0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2018 2038 2018 2038 2018 2038 2018 2038 2018 2038 2018 2038 2018 2038 2018 2038
Total 2018 Year-End: 23,904 2038 Year-End: 40,301 2019-2038 New Deliveries:
35,312
1,076
119
2,369 3,333
592
1,821
12,689
15,346
2,666
8,686
1,750
6,102
2,356
4,742
406 152
20-59 Seats
60-99 Seats
100-119 Seats
120-169 Seats
170-229 Seats
230-309 Seats
310-399 Seats
Over 400 Seats
Wide body Jet Narrow body JetRegional Jet
No. of Airplanes Passenger Jet Fleet and Delivery Forecast by Seat Category
2018 2038
ExistingRetained
New Delivery
Worldwide Market Forecast 2019-2038
45
On the other hand, it is convenient for some to segment the narrow body jets by 150 seats. For the
sake of convenience, looking at the demand for narrow body jets in two categories, the 101-150 seat
class and the 151-200 seat class, over the next 20 years, there will be deliveries of 10,588 units in the
101-150 seat class, and 11,920 units in the 151-200 seat class.
The number of wide body jets with 230 or more seats will increase from 4,512 at the end of 2018 to
10,996 in 2038, with the share increasing from 18.9% to 27.3%. 3,209 jets will be retired and 9,693
new jets will be delivered to airlines between 2019 and 2038. The share of new deliveries will be
24.1%.
The main markets for wide body jets are medium- and long-haul international routes, and domestic
routes with a high demand. With the introduction of highly fuel-efficient, mid-sized airplanes excellent
in operational range performance, such as the 787, it is possible to enter the long-haul market where
airlines have found it difficult to profit from larger airplanes such as the 747 and the 777. Among wide
body airplanes, deliveries of jets with 230 to 309 seats are expected to be the most numerous at 5,534
units, and the number of jets in service will be 6,102 in 2038. Deliveries of jets with 310 to 399 seats
will be 4,129 units, and the number of jets in service will be 4,742 in 2038.
Due in part to airlines’ recent preference for medium-size airplane, sales of wide body airplane,
especially of large jets with 400 or more seats, have not been going well. In the long run, some quarters
believe that there will exist demand for large jets mainly flying on high-passenger traffic routes
connecting major cities mainly because of limitations of the number of flights caused by airport
congestion, long-term increase of fuel prices, and increasing concentration of population into urban
6640
817
4949
969
7546
2193591 99
3691
1392546 162
1511329 682109 525 102
1370374
1492274 802137
1105225
6857
7625
14384
660
7041
638
3570
1781694
2156 21711001 1118
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
Passenger Jet Fleet and Delivery Forecast by Region
2018 Year End: 2038 Year End: 2019-2038 Deliveries:
Total Fleet23,90440,30135,312
Retained
N.of Airplanes
New Delivery
7,674
NorthAmerica Europe Asia
PacificMiddleEast
8,594
16,577
2,530
LatinAmerica Africa CIS
2,445 1,138 1,343
Japan OceaniaSouthAsia
SoutheastAsia
NortheastAsia
China
Worldwide Market Forecast 2019-2038
46
areas with population growth and an advance in urbanization, but it is expected that there will be some
demand for replacement of airplane currently in service, considering actual orders that airplane
manufacturers have received. The number of airplanes in service with 400 or more seats will decrease
from 406 in 2018 to 152 in 2038, and after ceasing the production of the A380, only 30 units will be
delivered in the next 20 years.
By region, North America has a large number of airplanes in service, and 6,640 airplanes are in service
at the end of 2018, which will increase to 7,674 by 2038. However, because there will be a large
number of new deliveries in Europe and China during this period, North America will be ranked third
and its share of airplane in service by region will decrease from 28% to 19%. There will be 6,857 units
delivered during that period, making an 19% share of new deliveries.
In Europe, the number of airplanes in service, which was 4,949 at the end of 2018, will increase to
8,594 by 2038, and its share will expand from 21% to 24% during this period. The number of new
deliveries during these two decades will be 7,625, with the share being 22%, which will be the largest
in the world.
In China, the number of airplanes in service was 3,691 at the end of 2018, which was the third largest
in the world. However, the number will increase to 8,433 by 2038, and China will surpass North
America as the second largest market in the world. The number of new deliveries during these 20 years
will be 7,041, with a 20% share. In addition, 2,286 of the newly-delivered airplanes will be wide body
jets (with a 24% share of the number of newly-delivered wide body jets in the world). China will thus
be a huge market for wide body jets surpassing the Middle East (1,139 new deliveries with a 12%
share) and Europe (2,101 new deliveries with a 22% share).
In Latin America, Southeast Asia (mainly ASEAN countries), the Middle East, and South Asia (mainly
India), the passenger traffic demand is expected to grow at higher rates than the global average, and
the number of passenger airplanes in service will also increase. In these four areas, the number of
airplanes in service will be 2,445, 3,899, 2,530 and 1,881 respectively in 2038. Units delivered will be
2,171, 3,570, 2,156 and 1,781 respectively. The Middle East, especially, will see 1,139 new deliveries
of wide body jets, which will account for 53% of all new deliveries that will take place in this region.
In the CIS, 1,118 units will be delivered, with a total of 1,343 jets in service in 2038. The share of new
deliveries will be 3.2%.
Worldwide Market Forecast 2019-2038
47
6.3 Passenger Turboprop Airplane Demand Passenger turboprop airplanes with 15 or more seats were operated by airlines worldwide peaked at
5,908 units in 1994, but with the expanding popularity of regional jets, those airplanes declined in
number thereafter, and it was 3,673 at the end of 2018.
Currently, passenger turboprop airplanes are almost exclusively being operated on routes of 1,000 km
or less. For this distance range, some routes require a minimum of transportation services societally
and some routes are difficult to switch over to jets technologically. Therefore, even if airlines reduce
the amount of flights or withdraw from unprofitable routes, it is expected that a certain transportation
capacity will be maintained. Additionally, due to the rise of fuel prices that lasted for a long period,
fuel-efficient turboprop airplanes are revaluated, and orders began rising again in 2005.
Actually, in addition to the continued competition between 60 to 79 seat turboprop airplanes and
regional jets, since there are few models in production suitable for new procurement for turboprop
airplanes in the 80-99 and 20-39 seat class, it will be difficult to make more units even if they are more
highly evaluated. Turboprop airplanes in service will slightly increase from 3,673 at the end of 2018
to 3,914 at the end of 2038. During this period, 2,889 of these airplanes will be retired, and 3,130 new
airplanes will be delivered.
By region, the number of passenger turboprop airplanes in service is large in North America and
Europe, as in the case of passenger jet airplanes. However, 300 to 450 passenger turboprop airplanes
are used in each of the other regions, such as Latin America, Africa, Oceania, and Southeast Asia. It
can be said that this type of airplane is used widely throughout many regions, and not eccentrically
located.
0
50
100
150
200
250
300
350
0
100
200
300
400
500
600
1998 2003 2008 2013 2018
Jet F
uel P
rice
*(US
¢/G
allo
n)
No. o
f Ord
ered
Airp
lane
s
Trend of Orders for Passenger Turboprop
*Jet Fuel Refiner Price to End Users source : EIA, CIRIUM
Regional Jet
Jet Fuel Price *
Passenger Turboprop
Worldwide Market Forecast 2019-2038
48
Routes which require a minimum level of aviation services or geographically specific routes (e.g.,
routes to isolated islands) will continue to require turboprops, even if they are low in demand. It is
expected that airplanes with 15 to 19 seats will continue to be operated on such routes, and 346 units
will be delivered during the next 20 years. However, the number of such airplanes in service will
decrease from 1,291 in 2018 to 461 in 2038, and the airplanes out of service will be replaced by
3,673
784
2,889
241
0
1,000
2,000
3,000
4,000
5,000
2018 2038
No. o
f Airp
lane
s
Fleet Developments of Passenger Turboprop
3,914
Replacement
Retained
3,130
New Deliveries
Growth 8%
92%
714
95
585
136
1080
347
5622 7733 4318
315
142
223
65
366
67 4717
459
73
526
72
262
44
374451
1302
29 116 16
478360 303
32
412
377 182
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
2018
2038
Total Fleet 2018 Year End: 3,673 2038 Year End: 3,914 2019-2038 Deliveries:
3,130
Retained
N.of Airplanes
New Delivery
469
North America Europe Asia
PacificMiddle East
587
1649
49
485449
226
Latin America Africa CISJapan China OceaniaSouth
AsiaSoutheastAsia
NortheastAsia
Passenger Turboprop Fleet and Delivery Forecast by Region
Worldwide Market Forecast 2019-2038
49
airplanes with 20 to 39 seats as described below.
In 2018, 521 airplanes with 20 to 39 seats were in service. Since, among them, the economic lifespan
of some airplanes such as the DHC8-200 and Saab340 will end in the early 2020s, North American
airlines are especially calling for replacement airplanes. However, no suitable replacement airplanes
in this class have currently been in production. For that reason, some airlines take measures such as
refurbishment to extend the service life of airplanes.
The JADC, making a calculation based on high-speed cruise type turboprop airplanes with 30 seats in
this class, forecasts that demand for new airplanes will be 1,131 units for the next 20 years, and 1,139
units will be in service in 2038. However, since there has been no actual supply of new airplanes, an
averaged age of existing airplanes in service is 25.8 at the end of 2018 and it is increasing over the
years. Therefore, it has been hoped for some new models of airplanes to start their production.
Airlines operating on short distance routes with comparatively high demand for transport have an
interest in turboprop airplanes with 90 to 100 seats. Bombardier, in order to respond to this interest, is
developing the DHC8-400 with 86 seats as an option, and ATR is hoping to develop airplanes with 90
seats. Since no new airplanes in this class have currently been supplied, the JADC, making a
calculation based on high-speed cruise type turboprop airplanes with 90 seats, forecasts that demand
for new airplanes will be 438 units for the next 20 years. Although turboprop airplanes in this class
seem to compete with regional jets, the disadvantage of turboprop airplanes in their long flight hours
due to lower flight speed of them are small on shorter distance routes and moreover can be diluted by
the effect of time spent on the ground of airports.
1,291
115
521
8
626
73
1,235
588
0 0
346
1,131
149
1,066
438
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2018 2038 2018 2038 2018 2038 2018 2038 2018 2038
Total2018 Year-End: 3,6732038 Year-End: 3,9142019-2038 New Deliveries
3,130
1,139
222
20-39 Seats 40-59 Seats
No. of Airplanes
1,654
60-79 Seats15-19 Seats
461
New Delivery
Retained
438
80-99 Seats
Passenger Turboprop Fleet and Delivery Forecast by Seat Category
Worldwide Market Forecast 2019-2038
50
Since 2000, demand in the turboprop market has shifted to larger airplanes partly because there have
been no suitable small airplanes in production due to the exit of turboprop manufacturers from the
market, and other reasons. and with regard to passenger turboprops in service, the number of 60 to 79
seat turboprop airplanes in service including ATR72 and DHC8-400 was 1,235 (a share of 34%), the
largest part of the passenger turboprop airplane market, at the end of 2018, and it is expected that the
number will be 1,654 (a share of 42%) in 2038. The number of new deliveries in this period will be
1,066, which will constitute 34% of all new deliveries. The market is expected to grow in the next 20
years even by absorbing currently existing transport demand for 40 to 59 class airplanes.
In this class, newly manufactured airplanes have been supplied, and existing airplanes in service were
still young at the age of 7.8 on average at the end of 2018. On the other hand, the average age of 15-
19 seat class airplanes was 27.6, that of 20 to 39 seat class airplanes was 25.8, and that of 40 to 59 seat
class airplanes was 24.9, respectively, and it seems that airplanes that meet conditions including
economic efficiency which airlines hope for, have not been supplied even in a class in which airplanes
are still in production.
Worldwide Market Forecast 2019-2038
51
7. Air Cargo Market
7.1 Air Cargo Market Trend
Air cargo traffic
Global air cargo traffic, in terms of RTK, grew at an average rate of 3.4% per annum during the 20-
year period from 1999 to 2018. Compared to the passenger business, the cargo business is more
susceptible to economic changes, and in the last ten years, due in part to the effects of the U.S. financial
crisis and credit concerns in Europe, its average growth rate was 4.5% per annum, recovering to almost
the same level as the ten-year period between 1999 and 2008, which saw an average annual growth
rate of 2.3%.
In the early economic recovery phase, the degree to which air transport has been used from the
inventory cycle has increased, and RTK recovered from the downturn that had continued from 2008
to 2017. The global economy in 2017 was significantly improved by being driven by major advanced
economies, though there were many political events and geopolitical risks such as elections in major
Western countries including the US. In 2018, the global economy was on a downward trend due to
effects such as the US-China trade war and preparation for dealing with Brexit, and even in 2019, it is
expected to be on a similar trend, though there are some bright topics such as effectuation of mega
trade agreements including the TPP11 and the EPA.
According to IHS (Global Insight), the global real GDP growth rate was 3.3% in 2017 or 3.2% in 2018,
and it will be 2.9% in 2019.
Worldwide Market Forecast 2019-2038
52
Meanwhile, the global air cargo traffic growth rate in 2018 published by the IATA (International Air
Transport Association) dropped to 4.1% year-on-year in terms of RTK, compared to 9.7% in 2017;
however, the average growth rate of air cargo traffic over the last 5 years from 2014 to 2018 published
by the IATA continued at a slightly lower rate than 4.7%.
Worldwide Market Forecast 2019-2038
53
For air cargo traffic growth rate by region, though South American airlines slightly increased year-on
year (5.8%), African airlines decreased year-on-year (-1.3%), and other regions, that is, North
American airlines (6.8%), Middle East airlines (3.9%), European airlines (3.2%) and Asian-Pacific
airlines (1.7%) remained stagnant year-on-year.
Recently, there have been active movements, such as the manufacture of value-added products in
emerging countries, and companies from emerging countries expanding their business to other
emerging countries, which differ from conventional methods such as shifting manufacturing bases for
low-value-added products from developed countries to emerging countries. In recent years, in many
cases, air cargo products have been shifting from end products such as mobile phones and audio-video
equipment to electronic components, lenses, etc., because final assembly has been carried out in low-
labor-cost countries or in places close to consumer regions. In addition, with advances in packaging
technology, cargo volume has become smaller than before. Since air cargo goods have become smaller
and lighter, air cargo capacity as a whole is overcapacity.
Airlines face circumstances including declining cargo yields and worsening profit due to soaring fuel
costs. They also see an increasing number of passenger jets, which have a large-volume lower hold
that can accommodate a relatively large amount of cargo, such as the A330 and the 777-300ER. To
increase revenues other than those from passenger transport, airlines have been reducing freighter
transportation and increasingly using such lower holds in their passenger jets. LCCs have also been
entering the cargo business as a source of revenue other than their passenger business.
Although the global economy has continued upturn for a while, there remains uncertainty in the
economies of emerging countries, the US/Europe and China, and there are also downturn risks caused
by conflicts and terrorist attacks in the Middle East and Europe. In the long run, however, with the
continuing globalization of companies, inventory reductions, and economic growth in emerging
countries, and consequently the expansion of the middle class with increased purchasing power, it
seems that the movement of people and goods will become more active, and air cargo demand will
increase further.
Cargo load factor
The system cargo load factor, when seen from the combination of transportation by freighters and
transportation by lower holds in passenger airplanes rose from 47.7% in 1998 to 48.9% in 2018,
meaning it slightly increased, even though it was affected by demand fluctuation.
The freighter load factor slightly increased from 62.3% in 1998 to 67.7% in 2018, which showed
strong cargo traffic. The freighter load factor had already reached a high level.
During the same period, the lower hold cargo load factor slightly increased from 37.9% to 39.2%,
which likewise showed strong cargo transportation.
It seems that because of things like the entry of LCCs into the cargo business, smaller and lighter cargo
Worldwide Market Forecast 2019-2038
54
goods, and the advent of wide body passenger airplanes that can carry a large amount of payload,
cargo traffic in the lower holds of passenger airplanes will increase, and the load factor will rise further
in the future.
Cargo yield
The real global cargo yield, an indicator of cargo revenue, decreased by an annual average of 4.5% in
the decade from 1989 to 1998, and it decreased by an annual average of 2.2% in the 20- year period
from 1999 to 2018.
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55
In the 1980s, the real cargo yield showed a significant decline due in part to the introduction of large
freighters such as the 747F to the market. Yet, since 1990, with the expansion of international trade
due to the globalization of the world economy, demand for air cargo transport has grown, and the yield
has not much decreased. However, from now on, while there is a requirement for reducing cargo
charges due to competition from other modes of transportation and reduced logistics costs by
companies, it is conceivable that the yield is likely to modestly decrease due in part to a shortage of
supply generated by increased demand for air cargo created by e-commerce and other businesses, and
also to a shortage of pilots and some other reasons.
7.2 Air Cargo Traffic Forecast
Global air cargo traffic, in terms of RTK, will grow at an average rate of 3.9% per annum from 2019
to 2038, increasing 2.1 times, from 255.3 billion ton kilometers in 2018 to 546.5 billion ton
kilometers in 2038. The real cargo yield during this period is estimated to decrease at an average rate
of 0.3% per annum.
Routes between the Asia-Pacific region and North America will be the largest market, and the
average annual growth rate is expected to be 4.0%. The routes of 50.1 billion ton kilometers in 2018
will grow to 109.2 billion ton kilometers in 2038. The growth rate may be higher than the global
average (3.9%), so the share will be 20.0%. These routes are expected to be the largest market over
the next 20 years.
Intra-Asia-Pacific routes will grow at an average annual rate of 4.7%, increasing from 38.7 billion ton
kilometers in 2018 to 97.7 billion ton kilometers in 2038, and their share will be 17.7%. In Asia, the
Worldwide Market Forecast 2019-2038
56
capacity of truck shipping and other forms of land transportation will increase significantly along with
progress in the development of the land transport infrastructure. However, air shipping will also
increase significantly at the same time.
Asia-Pacific to Europe routes will show an average annual growth rate of 3.9%, growing from 45.2
billion ton kilometers in 2018 to 96.2 billion ton kilometers in 2038, and the share will be 17.6%.
Routes between the Asia-Pacific region and the Middle East will show an average annual growth rate
of 6.7%, growing from 13.4 billion ton kilometers in 2018 to 48.5 billion ton kilometers in 2038, and
the share will be 8.9%.
Routes between Europe and the Middle East will show a growth rate of 3.3%, growing from 12.3
billion ton kilometers in 2018 to 23.4 billion ton kilometers in 2038, and the share will be 4.3%. These
routes will also absorb the routes to Africa and Latin America through the Middle East.
Looking at growth rates, routes between the Asia-Pacific region and the Middle East will grow at
6.7%, routes between Africa and the Middle East at 6.3%, and intra-Middle East routes at 5.7%. This
suggests that more cargo will be shipped east to west or south to north via the Middle East. In general, rapid growth is expected for routes within emerging countries such as in the Middle East
and the Asia-Pacific region, and inter-regional routes. Especially, routes connecting the Middle East
and the Asia-Pacific region will take the lead in growth.
Routes between Europe and North America and routes within North America, which are mature
markets, will grow at low growth rate of approx. 2%.
Regionally, airlines in the Asia-Pacific region will have the largest amount of air cargo traffic, and
reflecting the geographical spread and high economic growth rate, the 89.1 billion ton kilometers total
Worldwide Market Forecast 2019-2038
57
in 2018 will grow by a factor of 2.5 to reach 218.6 billion ton kilometers in 2038. Airlines in North
America will grow from 61.4 billion ton kilometers to 130.5 billion ton kilometers. Airlines in the
Middle East will exploit their geographic superiority to multiply 2.6 times, from 34.5 billion ton
kilometers to 89.1 billion ton kilometers, surpassing those in Europe to take third place. Airlines in
Europe will grow from 50.3 billion ton kilometers to 72.5 billion ton kilometers, coming short of those
in the Middle East, which will show major growth.
Worldwide Market Forecast 2019-2038
58
The growth rate of airlines in North America will be 3.8%, which is equal to the global average (3.9%),
and their share will be 24%, which has been unchanged. On the other hand, airlines in Europe, which
already have a mature market, will grow at a low rate of 1.8%, and their share will drop from 20.0%
to 14.0%. The Asia-Pacific region, the world's largest market, will grow at a rate of 4.6%, and its share
will expand from 35.0% to 39.0%.
The Middle East has a geographical advantage, and will see the highest growth of 4.9%. Africa and
the CIS, despite suffering recently from economic uncertainty, will see growth rates of 4.1% and 3.4%,
respectively, over the long term with their high economic growth trajectories.
As with passenger traffic, air cargo growth will be driven by emerging countries in the Asia-Pacific
region, the Middle East and Africa.
World Air Cargo Traffic Share by Region (RTK Base)
The scale will increase by 2.1 times
Worldwide Market Forecast 2019-2038
59
8. Jet Freighter Demand
8.1 Fleet Analysis
In-service fleet
The in-service jet freighter fleet gradually decreased from 1,933 in 2008 to 1673 in 2013 globally;
however, after then, the number continued to increase to 1,966 in 2018, of which 720 were narrow
body airplanes, 651 were medium wide body airplanes, and 595 were large airplanes.
In regards to their shares from 2008 to 2013, the share of narrow body airplanes was in a downward
trend while that of large airplanes was in an upward trend, and since then, the shares of narrow body
and medium wide body airplanes have recovered.
Planes converted to freighters
In the jet freighter market, many freighters converted from passenger airplanes have been used, and
about 54% of the in-service freighters used were converted freighters in 2018. Passenger airplanes
start to be converted to freighters once they pass 10 years of age, and conversions reach a peak once
the planes are about 15 to 20 years old.
Worldwide Market Forecast 2019-2038
60
As long as there is no major change in the environment, conversion freighters will be used for about
15 years after conversion before they are retired.
Worldwide Market Forecast 2019-2038
61
Looking at the delivery history of production freighters and converted freighters since 1998, excluding
757 freighters manufactured in the 1990s, no new freighters were manufactured in the West. For that
reason, this market is a converted aircraft market, with a relatively stable demand for converted aircraft.
737-300/400s and 757s have especially been converted in large numbers.
Recently, regional jets such as CRJ200 and ERJ 145 converted into freighters, have come into being. In regards to wide-body jets, in the 1990s A300/A310s and DC-10s, and in the 2000s 747s, 767s, and
MD-11s, were converted into freighters for the converted market. Since 2008, however, given a
downturn in the air cargo market and skyrocketing fuel prices, 3- and 4-engine aircraft have been
shunned for their poor fuel economy, and demand for these aircraft to be converted has fallen
dramatically. In addition, an increasing number of production freighters have also been delivered due
to the fact that there is a shortage of aircraft suitable for conversion, as well as the facts that a
conversion program for the A330 has been just launched and freighter-converted A330s only started
coming into service in 2018, while a conversion program for the 777 has not yet been launched.
Worldwide Market Forecast 2019-2038
62
Trend of payload
In the past ten years, many 707F, 727F, 737-200F, 747-100F/200F/300F, DC-8F, and DC-9F have been
retired, and many A300-600, MD-11, 747-400, 757, and 767-300ER passenger jets have been
converted and introduced to the freighter market. Additionally, new A330-200F, 777F, and 747-8F
freighters have also been introduced.
Further, in the past 5 years, partly because the shares of narrow body and medium wide body airplanes
have increased, the average payload per jet freighter decreased since 2017, and it was 59.7 tons in
2018, which was the first time it fell below 60 tons since 2010.
Jet freighter retirements
A jet freighters' service life is longer than 30 years, which is quite long, because many jet freighters
are converted from passenger airplanes, and each freighter flies for a lesser number of hours each year
than a passenger airplane.
Since 2010, partly because fuel prices have been soaring and cost-cutting has been taking place, the
retirement of aging, fuel-inefficient airplanes (especially those 35-years old or older) with high
maintenance costs has accelerated. Meanwhile, some relatively younger jet freighters whose service
life is between 16 and 30 years have recently been retired partly because of the emergence of jet
freighters with high fuel efficiency.
Worldwide Market Forecast 2019-2038
63
In 2008, 88 jet freighters were retired after an average service life of 37.4 years. The number of jet
freighters retired in 2013 was greater at 95, resulting in a shorter average service life at 34.5 years.
This was followed by slight fluctuations, and in 2017, 65 jet freighters were retired, resulting in an
average service life of 33.5 years. The average service life became younger after hitting a peak around
2010, although it has been fluctuating somewhat.
Worldwide Market Forecast 2019-2038
64
8.2 Jet Freighter Demand
Over the period between 1998 and 2018, freighter cargo traffic in terms of RTK increased at an average
rate of 3.9% per annum, while dropping from 52% of the total cargo traffic in 1998 to 47% in 2018.
Following increasing demand for e-commerce, etc., by companies dedicated to cargo shipping services,
such as FedEx and DHL, the freighter RTK from 2019 to 2038 will increase at average rate of 4.3%
per annum, and is expected to increase from 125.2 billion ton kilometers in 2018 to 291 billion ton
kilometers in 2038, which is about 2.3 times larger than in 2018.
In addition, when 2006 and 2017 are compared, major airlines with large cargo traffic have different
strategies, and the RTK of major airlines excluding Emirates, Qatar, and Cathay -- that is, that of
Singapore, Lufthansa, and Korean Air -- has been decreasing.
During this period, the overall RTK of lower hold cargo for major airlines with large cargo traffic
either remained flat or increased slightly while the RTK of freighters decreased. This indicates that air
cargo transportation has been shifting from transportation by freighters to the lower holds in passenger
airplanes. While Emirates and Qatar Airways are deploying more freighters, they are also greatly
increasing their cargo traffic through the deployment of wide body airplanes with large lower-hold
cargo, such that capacity has increased 2 to 3 times in the past 10 years.
In the future, due to the increasing number of passenger wide-body airplanes, such as the A330 or the
777-300ER, with lower-hold cargo areas that have sufficient space, and expanded use of the lower-
hold cargo of passenger airplanes by airlines trying to secure revenue not related to passenger revenues,
cargo traffic carried in the lower-hold cargo of passenger airplanes will increase. On the other hand,
companies dedicated to cargo shipping services, such as FedEx and DHL, have been increasing their
Worldwide Market Forecast 2019-2038
65
capacity of freight transport (ATK) in response to the increase of global demand for e-commerce and
healthcare-related products. It is therefore conceivable that the share of freighter transport will increase
gradually.
The world jet freighter fleet will increase from 1,966 in 2018 to 3,010 in 2038. It is expected that of
these, demand for replacements will comprise 1,519 units with a share of 59%, and demand for new
freighters will comprise 1,044 units with a share of 41%.
In regards to the number of in-service jet freighters by size and share, although in 2018, narrow body
Worldwide Market Forecast 2019-2038
66
airplanes were the greatest in number, being 720 units with a share of 37%, they are expected to
increase to 1114 units in 2038 with their share unchanged at 37%. In comparison, large freighters
will increase in number from 595 units to 1,077 units, and their share from 30% to 36%,
respectively, during the same period. Meanwhile, 1,519 freighters will retire, and only 447 units out
of the freighters in service in 2018 will still be in service in 2038. In the next 20 years, 2,563
freighters will be delivered.
Deliveries of jet freighters by size will be 1,112 narrow bodies, 653 medium-wide bodies and 798
large freighters, totaling 2,563 units. Their shares will be 43%, 25%, and 32% respectively. Of these,
1039 deliveries will be production aircraft. The breakdown of production aircraft will be 462 medium-
wide bodies and 577 large aircraft, which will comprise the majority with a share of 56%.
As there are no suitable production narrow body freighters, the majority of new demand will be
conversions from A320/321, MD80, 737, and 757 passenger jets. Even freighters converted from
regional jets such as the CRJ100/200 and the ERJ145 have appeared.
Wide body jets, mainly the A330 and the 777, can be expected to be converted to freighters. The A330-
200F, 777F and 747-8F are production freighters. In the future, freighters converted from the A350
and 787 will also probably appear.
Worldwide Market Forecast 2019-2038
67
Regionally, over the period from 2018 to 2038, the number of units in service in North America will
increase from 908 units to 936 units; the Asia-Pacific region from 354 units to 843 units; Europe from
301 units to 448 units; the Middle East from 86 units to 252 units; Latin America from 96 units to 185
units; Africa from 70 units to 104 units; and the CIS from 151 units to 242 units. As a market for
freighters, North America will remain the largest throughout this period. Emerging countries in the
Middle East and Latin America will have more units in service, and especially those in the Asia-Pacific
region will be second to the amount in North America in 2038.
The number of new deliveries (production freighters and converted freighters) will be the greatest in
North America with 757 units, followed by the Asia-Pacific region with 744 units, Europe with 382
units, the CIS with 210 units, the Middle East with 199 units, Latin America with 176 units, and Africa
with 95 units. In Europe, Africa, Latin America, and the CIS, these will mainly be converted freighters,
but in North America, the Asia-Pacific region, and the Middle East, the ratio of new freighters will
also be relatively high.
Demand for production jet freighters in North America will be 448 units, followed by the Asia-Pacific
region with 264 units, the Middle East with 148 units, Europe with 75 units, and the CIS with 47 units.
The North America and the Asia-Pacific region have the largest new freighter markets.
Worldwide Market Forecast 2019-2038
68
Ramp cargo door type freighters, which are principally a commercial version of the old Soviet-era
military freighters such as the An-124 and Il-76TD, are operating in the HOM (Heavy and Oversize
air cargo Market) to transport heavy and oversize cargo. The market share of HOM is very small in
terms of RTK, at only about 0.5% of total air cargo traffic, but that market is expected to grow faster
than average for global air cargo traffic due to growing demand in aerospace, machines and the mining
industry, as well as humanitarian operations and disaster relief. As no replacements for current
freighters such as the An-124, An-225, Il-76TD and Il-90VD exist at the moment, these airplanes
should be continuously operating over the forecast period. Recently, a commercial version of the
military freighters in operation is under consideration in Western countries.
Worldwide Market Forecast 2019-2038
69
9. Airplane Sales
9.1 Jet Airplane Sales During the period from 2019 to 2038, the number of deliveries of production airplanes comprising
passenger jets and jet freighters will be 36,351 units, worth 5.89 trillion U.S. dollars in sales (at 2018
list prices).
By region, the world’s greatest amount
is in the Asia/Pacific region, where the
total number of jet airplanes delivered
will be 14,648, with a value of 2.52
trillion U.S. dollars and a share of
sales at 43%.
This is followed by Europe and North
America, with 1.22 trillion U.S.
dollars (share of sales: approx. 21%)
and 0.99 trillion U.S. dollars (17%),
respectively. Sales in the Middle East
will be as large as 0.57 trillion U.S.
dollars compared to the demand at
2,304 units, partly because of the high
demand for wide body jets, with a share of sales at 9.7%.
7,305 7,700
14,648
2,304 2,199
1,030 1,165
990 1,217
2,522
569
274 153 161
0
1,000
2,000
3,000
0
5,000
10,000
15,000
North America Europe Asia-Pacific Middle East Latin America Africa CIS
No. of Airplanes
North America Europe Asia-Pacific Middle East Latin America Africa CIS
36,351 Airplanes5,885 US$ billion
Total
2018 PriceUS$ billion
*Total of passenger jets and jet freighters
Jet Airplane Sales Forecast by Region
North America
17%
Europe21%Asia/
Pacific43%
Middle East10%
Latin America
4%
Africa2%
CIS3%
Share of Jet Airplane Sales
5885 US$ billion
Worldwide Market Forecast 2018-2037
70
Among the above, new deliveries of passenger
jets will be 35,312 units, worth 5.53 trillion U.S.
dollars in sales. Of these, 3,111 units will be
regional jets, worth a total of 115.1 billion U.S.
dollars and a 2.1% share of sales. New deliveries
of narrow body airplanes will be 22,508 units,
worth 2.58 trillion U.S. dollars and a 47% share
of sales. New deliveries of wide body airplanes
will be 9,693 units, worth 2.84 trillion U.S.
dollars and a 51% share of sales.
Sales will be highest for airplanes with 310 to
399 seats, constituting 12% of all airplanes
delivered and generating the largest sales of 1.54
trillion U.S. dollars with a sales share of 28%
(4,129 units, 12%), followed by airplanes with
120 to 169 seats with 1.38 trillion U.S. dollars and a sales share of 25% (12,576 units, 36%).
In addition, new deliveries of jet freighters will be 1,039 units, worth 354.3 billion U.S. dollars in
sales. Large airplanes, which have the greatest demand, will generate 237 billion U.S. dollars in sales.
Medium-wide bodies will generate 117.3 billion U.S. dollars in sales.
119
2,992
1,748
12,576
8,184
5,534
4,129
30 0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
20-59 60-99 100-119 120-169 170-229 230-309 310-399 400 over
Passenger Jet Sales Forecast No. of Airplanes2018 PriceUS$ billion
0
1,000
200
400
600
111 122
1,375
1,079
1,288 1,540
13
SIZE (SEATS)
Narrow body Wide body
800
3
1,200Total
35,312 Units5,531 US$ billion
Regional Jet
1,400
1,600
20-590%
60-992%
100-1192%
120-16925%
170-22920%
230-30923%
310-39928%
400 over0%
Share of Passenger Jet Sales
5,531
NarrowbodyWidebody
US$ billion
(SEATS)
51% 47%
Worldwide Market Forecast 2019-2038
71
9.2 Passenger Turboprop Airplane Sales In the passenger turboprop airplane sales forecast from 2019 to 2038, the total number of units sold
will be 3,130, and the sales value (at 2018 list prices) will be 68 billion dollars U.S. dollars. The
number of these units accounts for 8.8%, with the amount of units sold no more than 1.2% of that of
the jet market. The sales value of passenger turboprops with 60 to 79 seats will be 27.7 billion U.S.
dollars, accounting for about 41% of the amount of all turboprops sold.
Regionally, the Asia-Pacific region has the strongest demand with 1,302 units*, worth 30.1 billion
U.S. dollars, with a sales share at 44%. This is followed by North America, Europe, and Latin
America, with demand worth 7.4 billion, 10.6 billion and 7.7 billion U.S. dollars, respectively. (* Southeast Asia has the strongest demand, followed by South Asia and Oceania. See Page 48 as well).
346
1,131
149
1,066
438
0
500
1,000
1,500
2,000
15-19 20-39 40-59 60-79 80-99
Total3,130 Units
68 US$ billion
SIZE (SEATS)
Passenger Turboprop Airplane Sales ForecastNo. of Airplanes
2018 PriceUS$ billion
3
20
3
28
0
10
20
30
14
40
374 451
1,302
32
412 377
182
7
11
30
0.8
8 7
4
0
5
10
15
20
25
30
35
40
0
200
400
600
800
1000
1200
1400
1600
North America Europe Asia-Pacific Middle East Latin America Africa CIS
Passenger Turboprop Sales Forecast by RegionNo. of Airplane
North America Europe Asia-Pacific Middle East Latin America Africa CIS
3,130 Airplanes68 US$ billion
Total
2018 PriceUS$ billion
Worldwide Market Forecast 2019-2038
72
9.3 Airplane Sales (total) The total number of global deliveries of passenger jets, passenger turboprop airplanes, and jet freighters (production airplanes) for the next 20 years, from 2019 to 2038, will be 39,481, and the total sales (at 2018 list prices) will be 5.95 trillion U.S. dollars.
Regionally, total sales in the Asia-Pacific region, which will have the highest deliveries with 15,950
airplanes, will be 2.55 trillion U.S. dollars, and the region will be the world's largest market with
sales value accounting for about 43% of the world's total sales.
This will be followed by 1.23 trillion U.S. dollars in Europe and 1.00 trillion U.S. dollars in North
America, with these regions together accounting for about 37% of total global sales. Although the
Middle East has almost no demand for passenger turboprop airplanes, the total sales will be 569.9
billion U.S. dollars, accounting for 9.6% of the market, because of the strong demand for passenger
jets, especially wide body jets.
7,679 8,151
15,950
2,336 2,611 1,407 1,347
997 1,228
2,552
570
282 160 165
0
1,000
2,000
3,000
4,000
0
5,000
10,000
15,000
20,000
North America Europe Asia-Pacific Middle East Latin America Africa CIS
No. of Airplanes
North America Europe Asia-Pacific Middle East Latin America Africa CIS
39,481 Airplanes5,953 US$ billion
Total
2018 PriceUS$ Billion
*Total of passenger jets, passenger turboprops and jet freighters
Airplane Sales Forecast by Region
Market Share of Airplane Demand and Sales by Region 2019-2038
North America
19%
Europe
21%
Asia-Pacific
40%
Middle East6%
Latin America
7%
Africa
4%
CIS3%
New Deliveries Units
North America
17%
Europe
20%
Asia-Pacific
43%
Middle East9%
Latin America
5%
Africa
3%
CIS3%
Total Sales : US$ billion5,953.5 39,481
Worldwide Market Forecast 2019-2038
73
10. Regional Overview
For the past 20 years (from 1999 to 2018), global GDP has grown at an average rate of 2.8% per year,
passenger traffic at 5.3%, and cargo traffic at 3.4%. In the meantime, airline liberalization has
progressed across the world, many state-owned airlines have become privatized, and many LCCs have
entered the market. Airlines have been shifting their business strategy from forming individual
networks on their own, to forming their networks by putting together a group of airlines called
“alliances.” Previously, airlines from the U.S. and Western Europe drove the growth of the airline
industry. In recent years, however, airlines from the Asia-Pacific region and the Middle East have
grown and are now leading forces. In this way, airline business models and network strategies have
been changing with the times; airlines growing faster and their playing regions have also been replaced
by other airlines and regions.
In addition, requirements for airplanes vary depending on the region. Airlines in the Middle East,
because of their regional requirements, have been demanding wide body jets that can fly long distances,
while airlines in Europe have been using wide body jets with a range of 10,000 km or less. In North
America, narrow body jets are operated on all routes ranging from Regional Range to Trans-
continental haul. Many LCCs with remarkable expansion also use narrow body jets. Circumstances
characterizing airlines differ depending on business models and regions to which these airlines belong,
and their demand for airplanes also differs.
Passenger demand, cargo demand and airplane demand shown here by region are the sum of the
demand for passengers and cargo transported, as well as number of airplanes in service and airplanes
delivered to airlines belonging to the region. Every country is contained in its region geographically,
and every airline belongs to the region through its country where it has its head office and is registered
as a corporation.
(In the following description, “Regional Range” means less than 1,000 km, “Short Range” means
1,000 to less than 2,000 km, “Medium Range” means 2,000 to less than 4,500 km, and “Long Range”
means 4,500 km or longer).
North America
Latin America Africa
Middle East
CIS
Asia-Pacific
Europe
Worldwide Market Forecast 2019-2038
74
10.1 North America
The U.S. economy is surrounded by a mixture of expectation and confusion concerning new economic
policies, trade and tariff/customs policies, immigration control, etc., as emphasized for job security
under the administration of President Trump. Combined with the political trends in Europe, the open
globalism adopted by the U.S. may change and affect movement of passengers and cargo. In autumn
2017, the U.S. Department of Commerce made a preliminary decision to impose a 292% tariff on
Bombardier (a Canadian aircraft manufacturer) C series passenger aircraft to be imported to the U.S.
While this decision was rejected by the U.S. International Trade Commission in January, 2018, this
fuss at once led to realization of a partnership between Bombardier and Airbus, and C Series aircraft
are going to be produced at an Airbus factory in the U.S. Such an outcome is “an unexpected turn of
events,” which may change the balance of sales force in a long-term and strategic fashion.
Airlines in North America were greatly damaged by the 9/11 terrorist attacks in 2001. Since then, they
have proceeded with the streamlining of their organizations, mergers with other companies, and other
initiatives. As a result, major airlines in the U.S. have been nearly consolidated into three companies:
American Airlines, Delta Air Lines, and United Airlines; and regional airlines also into three
companies: SkyWest Airlines, Republic Airlines, and Trans States Airlines. Currently, four companies
(American Airlines, Delta Air Lines, United Airlines, and Southwest Airlines) account for nearly 70%
of the U.S. domestic market on an RPK basis, and these airlines are becoming increasingly dominant.
Now, airlines in North America are the most profitable in the world, resulting from the improved
financial situation due to restructuring and precise demand/supply adjustments. In 2018, airlines in
North America, responding to soaring fuel prices, reduced personnel costs in an emergency manner
8,262
1,091
0
7,171
0
817
0
2,000
4,000
6,000
8,000
10,000
2018 2038
No.
of A
irpla
nes
Fleet Developments of North America Airlines
Replacement
Growth
Retained
New Deliveries
df
7,988
9,079
90%
10%
Worldwide Market Forecast 2019-2038
75
from around 2004 to around 2006, and since
2015, after nearly 10 years had passed, their
distribution to personnel costs was recovered
to a previous level in the wake of decreased
fuel prices after 2015. Nevertheless, in 2018,
their personnel costs accounted for
approximately 45% (approximately 22% in
terms of RPK) of net profits earned by airlines
worldwide.
In recent years, replacement of aircrafts has
been progressing partly as a result of
responding to declining funding costs
following the zero interest policy and the
quantitative easing policy, and to soaring fuel
costs continuing for a long time. Aircraft have
gradually been being replaced by those with
more seats not only because of economic
efficiency but also because major airports have
been approaching their slot limits. Main
regional jets with 50 seats have been being
replaced by those with 76 seats due in part to
easing of the Scope Clause. Similarly, there
has also been increasing demand for narrow
body jets in the 170-229 seat class, such as the
A321 and the 737-900ER, slightly larger than those in the 120-169 seat class, such as the A319/320
and the 737-700/800, which are still main ones. In addition, some quarters hope for replacement
aircraft for the 757, which may reach the limit of seating capacity as a narrow body airplane.
Since there is also fierce competition from LCCs over domestic routes, major airlines in North
America have tried hard to further expand their business in international routes. Then there has been
increasing demand for wide body jets such as the A350 and the 777/787.
In North America, over the past 20-year period from 1999 to 2018, GDP grew at an average annual
rate of 2.2%, passenger demand at 2.8%, and cargo demand at 2.1%. As for the growth rate forecast
from 2019 to 2038, GDP will grow at 1.9%, passenger demand at 3.1% and cargo demand at 3.8%.
The average growth rate of the transport demand in the mature North American market is considered
to be slightly lower than the global average. In addition, 90% of the airplanes to be delivered in the
forecast period will be replacements for the existing airplanes.
The number of airplanes in service in the North American market will increase from 8,262 in 2018 to
Growth Measures (2019-2038) North AmericaGDP 1.9 %
RPK 3.1 %
RTK 3.8 %
Fleet 0.5 %
Sales (2018 List Price) 997 US$ billion
New Deliveries2018 2038 2019-2038
Passenger Turboprop 15-39 seats 439 246 235 40-59 seats 106 23 20 More than 60 seats 169 200 119 Total 714 469 374
Passenger Jet 20-59 seats 745 0 0 60-99 seats 1,196 1,553 1,392 Regional Jet 1,941 1,553 1,392 100-119 seats 150 612 602 120-169 seats 2,833 2,626 2,308 170-229 seats 1,048 1,543 1,361 Narrowbody 4,031 4,781 4,271 230-309 seats 397 925 833 310-399 seats 267 415 361 More than 400 seats 4 0 0 Widebody 668 1,340 1,194 Total 6,640 7,674 6,857
Jet Freighter (New+Converted) Narrow Body 267 197 195 Medium Widebody 380 408 303 Large 261 331 259 Total 908 936 757
Total Fleet 8,262 9,079 7,988
Fleet
Worldwide Market Forecast 2019-2038
76
9,079 in 2038. Over this period, the demand and the sales value (at 2018 list prices) are expected to
be 7,988 units and 1.00 trillion U.S. dollars, respectively. Narrow body aircraft will account for 53%
of all deliveries and airplanes with 100 or fewer seats, including turboprop airplanes, will account for
22%.
RPK in North America in 2018 was 1,856×109 passenger kilometers, of which the Long Range (4,500
km or longer), Medium Range (2,000 to 4,500 km), and Short Range (1,000 to 2,000 km) markets
appear to account for 27%, 35% and 26%, respectively.
In addition, average growth rates in the aforementioned ranges from the next 20 years, in terms of
RPK, are expected to be 3.3%, 3.6% and 3.2%, respectively, and as of 2038, Medium Range routes in
North America is expected to continue to attract the largest transport demand.
However, although 4,500 km is almost the same as the North American transcontinental haul, regional
jets and narrow body airplanes are mostly used up to this haul in the North American market, and the
number of wide body airplanes used is quite small. The largest number of regional jets are used in a
Regional Range mostly around a route haul of 600 km, and while the number is gradually decreasing
corresponding to longer haul, they are used up to a Short Range (2,000 km or less). Passenger
turboprops are used in a Regional Range, and small airplanes with less than 40 seats are mainly used
in a Regional Range of 600 km or less, mostly around a route haul of 200 to 300 km. Although medium
and large airplanes with 40 seats or more are used in a wide range of Regional Range up to 1,000 km,
mainly they are used for around 300 km.
LR 3.3%MR 3.6%SR 3.2%RR 1.0%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
13% 9%
26%26%
35% 38%
27% 28%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -North America
LR
MR
SR
RR
Worldwide Market Forecast 2019-2038
77
10.2 Europe It is difficult to be optimistic about the future of Europe’s politics and economy, due to movement to
the Brexit, changes and confusion in economic relationships expected to take place as a result of the
decision, anti-EU trend concerning problems such as terrorism and immigrants/refugees, and
government debt problems of some countries, although they are not high-profile; however, Europe is
one of the three major markets including North America and China, which shore up global demand
for air transport.
Europe, where most countries in Western Europe, Eastern Europe and Northern Europe are EU
members, is a single aviation market with a continental scale, in which the member states are opened
to one another even for respective domestic operations under aviation agreements. Over the past 20
years, passenger demand basically showed a steady growth. Major airlines in Western Europe have
already been consolidated almost into three groups: Air France-KLM, IAG (BA, among others), and
Lufthansa. In addition, since 2010, LCCs have contributed to this growth. Europe’s LCCs have rapidly
developed after the 1997 liberalization and have now come to account for about 38% of the available
seat capacity in Europe.
In Europe, as high-speed rail networks have improved, the existing full-service airlines are exposed to
severe competition with LCCs and/or high-speed rail over domestic and intra-regional routes. Recently,
there has also been competition between LCCs and high-speed rail. LCCs are also reported to be
struggling on some routes. Under these circumstances, major airlines have been trying to find their
way into inter-regional routes. Yet, the tough competition has continued, since airlines in the Middle
East also have been advancing into European routes recently.
5,835
1,171
0
4,664
0
3,794
0
2,000
4,000
6,000
8,000
10,000
2018 2038
No.
of A
irpla
nes
Fleet Developments of European Airlines
Replacement
Growth
Retained
NewDeliveries
55%
9,629
8,458
45%
42%
Worldwide Market Forecast 2019-2038
78
As in the U.S., the replacement of airplanes has
been progressing in Europe. Because fuel
prices soared at one time and slot limits at
major airports will soon be reached, there has
been increasing demand for slightly larger
airplanes in the 170-229 seat class, such as the
A321 and the 737MAX-10. The number of
seats on the A320 and 737-800 has also
increased from about 150 to about 180 with
higher density, and recently there is not much
difference between major airlines and LCCs.
In Europe, over the past 20 years from 1999 to
2018, GDP grew at an average annual rate of
1.8%, passenger traffic demand at 4.3%, and
cargo at 2.1%. As for the growth rate forecast
from 2019 to 2038, GDP will grow at an
average annual rate of 1.6%, passenger traffic
demand at 4.3% and cargo demand at 1.8%.
Although growth in demand for air transport in
Europe is slightly lower than the global
average since Western Europe, like the U.S., is
a mature market, the growth rate in Europe as
a whole is expected to be nearly the same as
the global average since the growth rate of
passengers in Eastern Europe in particular is high.
The total number of airplanes in service will increase from 5,835 in 2018 to 9,629 in 2038. Over this
period, the demand and the sales value (at 2018 list prices) are expected to be 8,458 units and 1.23
trillion U.S. dollars, respectively. Of the units to be delivered, 55% will be replacements for existing
airplanes. Narrow body airplanes will constitute 60% of units delivered.
RPK in Europe (Western Europe and Eastern Europe) in 2018 was 1,974×109 passenger kilometers,
of which the Long Range (4,500 km or longer) market accounts for the largest share of 42%; yet,
average growth rates in the next 20 years are expected to be 5.6% and 5.5% in the Medium Range and
Short Range markets respectively compared with 3.3% in the Long Range market, and in 2038, in
terms of RPK, while the Long Range market will increase to 34%, the Short Range and Medium Range
markets are expected to increase to 30% and 26%, respectively.
Airplanes used in the Western European region are wide body airplanes which are used in a Long
Range, and narrow body airplanes which are mainly used in a Medium Range and shorter-haul range.
Growth Measures (2019-2038) EuropeGDP 1.6 %
RPK 4.3 %
RTK 1.8 %
Fleet 2.5 %
Sales (2018 List Price) 1228 US$ billion
New Deliveries2018 2038 2019-2038
Passenger Turboprop 15-39 seats 194 164 155 40-59 seats 69 18 14 More than 60 seats 322 405 282 Total 585 587 451
Passenger Jet 20-59 seats 66 28 28 60-99 seats 385 517 447 Regional Jet 451 545 475 100-119 seats 138 461 430 120-169 seats 2,902 3,367 2,756 170-229 seats 511 1,899 1,863 Narrowbody 3,551 5,727 5,049 230-309 seats 330 1,357 1,247 310-399 seats 486 938 851 More than 400 seats 131 27 3 Widebody 947 2,322 2,101 Total 4,949 8,594 7,625
Jet Freighter (New+Converted) Narrow Body 142 228 228 Medium Widebody 78 118 97 Large 81 102 57 Total 301 448 382
Total Fleet 5,835 9,629 8,458
Fleet
Worldwide Market Forecast 2019-2038
79
The largest number of narrow airplanes are used in a route range of around 500 km, and the number
is gradually decreasing as theroute haul is increasing toward around 3,500 km. Although in the
Regional Range market, regional jets are also used mostly in a route range of around 600 km, the
number is fewer than in the North American region, and the number used is much fewer than in the
Short Range market. In a Regional Range, passenger turboprop airplanes are also used along with
regional jets, and they are mostly used in a route range of around 300 km, and operated in shorter haul
than regional jets are. Many medium and large passenger turboprop airplanes with 40 seats or more
are used.
The majority of airplanes used in the Eastern European region are narrow body airplanes. Particularly,
they are mainly used in a Short Range of 900 to 1,900 km*, and while the number is gradually
decreasing at a haul equal to or farther than that, they are used in a haul range of up to around 4,000
km. In a Regional Range, passenger turboprop airplanes with 40 seats or more are used in a haul range
of 300 to 700 km, mainly around 400 km. (* In Eastern Europe, Wizz Air, an LCC, is performing well).
The outcome of the Brexit Referendum of June, 2016 was received with a shock. If the Brexit is
actually carried out, the EU will impose tariffs on components such as wings of Airbus aircraft
manufactured in the UK, which will reduce the competitiveness of European companies themselves.
Some UK-flag airlines have been considering transferring to another country within the EU for fear
of effects by aviation agreements. However, election results in various countries in Europe after the
Brexit Referendum indicated that the British people’s complaint is no longer peculiar to other peoples
in Europe. Although Brexit will probably not to be decided even by the time this document is published,
the JADC, assuming that a soft landing will be made, does not specifically adjust sales capacity to be
set for Airbus aircraft for the next 20 years in this forecast.
LR 3.3%MR 5.5%SR 5.5%RR 2.4%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
14% 10%
24% 30%
20%26%
42% 34%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -Europe
LR
MR
SR
RR
Worldwide Market Forecast 2019-2038
80
10.3 Asia-Pacific The Asia-Pacific region is expected to see
strong economic growth in the coming
decades, given the expanding middle-class
income associated with the region’s large
population and an impressive economic
growth rate. Currently, China is exercising
strong economic traction globally with its
capacity based on both its population and
economic growth rate. It has also created
massive demand for air travel.
China’s demographic bonus ended by about
2015, and although its total population will begin to decline after passing its peak about 2030, and the
aging of Chinese society will progress rapidly, its economic growth is expected to continue through
this forecast period (2019 to 2038). Moreover, the Southeast Asia region, that is ASEAN (Association
of South-East Asian Nations) countries, which includes Thailand, Vietnam, and Indonesia, will have
economic growth and expanded demand for air travel, and the RPK growth of Southeast Asia and the
number of production passenger airplanes to be delivered thereto are expected to increase to about
twice those of South Asia (mainly India) during this forecast period.
Airline deregulation has been in progress in this region as well. LCCs have been established in Japan
and Taiwan, where no LCCs had existed before, and open skies in the ASEAN (full liberalization
Japan
Northeast Asia
SoutheastAsia
South Asia
Oceania
China
8,980
2,639
0
6,341
0
10,089
0
5,000
10,000
15,000
20,000
2018 2038
No.
of A
irpla
nes
Fleet Developments of Asia-Pacific Airlines
Replacement
Growth
Retained
NewDeliveries
%
16,430
19,069
39%
61%
Worldwide Market Forecast 2019-2038
81
within the region) began to emerge from 2016
in turn with the launch of the AEC (ASEAN
Economic Community).
While the Asia-Pacific region covers a
geographically large area, its ground
transportation networks have not yet been fully
improved, and therefore, air transportation is
more suitable for the region. However,
infrastructure improvement, such as airports
and air traffic control, has been left behind,
with certain exceptions, and is now
indispensable for further development.
In the Asia-Pacific region, over the past 20-year period from 1999 to 2018, GDP grew at an average annual rate of 5.2%, passenger demand at 7.4%, and cargo demand at 3.6%. In this period, the region shored up the growth of the world air transport. In the period from 2019 to
2038, this region is expected to continue
growing significantly; GDP will grow at an
average annual rate of 4.1%, passenger
demand at 5.3%, and cargo demand at 4.6%. It
is a growth market where 61% of airplanes to be delivered during the forecast period will be new
demand.
The number of airplanes in service in the Asia-Pacific region will increase from 8,980 in 2018 to
19,069 in 2038. Over this period, the new deliveries and the sales value (at 2018 list prices) are
expected to be 16,430 units and 2.55 trillion U.S. dollars, respectively. Massive domestic (Regional-
and Short Range) markets also exist in India and China, and there is great demand for aircraft from
LCCs, so narrow body airplanes will account for 65% of new deliveries.
Growth Measures (2019-2038) ASIA-PACIFICGDP 4.1 %
RPK 5.3 %
RTK 4.6 %
Fleet 3.8 %
Sales (2018 List Price) 2,552 US$ billion
New Deliveries2018 2038 2019-2038
Passenger Turboprop 15-39 seats 435 548 500 40-59 seats 156 104 62 More than 60 seats 489 997 740 Total 1,080 1,649 1,302
Passenger Jet 20-59 seats 11 3 3 60-99 seats 319 562 532 Regional Jet 330 565 535 100-119 seats 71 413 396 120-169 seats 4,637 6,351 4,971 170-229 seats 797 4,212 3,988 Narrowbody 5,505 10,976 9,355 230-309 seats 563 2,797 2,586 310-399 seats 1,036 2,194 1,897 More than 400 seats 112 45 11 Widebody 1,711 5,036 4,494 Total 7,546 16,577 14,384
Jet Freighter (New+Converted) Narrow Body 170 423 423 Medium Widebody 53 131 118 Large 131 289 203 Total 354 843 744
Total Fleet 8,980 19,069 16,430
Fleet
Worldwide Market Forecast 2019-2038
82
[China]
China is a continental market with a vast territory, and transport demand is mainly for Regional- and
Short Range domestic routes. China, along with Europe and North America, will be one of the three
major markets leading the global air passenger traffic demand in terms of RPK at the end of the
forecast period (2038). RPK in the Chinese region in 2018 was 1,251×109 passenger kilometers, of
which the Short Range (1,000 to 2,000 km) market is the largest accounting for 44%, and together
with the Regional Range market accounting for 59%. They are expected to grow at an annual average
rate of 5.7% or 6.0% in the next 20 years, and of these, the Short Range market is expected to account
for 47%, and together with the Regional Range market 62% as of 2038. Among current airplanes,
narrow body airplanes are used in a Medium Range or shorter range (4,500 km or less), especially
used mainly in a haul range from 400 to 2,200 km, and most airplanes used in this range are narrow
body airplanes. Wide body airplanes are used across the region from Long Range to Regional Range
(around 800 km), although they are fewer than narrow body airplanes. A small number of passenger
turboprop airplanes are used.
Demand for air transport in China is mainly for Regional Range routes and Short Range routes up to 2,000 km, of which 90% are for domestic routes (together with Medium Range routes, 80% is for domestic routes). The airplanes used in these routes are narrow body airplanes, and China’s domestic-made C919 aircraft is applicable for these ranges, in addition to the 737 and A320 families. Even if it is not feasible to export the C919 due to issues such as type approval, it is conceivable to nurture domestic production aircraft and the aviation industry even with only by the domestic market in view of approval by the Civil Aviation Administration of China and China’s vast territory, since there is sufficient demand for narrow body airplanes in domestic routes as just described. China, while currently using the 737 and A320, will adopt an import substitution policy in order to have superiority in the industry, and it is expected to shift to mainly procure domestic production aircraft while absorbing these foreign technologies. In that case, even though transport demand is large, China’s
LR 4.9%MR 5.7%SR 6.0%RR 5.7%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
15% 15%
44% 47%
17% 17%
24% 21%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -China
LR
MR
SR
RR
Worldwide Market Forecast 2019-2038
83
market size might rapidly shrink in the next 20 years from the viewpoint of the U.S./European manufacturers.
[Southeast Asia] RPK in Southeast Asia in 2018 was 634×109 passenger kilometers, of which the Long Range (4,500 km or longer) market is the largest accounting for 32%, followed by the Medium Range (2,000 to 4,500 km) market accounting for 30%. Average growth rates of various haul markets in the next 20 years are 6.6% in the Medium Range market and 7.7% to 7.8% in the Short- and Regional Range markets, and it is expected that the markets will account for 33%, 24% and 27% as of 2038 in that order. As a result of the growth of the Regional Range and Short Range markets, a haul range of 2,000 km or shorter will account for 52% in total, and a haul range of 4,500 km or shorter will account for 84% in total. Among current airplanes, many medium and large passenger turboprop airplanes with 40 seats or more are used in a Regional Range of 700 km or less, mostly around 300 km. Narrow body airplanes are mainly used in a haul range from 500 to 3,500 km, especially in a range up to 2,000 km, and mostly around 700 km. Although there are not many wide body airplanes, they are used in a range from Long Range to Short Range.
[South Asia] RPK in South Asia in 2018 was 258×109 passenger kilometers, of which the Short Range (1,000 to 2,000 km) market is the largest accounting for 35%, followed by the Medium Range (2,000 to 4,500 km) market accounting for 28%. Average growth rates of various haul markets in the next 20 years are expected to be 7.2% to 7.5% in the Medium Range and Short Range markets respectively, and 6.7% in the Regional Range market, of which as of 2038, the Medium Range and Short Range are expected to account for 32% and 42% respectively. Thus, routes in the Short Range together with those in the Regional Range will attract large demand. Among current airplanes, many passenger turboprop airplanes are used in a Regional Range. In a haul
LR 2.4%MR 6.6%SR 7.7%RR 7.8%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
20% 27%
18%
24%
30%
33%
32%16%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -Southeast Asia
LR
MR
SR
RR
Worldwide Market Forecast 2019-2038
84
range exceeding 500 km, especially up to 2000 km, many narrow body airplanes are used. While the number of aircraft gradually decreases until reaching up to 4,000 km after the flight distance exceeds 2,000 km., they are used as main airplanes. Wide body airplanes begin to be used in a haul range exceeding 2,000 km, but up to around 4,000 km, they are used along with narrow body airplanes, and beyond 4,000 km, only wide body airplanes are used. There are also some wide body airplanes which are used in a haul range of around 5,000 to 8,000 km.
[Northeast Asia]
RPK in Northeast Asia in 2018 was 239×109 passenger kilometers, of which the Long Range (4,500 km or longer) market is the largest accounting for 49%, followed by the Medium Range (2,000 to 4,500 km), Short Range (1,000 to 2,000 km) and Regional range (up to 1000km) markets accounting
LR 1.2%MR 7.2%SR 7.5%RR 6.7%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
19% 19%
35%42%
28%32%
18%7%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -South Asia
LR
MR
SR
RR
LR 2.0%MR 4.4%SR 5.5%RR 0.7%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
12% 8%
10% 16%
29%37%
49%39%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -Northeast Asia
LR
MR
SR
RR
Worldwide Market Forecast 2019-2038
85
for 29%, 10% and 12% respectively. Average growth rates of various haul markets in the next 20 years are expected to be 5.5% and 4.4% in the Short Range and Medium Range markets respectively, and with increases in Short and Medium Ranges, as of 2038, the Long Range and Medium Range markets are expected to account for 39% and 37% respectively. Among current airplanes, passenger turboprop airplanes are also used in a Regional Range up to 300 km, and in a range from 300 to 3,800 km, many narrow body airplanes are used. The use of wide body airplanes also starts in a range of 600 km or farther, and the number in use is almost the same as that of narrow body airplanes in use in the Ranges. In a haul range of 4,000 km or longer, only wide body airplanes are used.
[Japan] RPK in Japan in 2018 was 198×109 passenger kilometers, of which the Long Range (4,500 km or longer) market is the largest accounting for 38%, followed by the Regional Range (1,000 km or shorter), Short Range (1,000 to 2,000 km) and Medium Range (2,000 to 4,500 km) markets which account for 34%, 17% and 10% respectively. Regarding various haul markets in the next 20 years, average growth rates are expected to be 4.4% and 4.0% in the Medium Range and Short Range markets respectively. As of 2038, the markets are expected to account for 37%, 14%, 22% and 26% in order from the Long Range market, and the Short Range to Medium Range markets will grow more than currently. The only destinations which airplanes can reach from Japan on a Short Range up to 2,000 km are places such as Shanghai and Northern Taiwan. The only Southeast Asian countries, thought to be “close” to Japan that can be reached from Tokyo by medium-range airplanes (covering up to 4,500 km), are Thailand (Bangkok), the Philippines, Myanmar (Naypyidaw), etc., while Malaysia, Singapore and Indonesia are more than 4,500 km far away from Tokyo, and are covered by long-range airplanes.
Among current airplanes, narrow body airplanes are mainly used in a haul range from 500 to 2000 km, and many are used in a range of around 1,300 km. Wide body airplanes are used in ranges from Long
LR 2.7%MR 4.4%SR 4.0%RR 1.5%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
34% 26%
17%22%
10% 14%
38% 37%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -Japan
LR
MR
SR
RR
Worldwide Market Forecast 2019-2038
86
Range to Regional Range routes. Regional jets and passenger turboprop airplanes are used in a Regional Range; both are used in almost the same number in a range from 500 to 1,000 km; and the latter are used in a range of less than 500 km.
[Oceania] RPK in Southeast Asia in 2018 was 201×109 passenger kilometers, of which reflecting its geographical features, the Long Range (4,500 or longer) market is largest accounting for 45%. Average growth rates of various haul markets in the next 20 years are expected to be 4.4% and 4.5% in the Medium Range and Short Range markets respectively, and with increases in Short Range to Medium Ranges, as of 2038, the Long Range market (35% share) and the Medium Range market (34% share) are expected to expand. Among current airplanes, many small and medium or large passenger turboprop airplanes are used in a Regional Range of 800 km or less, mostly around 400 km. Narrow body airplanes are mainly used in a haul range from 700 to 4,500 km, especially in a range from 500 to 2,700 km. Although there are not many wide body airplanes, they are used in a range from Long Range to Short Range.
LR 1.7%MR 4.4%SR 4.5%RR 2.7%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
14% 13%
14% 18%
26%34%
45%35%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -Oceania
LR
MR
SR
RR
Worldwide Market Forecast 2019-2038
87
10.4 Middle East Countries in the Middle East are planning to develop new industries in preparation for the post-oil era, and are focusing on the development of airlines as part thereof. Airlines in the Middle East have taken advantage of the region’s geographical features to attract global Long Range air transport demand in the form of the sixth freedom of the air. Over the past 20 years, both passenger demand and cargo demand saw double-digit growth. In particular, Emirates Airlines, Etihad Airways, and Qatar Airways, which are called super connectors, have extended networks of routes from Dubai, Abu Dhabi, and Doha as their respective hubs throughout the world, and have attained a lot of transit demand. These airlines need large wide body airplanes with an excellent load capacity as well as a long flight range, and also their purchasing power allows them to exert huge influence on airplane manufacturers. Accordingly, development of the 777X started after the reception of purchasing orders from airlines in the Middle East, while the A380 came to an end due to order cancellation.
Regarding alliances, these airlines have adopted the following strategies to suit the nature of their
respective companies. Emirates Airlines has partnerships with suitable airlines from region to region
or from route to route. Etihad Airways has invested in other companies to form equity partnerships.
Qatar Airways has joined oneworld, one of the alliances.
Airline liberalization has even started in the Middle East. In Saudi Arabia, Flynas (formerly Nas Air),
the only private airline in the country and an LCC, was founded in 2010 and operates domestic and
Regional Range international flights. In the UAE, flydubai was founded as an LCC in 2008. The airline,
in cooperation with Emirates Airlines, has expanded their routes including the opening of direct flights
from Dubai to Helsinki (with 737MAX8), and in 2017, it booked and placed orders for 175 units of
the 737.
1,503
444
0
1,059
0
1,328
0
1,000
2,000
3,000
2018 2038
No.
of A
irpla
nes
Fleet Developments of Middle East Airlines
Replacement
Growth
Retained
NewDeliveries
%
44%
2,831
2,387
56%
Worldwide Market Forecast 2019-2038
88
Four countries including Saudi Arabia cut off
their diplomatic relations with Qatar in June,
2017, and even decided to refuse to allow
aircraft from Qatar to fly over their territories.
This stopped Qatar from transporting daily
commodities by land, and Qatar has relied on
transportation by sea and air. In addition, after
flight routes between Qatar and the countries
that cut off their diplomatic relations with it
were blocked, the number of aircraft which
operated in the Middle East in autumn 2017
decreased by about 60% from the previous
autumn. In addition, since flight routes to
Africa were forced to take great detours
because of these countries’ blockage, the
number of aircraft to Africa decreased by 20%
from around the same time of the previous
year.
In the Middle East, over the past 20 years from
1999 to 2018, GDP grew at an average annual
rate of 4.0%, passenger traffic demand at
11.7%, and cargo demand at 11.8%. Significant
growth continues to be expected for the period
from 2019 to 2038, with GDP set to grow at an average annual rate of 3.1%, passenger traffic demand
at 4.7%, and cargo demand at 4.9%.
The number of airplanes in service will increase from 1,503 in 2018 to 2,831 in 2038. Over this period,
the units delivered and the sales value (at 2018 list prices) are expected to be 2,387 units, worth 570
billion U.S. dollars, respectively. Of the units delivered, 56% will be new demand. In addition, wide
body airplanes will account for 48% of new deliveries for passenger airplanes.
RPK in this region in 2018 was 753×109 passenger kilometers, of which the Long Range (4,500 km or longer) market accounted for 63%, which is remarkable, and over these past 20 years, this market has shown an annual average growth rate of 14% to drive growth in the air transport of this region. Since 2015, however, the pace of growth has slowed. This is likely to be due to the end of the increase in transport demand due to the opening of new routes and the end of the re-splitting of transport share of other airlines. In this forecast, the average growth rate, in terms of RPK, in a Long Range for the next 20 years is expected to be 4.5%. Although growth rate will be slow compared with its best period, it will stand comparison with a growth rate worldwide of 4.4%. Furthermore, it is expected that the Medium Range and Short Range markets will show growth rates of 5.6% and 4.8% respectively, and
Growth Measures (2019-2038) Middle EastGDP 3.1 %
RPK 4.7 %
RTK 4.9 %
Fleet 3.2 %
Sales (2018 List Price) 570 US$ billion
New Deliveries2018 2038 2019-2038
Passenger Turboprop 15-39 seats 11 11 10 40-59 seats 9 1 1 More than 60 seats 27 37 21 Total 47 49 32
Passenger Jet 20-59 seats 14 6 6 60-99 seats 57 66 64 Regional Jet 71 72 70 100-119 seats 9 67 65 120-169 seats 496 716 604 170-229 seats 64 283 278 Narrowbody 569 1,066 947 230-309 seats 195 446 376 310-399 seats 391 866 747 More than 400 seats 144 80 16 Widebody 730 1,392 1,139 Total 1,370 2,530 2,156
Jet Freighter (New+Converted) Narrow Body 6 39 39 Medium Widebody 28 44 34 Large 52 169 126 Total 86 252 199
Total Fleet 1,503 2,831 2,387
Fleet
Worldwide Market Forecast 2019-2038
89
even if growth of the Long Range market calms down, transport demand in this region is expected to continue growing.
Major airlines in this region have proactively carried out air freight transport “belly cargo” business using vacant spaces of lower holds in their large wide body passenger airplanes, and realized remarkable growth, while global major airlines have been struggling to grow or maintain their air freight transport business (also, refer to Appendix H). This air freight transport business, in
terms of RTK, in the next 20 years, is expected to grow at an annual average rate of 4.7%, compared with 11.8% over the past 20 years. This level-off of cargo traffic will be almost comparable with that (from 11.7% to 4.7%) of passenger traffic by passenger airplanes that provide vacant spaces in lower holds therein. Emirates Airlines has increased its RTK focusing on belly cargo so far, and in addition, it has begun strengthening transport by freighter jets since 2013, although the growth of RTK in total has slightly stagnated. Qatar Airways has increased its RTK by belly cargo and freighter jets at almost the same growth rate, and it continued growing in 2017. The airline is expected to grow in terms of RTK for a while, considering the disruption of land transport since June 2017, caused by the break of diplomatic relations and the blocking of border roads.
LR 4.5%MR 5.6%SR 4.8%RR 3.2%
LR 14.0%MR 10.4%SR 8.5%RR 6.6%
2018-2038Ave. Growth Rate
1998-2018Ave. Growth Rate
14% 7% 6% 4%
14%10% 8% 8%
30%
28%23% 28%
42%55%
63% 60%
0%
20%
40%
60%
80%
100%
1998 2008 2018 2038
RPK share by distance range -Middle East
LR
MR
SR
RR
12 20 42 79 12 29 59 152 25 77
176
523
34 153
475
1146
0
400
800
1200
1600
2000
1998 2008 2018 2038
( ×109 ) RPK by distance range - Middle East
RR SR MR LR
Worldwide Market Forecast 2019-2038
90
10.5 Latin America
Latin America showed significant growth along with Asia over the past several years. With a surge in
direct investment in Latin America thanks to the development of resources and the Free Trade
Agreement, nominal GDP has more than doubled during over the ten-year period since 2000, and real
GDP growth rate from 2003 to 2008 was 5.1%. However, recently, there has been deceleration in the
economies of developed countries and China, and as prices of resources, including oil, have fallen and
exports have declined, the domestic demand that supported the Latin American economy has also
declined, so the economies of Argentina, Brazil, Venezuela, and other Latin American countries is
rapidly decelerating. While according to an analytical institution, real GDP will grow at an average
rate of 2.9% in the next 20 years, the total of real GDP in the region will have been in a “level-off”
state since 2013, and it is likely that the economic growth rate will continue to fall in the mid-term as
well.
Airline mergers took place in Latin America as in the U.S. and Western Europe. Among major airlines,
cross-border mergers have taken place between AVIANCA in Colombia and TACA in El Salvador,
and between LAN Airlines in Chile and TAM Airlines in Brazil, respectively. As a result, airlines in
this region have been consolidated into two major companies. In fact, airline restructuring made
progress in Brazil as there were also domestic mergers.
In addition, in this region too, airline liberalization has been progressing. LCCs such as GOL in Brazil,
Interjet and Volaris in Mexico, and Viva Colombia in Colombia were founded. With regard to available
seat capacity for intra-regional routes, the share of LCCs rose by about 12 times, to 35% in 2017, while
it was about 3% in 2001. In addition, in order to attract domestic demand in countries other than their
own, LCCs have established subsidiaries in those countries necessary for handling the matter.
2,047
356
0
1,691
0
1,068
0
1,000
2,000
3,000
4,000
2018 2038
No. o
f A
irpl
anes
Fleet Developments of Latin America Airlines
Replacement
Growth
Retained
NewDeliveries
%
3,115
2,759
61%
39%
Worldwide Market Forecast 2019-2038
91
In Latin America, over the past 20 years from
1999 to 2018, GDP grew at an average annual
rate of 2.3%, passenger demand at 5.7%, and
cargo demand at 0.4%. As for the growth rate
forecast from 2019 to 2038, GDP will grow at an
average annual rate of 2.9%, which will be
almost the same as that worldwide, but
passenger demand will decrease to 3.6%. Cargo
demand is expected to grow at 1.2%.
The total number of airplanes in service will
increase from 2,047 in 2018 to 3,115 in 2038.
Over this period, the units delivered and the sales
value (at 2018 list prices) are expected to be
2,759 units and 282 billion U.S. dollars,
respectively. Of the units delivered, 39% will be
new demand.
RPK in this region in 2018 was 423×109
passenger kilometers, of which the Long Range
market was the largest accounting for 40%,
followed by the Short Range market accounting
for 26%. In the next 20 years, while the Short
Range market will grow at an average rate of
4.4%, the other haul markets will grow at an
average rate ranging from 3.5% to 3.9%. The share in 2038 will be almost the same as those in 2018.
LR 3.5%MR 3.7%SR 4.4%RR 3.9%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
0%
20%
40%
60%
80%
100%
2018 2038
RPKの距離帯別シェア-**
短距離 近距離 中距離 長距離
23% 23%
26% 29%
11% 11%
40% 38%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -Latin America
LR
MR
SR
RR
Worldwide Market Forecast 2019-2038
92
10.6 Africa
Since Africa has abundant underground resources such as oil and minerals, in recent years it has been
growing rapidly mainly due to the development of these resources.
Growth potential is especially so high in Sub-Saharan Africa that the middle class will emerge and
their population will exceed 500 million by the year 2030. Some take the view that air transport
demand will grow because of the increase of middle class peoples as a carrier of consumption.
However, there are many problems such as poverty, regional conflicts and infectious disease, which
are yet to be solved.
In the African market, airlines in Europe used to be strong, however, airlines in the Middle East have
been extending their operations into Africa. Recently, airlines in the U.S. also have strengthened their
African routes, paying attention to high economic growth in Africa. Although the routes connecting
Africa and other regions have begun to be strengthened, non-stop flights operated within the African
continent are very few. Thus, when moving within Africa region, for instance, passengers or cargo
should be transported via a Middle East country. Therefore, RPK of intra-Africa routes, including
domestic flights, accounts for only around 1% of the global RPK.
Establishment of an infrastructure is necessary for the aviation industry to grow. However,
infrastructure improvement in Africa is being kept behind with a lower priority, although protectionist
measures with regard to the aviation business being taken.
Although airlines in Africa used to operate used airplanes which came from Europe, the U.S., etc., it
has been easier to have newly built airplanes in recent years, because it is relatively simple for them
to raise purchase funds compared to before, and operating leases has also been available.
1,398
218
0
1,180
0
293
0
1,000
2,000
2018 2038
No. o
f Airp
lane
s
Fleet Developments of Africa Airlines
Replacement
Growth
Retained
NewDeliveries
%
1,473
1,691
80%
20%
Worldwide Market Forecast 2019-2038
93
In Africa, over the past 20 years from 1999 to
2018, GDP grew at an average annual rate of
4.0%, passenger demand at 5.1%, and cargo
demand at 4.9%. As for the growth rate
forecast from 2019 to 2038, GDP will grow at
an average annual rate of 3.7%, passenger
demand at 3.8%, and cargo demand at 4.1%.
The number of airplanes in service will
increase from 1,398 in 2018 to 1,691 in 2038.
Over this period, the units delivered and the
sales value (at 2018 list prices) are expected to
be 1,473 units and 160 billion U.S. dollars,
respectively. 80% of units delivered will be to
meet demand for replacement of existing
airplanes, advancing the updates of old
equipment.
RPK by African airlines in 2018 was 169×109
kilometers, of which the Long Range (4,500
km or longer) market accounted for 38%,
which was the largest. In this forecast, the
Medium Range market in the next 20 years is
expected to grow at an average rate of 5.6%,
followed by the Short Range market at 4,1%.
RPK in 2038 is expected to be 361×109 passenger kilometers, of which the Medium Range market
will be the largest accounting for 38%.
Growth Measures (2019-2038) AFRICAGDP 3.7 %
RPK 3.8 %
RTK 4.1 %
Fleet 1.0 %
Sales (2018 List Price) 160 US$ billion
New Deliveries2018 2038 2019-2038
Passenger Turboprop 15-39 seats 329 239 222 40-59 seats 85 27 21 More than 60 seats 112 183 134 Total 526 449 377
Passenger Jet 20-59 seats 116 24 24 60-99 seats 74 131 123 Regional Jet 190 155 147 100-119 seats 46 35 34 120-169 seats 396 491 420 170-229 seats 6 173 173 Narrowbody 448 699 627 230-309 seats 81 156 125 310-399 seats 77 128 102 More than 400 seats 6 0 0 Widebody 164 284 227 Total 802 1,138 1,001
Jet Freighter (New+Converted) Narrow Body 40 60 60 Medium Widebody 17 15 15 Large 13 29 20 Total 70 104 95
Total Fleet 1,398 1,691 1,473
Fleet
LR 2.7%MR 5.6%SR 4.1%RR 2.0%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
14% 9%
21% 22%
27% 38%
38% 31%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -Africa
LR
MR
SR
RR
Worldwide Market Forecast 2019-2038
94
10.7 CIS
The economies of CIS member countries have been growing significantly. Russia has overcome the
destructive economic crisis after the dissolution of the former Soviet Union and recorded economic
growth for 8 consecutive years since 2000. Ukraine* has tried to promote a transparent market-
oriented economy. Kazakhstan and Turkmenistan have shown steady economic development due to
their rich resources. In Russia, the average wage rose from 2,200 rubles in 2000 to 12,500 rubles in
2007, and the number of people with middle-class income increased significantly, but instability has
continued in recent years, due to falling crude oil prices and Western economic sanctions over the
Ukraine situation.
(* JADC keep Ukraine to be included in CIS in this report to retain continuity of statistics).
Air transport is important for movement within the region including domestic travel because the CIS
has a vast land area, and thus distances between cities are long. Accordingly, there has been strong air
transport demand. Above all, during the ten-year period from 2004 to 2014, when economic growth
in this region was stable, the average annual growth rate of RPK reached 8.9%. Although it has stopped
growing since then due to the economic slowdown in emerging countries, RPK seems to have been
303×109 passenger kilometers, with a passenger load factor at about 81%, in 2018.
Among the airplanes operated in the CIS, those manufactured during the former Soviet era have been
decreasing, with a shift to airplanes manufactured in the U.S. and Western Europe. As of the end of
2016, 72% of airplanes in service being operated by airlines in the CIS and 82% of the backlog are
airplanes by Western manufacturers including Airbus and Boeing.
In the CIS, over the past 20 years from 1999 to 2018, GDP grew at an average annual rate of 4.1%,
1,518
301
0
1,217
0
293
0
1,000
2,000
2018 2038
No. o
f Airp
lane
s
Fleet Developments of CIS Airlines
Replacement
Growth
Retained
NewDeliveries
%
1,811
1,510 81%
19%
Worldwide Market Forecast 2019-2038
95
passenger demand at 7.9%, and cargo demand
at 7.3%. As for the growth rate forecast from
2019 to 2038, GDP will grow at an average
annual rate of 2.1%, passenger demand at 2.4%
and cargo demand at 3.4%.
The number of airplanes in service will
increase from 1,518 in 2018 to 1,811 in 2038.
Over this period, the demand and the sales
value (at 2018 list prices) are expected to be
1,510 units and 165 billion U.S. dollars,
respectively. 81% of units delivered will be to
meet demand for replacements, as the updating
of old models in progress.
Of RPK, the Medium Range (2,000 to 4,500
km) market will account for 44%, followed by
the Short Range (1,000 to 2,000 km)
accounting for 26%. For 2038, it is expected
that the average growth rate of Regional Range
and Short Range markets will be 2.9% each,
which is relatively high, and the rate of
Medium Range and Long Range markets will
be 2.1 and 2.2% respectively. The intra-
regional share of RPK in 2038 is expected to be
almost the same as that in 2018.
LR 2.2%MR 2.1%SR 2.9%RR 2.9%
LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range
2018-2038Ave. Growth Rate
8% 9%
26% 29%
44% 41%
22% 21%
0%
20%
40%
60%
80%
100%
2018 2038
RPK share by distance range -CIS
LR
MR
SR
RR
Growth Measures (2019-2038) CISGDP 2.1 %
RPK 2.4 %
RTK 3.4 %
Fleet 0.9 %
Sales (2018 List Price) 165 US$ billion
New Deliveries2018 2038 2019-2038
Passenger Turboprop 15-39 seats 111 122 91 40-59 seats 126 11 9 More than 60 seats 25 93 82 Total 262 226 182
Passenger Jet 20-59 seats 80 25 25 60-99 seats 164 218 170 Regional Jet 244 243 195 100-119 seats 80 58 55 120-169 seats 506 586 473 170-229 seats 143 179 145 Narrowbody 729 823 673 230-309 seats 59 177 168 310-399 seats 64 100 82 More than 400 seats 9 0 0 Widebody 132 277 250 Total 1,105 1,343 1,118
Jet Freighter (New+Converted) Narrow Body 23 19 19 Medium Widebody 72 68 60 Large 56 155 131 Total 151 242 210
Total Fleet 1,518 1,811 1,510
Fleet
Worldwide Market Forecast 2019-2038
96
( Intentionally blank )
Worldwide Market Forecast 2019-2038
97
11. Aero Engine Demand
Aero engine demand is comprised of two segments: engines installed on airplanes at the time of
delivery, and spares. The former is the result of multiplying the number of airplanes sold by the number
of engines mounted on the airplanes, and the latter is the result of multiplying the number of engines
mounted on airplanes at the time of delivery by a spare ratio of 10%. An engine is the most expensive
equipment to purchase among components of an airplane, and engine prices account for about 20% of
the amount of airplanes sold.
The total number of engines sold over the 2019 to 2038 period will be 87,685 of which 80,764 will be
jet engines for both passenger jets and freighter jets, and 6,921 will be turboprop engines for passenger
turboprop airplanes. Their total sales value will amount to 1.36 trillion U.S. dollars (2018 market
prices). Of that amount, jet engines will account for 1.35 trillion U.S. dollars, and turboprop engines
will make up the remaining 15 billion U.S. dollars.
The jet engine with the largest share of the market at 61%, or 48,929 units is the 12,000 to 35,000 lbs.
thrust class used in narrow body jets such as the 737 and the A320 series. This is followed by the
65,000 to 115,000 lbs. thrust class engine installed on wide body jets such as the 777/787 and the
A330/A350/A380, whose value is 18,608 units (23% share), then by jet engines with less than 12,000
lbs. of thrust used on regional jets, at 7,569 units (9.4% share), and finally by the 35,000 to 65,000 lbs.
thrust class of engine mounted on airplanes such as the 747/767 etc. at 5,658 units (7.0% share).
Looking at jet engine sales values, given higher unit prices, the 65,000 to 115,000 lbs. class, which are
6,921 7,569
48,929
5,658
18,608
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
TurboProp <12 12-35 35-65 65-115
No.of Engines Value(US$billion)
Turboprop 6,921 15Jet 80,764 1,345
Total 87,685 1,360
CRJ700~1000EMB170~190
ARJ21
ATR42/72DHC-8L410
Aero Engine Delivery and Sales ForecastNo. of Engines
0
100
15 53
558
106
628
200
300
2018 Market Price(US$ billion)
Thrust(×1000 lbs)
400
500
600
A319,A320,A321737
MRJ M90/M100A220-100/-300
747,767FNMA
A380A350,A330
777,787
*Including 10% of total number of engines installed on airplanes as spare engines.
700
Worldwide Market Forecast 2019-2038
98
no more than 23% of total units sold, will account for the largest share of the market, at 6,283 billion
U.S. dollars, which is 47% of total sales value. This is followed by the 12,000 to 35,000 lbs. thrust
class, which will sell the most units, with a value of 558.1 billion U.S. dollars (41% share). The 35,000
to 65,000 lbs. thrust class will be worth 1,056 billion U.S. dollars (7.9% share), and the smallest jet
engine, the 12,000 lbs. or less thrust class, will be worth 53.1 billion U.S. dollars (4% share).
By region, the Asia-Pacific region, which has the highest demand for airplanes, is the biggest market.
The number of engines sold in the region will be 35,343, with a 40% share of engines sold, and the
sales value will be 578.9 billion dollars, with a 41% share of sales. This will be followed by 18,005
units (21% share) and 279.7 billion U.S. dollars (20% share) in Europe, and 17,147 units (20% share)
and 256.2 billion U.S. dollars (18% share) in North America. In the Middle East, the number of sales
will be around 30% of the level in the U.S. and Western Europe, at 5,236 units; however, since there
is strong demand for wide body jets, the sales value will be 133.3 billion U.S. dollars, which is around
50% of the level of the U.S. and Europe.
17,147 18,005
35,343
5,236 5,788 3,196 3,021
256280
579
133
6740 41
0
100
200
300
400
500
600
700
800
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
North America Europe Asia-Pacific Middle East Latin America Africa CIS
Aero Engine Delivery and Sales Forecast by RegionNo. of Engines
North America Europe Asia-Pacific Middle East Latin America Africa CIS
Total87,685 units
1,360 US$ billion
2018 Market PriceUS$ billion
*Including 10% of total number of engines installed on airplanes as spare engines.
Worldwide Market Forecast 2019-2038
99
12. Methodology
Passenger Forecast Methodology
The demand forecasting flow is divided into three sections (air trafic, open ASK, and aircraft sales
forecast) as shown below:
Forecast for air traffic demand or RPK: Forecasted air traffic demand (RPK) is calculated by
econometric method as a function of GDP and yields, because it is strongly affected by the correlation
with income and fares. However, RPK significantly changes due to effects of various events, such as
a major shift in aviation policies (e.g. liberalization of air transport), new entry of LCCs, and
development of other transportation modes (e.g. high-speed railways). Therefore, it is so difficult to
forecast a future demand only based on the correlation with GDP and yields that JADC forecasts RPK
by considering the impact of possible future events as well as by conducting an analysis based on
causal models using GDP and passenger yields. The RPK forecast is categorized by region (13 regions)
and distance (4 segments).
Forecast for open ASK: The available transportation capacity to be delivered in the future (open ASK)
is calculated by the retirement forecast of existing aircrafts as well as the forecast of the available
transportation capacity necessary to transport the air traffic demand which is calculated by macro
analysis. The forecast is categorized by region (13 regions) and distance (4 segments), as well as seat
size (15 segments).
Forecast for aircraft sales: The number of aircrafts which will be deliverd in the future are calculated
based on the open ASK, aircraft performance (number of seats per aircraft, cruise range etc.) and sales
force of each manufacturer, and aggregated by category.
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100
Cargo Forecast Methodology
The demand forecasting flow is divided into three sections (traffic forecast, capacity forecast and
freighter forecast) as shown below:
Forecast for air cargo: Air cargo demand is known to have a correlation with GDP and cargo yields
as is the case with the passenger aircraft demand. JADC forecasts the air cargo demand by analyzing
past data based on causal models using GDP and real cargo yields and by evaluating various factors
that affect the air cargo demand considering the present and future trends. After consolidating the
global flight routes into 33 markets, the air cargo demand is forecasted by market.
Forecast for supplied transportation capacity of cargo freighters: A forecast is calculated by the
macroeconomic forecasting method (top-down analysis), in which the forecast is categorized by region
(7 regions) and payload (3 segments). Air cargo is transported by cargo freighters or in the lower deck
hold of passenger aircrafts. The forecasts of the cargo transport demand (as RTK) and supplied
transportation capacity (as ATK) of cargo freighters can be calculated by deducting them of those
passenger aircrafts from the results of the forecasted air cargo demand. The RTK and ATK of those
passenger aircrafts are estimated based on the results of the forecasted passenger aircraft demand.
Air cargo transport volume = Cargo transport volume carried in the lower deck hold of passenger
aircrafts + Cargo transport volume carried by freighters
By analyzing the aircraft type composition and flight routes and simulating the service life of freighters,
the supplied transportation capacity needed in the future is forecasted by category.
Forecast for sale of aircrafts: The forecasted number of aircrafts to be sold is calculated by allocating
the supplied transportation capacity needed in the future to specific aircrafts in view of aircraft
performance, including payloads and cruising distance, and the ratio of newly-built aircrafts and
converted freighters.
Cargo Demand
Economic Forecast
(GDP)
YieldForecast
Cargo Capacityneeded
FreighterCapacityneeded
FreighterDemand
Production Freighter Deliveries
Lower HoldCapacity
PassengerForecast
Retirement
Converted Freighter
Network Analysis
FleetAnalysis
Traffic Forecast Capacity Forecast Freighter Forecast
Freighter Demand Forecast Flow Chart
Worldwide Market Forecast 2019-2038
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Abbreviations
A4A Airlines for America
AAPA Association of Asia Pacific Airlines
AEA Association of European Airlines
ASEAN Association of South-East Asian Nations
ASK Available Seat Kilometers
ATK Available Ton Kilometers
BRICs Brazil, Russia, India, China,
BTS Bureau of Transport Statistics, U.S. Department of Transportation
CAPA Centre for Asia Pacific Aviation
CASK Cost per ASK
CIS Commonwealth of Independent States
EIA Energy Information Administration
ETS Emission Trading Scheme
EU European Union
FFP Frequent Flyer Program
FSC Full Service Carrier
FTA Free Trade Agreement
GDP Gross Domestic Product
HOM Heavy and Oversize air cargo Market
IATA International Air Transport Association
ICAO International Civil Aviation Organization
IEA International Energy Agency
JADC Japan Aircraft Development Corporation
JICA Japan International Cooperation Agency
LCC Low Cost Carrier
MLIT Ministry of Land, Infrastructure, Transport and Tourism
OPEC Organization of Petroleum Exporting Countries
RASK Revenue per ASK
RPK Revenue Passenger Kilometers
RTK Revenue Ton Kilometers
SARS Severe Acute Respiratory Syndrome
TEU Twenty-Foot Equivalent unit
UIC International Union of Railways
UN United Nations
UNWTO UN World Tourism Organization
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Glossary of Terms
ASK or Available Seat Kilometers
Passenger transport capacity
The number of seats × Transportation distance (kilometers)
RPK or Revenue Passenger Kilometers
Transportation performance with revenue passengers on board and flown
The number of revenue passengers × Transportation distance (kilometers)
Passenger Load Factor
A numerical value indicating the ratio of the number of revenue passengers on board to the
total number of seats, that is, an indicator for measuring seat sales
Revenue passenger kilometers (RPK) ÷ Available seat kilometers (ASK)
Different from a boarding rate which does not include non-revenue passengers
Yield
Revenue per kilometer (or per mile) for one passenger
Obtained by “Passenger revenue ÷ Revenue passenger kilometers”
In the case of cargo, revenue per kilometer (or per mile) for one ton of cargo
Obtained by “Cargo revenue ÷ Revenue ton kilometers”
CASK or Cost per ASK
unit cost
An indicator for cost per unit passenger transport capacity
Obtained as cost per seat kilometer (ASK)
ATK or Available Ton Kilometers
Air cargo capacity
Payload capacity (tons) × Transportation distance (kilometers)
RTK or Revenue Ton Kilometers
Transportation performance with revenue cargo on board and flown
Revenue Cargo (tons) × Transportation distance (kilometers)
Cargo load factor
Revenue ton kilometers (RTK) ÷ Available ton kilometers (ATK)
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Appendix A : Definitions of Airplane Segments
Passenger Turboprops
15-19 seats DHC6-400, Do228, BE1900, L410
20-39 seats DHC8-200, Saab 340, Do328, Su-80
40-59 seats ATR42, DHC8-300, An-140, MA60/600
60-79 seats ATR72, DHC8-400, Il-114
80-99 seats (ATR92)
Passenger Jets
Regional Jets
20-39 seats ERJ135, Do328JET
40-59 seats CRJ100/200, ERJ140/145
60-79 seats CRJ700, EMBRAER170/175/175E2, MRJ70, An-148,
80-99 seats CRJ900/1000, EMBRAER190/E2, MRJ90, ARJ21, Superjet100
Narrowbody
100-119 seats A220-100, EMBRAER195/E2, A318, 717, 737-600,
120-169 seats A319ceo/neo, A320ceo/neo, 737-700/-800, 737MAX-7/-8,
A220-300, 727, C919-200, MS21-200/-300, Tu234
170-229 seats A321ceo/neo, 737-900ER, 737MAX-9/-10, 757, C919-300, MS21-400, Tu-204
Widebody
230-309 seats 787-8/-9, A330ceo/neo, 767, A300, A310, Il-96
310-399 seats A350-900/-1000, 787-10, 777X-8, 777, A340, MD-11
400-499 seats 747, 777X-9
>500 seats A380
Jet Freighters
Narrowbody (< 50 ton) A320, A321, BAe146, CRJ100/200, DC-8, DC-9, ERJ 145,
MD-80, 707, 727, 737, 757, Tu-204
Medium Widebody (40-70 ton) A300, A310, A330, DC-10-10, L-1011, 767, 787, Il-76
Large (>70 ton) A350, DC-10-30/-40, MD-11, 747, 777, An-124, An-225
Note: Aircraft are segmented according to number of seats based on 1-class seat configuration for 99 seats or less, 2-class seat configuration for 100–229 seats, and 3-class seat configuration for 230 seats or more.
Worldwide Market Forecast 2019-2038
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Appendix B : Definitions of Aero Engine Segments
Engine ManufacturerThrust
(x1000 lb)Aircraft Type (No. of Engines)
CF6-80E1 GE/SNECMA 67~72 A330(2)
GEnx GE 67~73 B787(2), B747-8(4)
GE90 GE/SNECMA 75~115 B777(2)
GP7000 GE/PW 76~82 A380(4)
PW4000-100 PW 64~70 A330(2)
PW4000-112 PW 74~98 B777(2)
TRENT 700 RR 67~71 A330(2)
TRENT 800 RR 75~95 B777(2)
TRENT 900 RR 68~84 A380(4)
TRENT 1000 RR 64~74 B787(2)
TRENT 7000 RR 68~72 A330neo(2)
TRENT XWB RR 83~92 A350XWB(2)
CF6-50 GE/SNECMA 46~54 B747(4), A300(2)
CF6-80A GE/SNECMA 48~50 B767(2), A310(2)
CF6-80C2 GE/SNECMA 52~62 B747(4), B767(2), A300-600(2), A310(2)
MD-11(3)
JT9D PW 43~56 B747(4), B767(2), A300(2), A310(2)
PW4000-94 PW 52~68 B747(4), B767(2), A300-600(2), A310(2)
MD-11(3)
RB211-524G/H RR 58~61 B747-400(4), B767-300(2)
TRENT 500 RR 56 A340-500/600(4)
PW2000 PW 38~42 B757(2)
RB211-535C/E4 RR 37~43 B757(2)
V2500 IAE 22~30 A319(2), A320(2), A321(2), MD-90(2)
CFM56 CFM INT'L 18~34 B737-300/400/500(2),
B737-600/700/800/900(2)
A318(2), A319(2), A320(2), A321(2),
A340-200/300(4)
LEAP-1 CFM INT'L 18~33 A319neo(2), A320neo(2), A321neo(2),
737MAX(2), C919(2)
PW1000G PW 15~35 MRJ70/90(2), A220-100/300(2), MS-21(2)
A319neo(2), A320neo(2), A321neo(2)
EMBRAER 175E2/190E2/195E2(2)
JT8D-200 PW 18~21 MD-80(2)
PW6000 PW 20~23 A318(2)
BR700 BMW/RR 18~22 717(2)
SMI46 SNECMA/NPO 17.4 SSJ100(2)
CF34 GE 8.6~20 CRJ100/200(2), CRJ700(2), CRJ900(2), CRJ1000(2)
EMBRAER 170/175(2), EMBRAER 190/195(2),
ARJ21(2)
AE3007 ALLISON 7.2~12 ERJ 135(2), ERJ 140(2), ERJ 145(2)
PW300 PWC 4.2~5.7 328JET(2)
CT7 GE 1700~1940 SHP CN235(2), SAAB340(2), L610(2)
PW100 PWC 2000~5000 SHP ATR42(2), ATR72(2),
DHC8-100(2)/300(2)/400(2), Do328(2)
EMB120(2)
PT6A PWC 700~1300 SHP DHC-6-400(2), BEECH1900
TPE 331 GARRETT 700~1100 SHP CASA212(2), Metro(2), Do228(2)
Turboprop
ThrustCategory(x1000 lb)
65~115
35~65
12~35
~12
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Appendix C1 : Air Passenger Traffic ( by Region )
Average Growth
Region 1998 2018 2038 2019-2038
North America 1,060 1,856 3,443 3.1%
Europe 858 1,974 4,559 4.3%
Western Europe 840 1,862 3,994 3.9%Eastern Europe 19 112 564 8.4%
Asia/Pacific 672 2,781 7,784 5.3%
Japan 157 198 357 3.0%China 123 1,251 3,768 5.7%North-East Asia 83 239 441 3.1%South-East Asia 167 634 1,935 5.7%South Asia 46 258 913 6.5%Oceania 96 201 370 3.1%
Middle East 82 753 1,903 4.7%
Latin America 140 423 864 3.6%
Africa 62 169 359 3.8%
CIS 67 303 489 2.4%
World 2,942 8,259 19,400 4.4%
RPK ( ×10 9 )
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Appendix C2 : Air Passenger Traffic ( by Route )
Average Growth
Region 1998 2018 2038 2019-2038
Within Africa 17 71 198 5.3%
Within Asia Pacific 356 1,358 3,866 5.4%
Within China 62 820 2,540 5.8%
Within Europe 374 965 2,243 4.3%
Within Latin America 77 280 665 4.4%
Within Middle East 24 83 195 4.4%
Within North America 771 1,300 2,313 2.9%
Within CIS 37 146 275 3.2%
CIS International 44 217 622 5.4%
Africa - Asia Pacific 4 5 7 2.3%
Africa - Europe 78 190 337 2.9%
Africa - Middle East 8 72 232 6.0%
Africa - North America 4 13 38 5.6%
Asia Pacific - Europe 198 454 824 3.0%
Asia Pacific - Middle East 45 255 808 5.9%
Asia Pacific - North America 188 415 837 3.6%
Europe - Middle East 54 300 870 5.5%
Europe - Latin America 102 226 463 3.7%
Europe - North America 347 546 859 2.3%
North America - Latin America 125 231 455 3.4%
North America - Middle East 12 109 326 5.6%
Rest of World 16 227 425 3.2%
World 2,942 8,259 19,400 4.4%
RPK ( ×10 9 )
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Appendix D : Air Cargo Traffic
Market Average Growth
RTKs in billions 1998 2018 2038 2019-2038
Intra Africa 0.3 0.8 1.5 3.2%
Intra Asia Pacific 15.7 38.7 97.7 4.7%
Intra Europe 3.8 6.2 11.6 3.2%
Intra Latin America 1.7 2.1 5.3 4.7%
Intra Middle East 0.5 1.3 4.0 5.7%
Intra North America 20.3 24.1 41.7 2.8%
Africa - Asia Pacific 0.3 1.3 3.4 2.6%
Africa - Europe 3.5 5.4 9.5 2.9%
Africa - Middle East 0.3 2.8 9.5 6.3%
Asia Pacific - Europe 23.2 38.7 89.8 3.9%
Asia Pacific - Middle East 1.7 13.4 48.5 6.7%
Asia Pacific - North America 20.9 50.1 109.2 4.0%
Europe - Middle East 3.1 12.3 23.4 3.3%
Europe - Latin America 5.8 6.9 12.8 3.1%
Europe - North America 23.3 23.0 36.3 2.3%
Latin America - North America 4.3 6.6 13.9 3.8%
Rest of World 2.1 14.2 21.9 2.2%
World 131.8 255.3 546.5 3.9%
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Appendix E : Airplane Demand
Changes in Airplanes and Sales by Region
Changes in Airplanes and Sales by Airplane Capacity
Region 2018 Fleet Removed New Deliveries 2038 Fleet Value (US$B)
North America Total 8,262 7,171 7,679 9,079 997 Passenger Turboprop 714 619 374 469 7
Passenger Jet 6,640 5,823 6,857 7,674 844
Jet Freighter 908 729 448 936 145
Europe Total 5,835 4,664 8,151 9,629 1,228 Passenger Turboprop 585 449 451 587 11 Passenger Jet 4,949 3,980 7,625 8,594 1,193 Jet Freighter 301 235 75 448 24
Asia-Pacific Total 8,980 6,341 15,950 19,069 2,552 Passenger Turboprop 1,080 733 1,302 1,649 30 Passenger Jet 7,546 5,353 14,384 16,577 2,426 Jet Freighter 354 255 264 843 97
Middle East Total 1,503 1,059 2,336 2,831 570 Passenger Turboprop 47 30 32 49 1 Passenger Jet 1,370 996 2,156 2,530 514 Jet Freighter 86 33 148 252 55
Latin America Total 2,047 1,691 2,611 3,115 282 Passenger Turboprop 459 386 412 485 8 Passenger Jet 1,492 1,218 2,171 2,445 265 Jet Freighter 96 87 28 185 9
Africa Total 1,398 1,180 1,407 1,691 160
Passenger Turboprop 526 454 377 449 7
Passenger Jet 802 665 1,001 1,138 142
Jet Freighter 70 61 29 104 11CIS Total 1,518 1,217 1,347 1,811 165
Passenger Turboprop 262 218 182 226 4 Passenger Jet 1,105 880 1,118 1,343 148 Jet Freighter 151 119 47 242 13
World Total 29,543 23,323 39,481 47,225 5,953 Passenger Turboprop 3,673 2,889 3,130 3,914 68 Passenger Jet 23,904 18,915 35,312 40,301 5,531 Jet Freighter 1,966 1,519 1,039 3,010 354
(Jet Freighter contains newly built only)
Airplane Category 2018 Fleet Removed New Deliveries 2038 Fleet Value (US$B)
Passenger Turboprop 15-39 seats 1,812 1,689 1,477 1,600 23 40-59 seats 626 553 149 222 3 More than 60 seats 1,235 647 1,504 2,092 42 Total 3,673 2,889 3,130 3,914 68
Passenger Jet 20-59 seats 1,076 1,076 119 119 3 60-99 seats 2,369 2,028 2,992 3,333 111 Regional Jet 3,445 3,104 3,111 3,452 115 100-119 seats 592 519 1,748 1,821 122 120-169 seats 12,689 9,919 12,576 15,346 1,375 170-229 seats 2,666 2,164 8,184 8,686 1,079 Narrowbody 15,947 12,602 22,508 25,853 2,576 230-309 seats 1,750 1,182 5,534 6,102 1,288
310-399 seats 2,356 1,743 4,129 4,742 1,540
More than 400 seats 406 284 30 152 13
Widebody 4,512 3,209 9,693 10,996 2,840 Total 23,904 18,915 35,312 40,301 5,531
Jet Freighter
Narrow Body 720 718 0 1,114 0
Medium Widebody 651 485 462 819 117
Large 595 316 577 1,077 237 Total 1,966 1,519 1,039 3,010 354
(Jet Freighter contains newly built only)
Worldwide Market Forecast 2019-2038
109
Fleet by Reg ion
2018 Fleet
North America Europe Asia-Pacific Middle East Latin America Africa CIS World
Passenger Turboprop 15-39 seats 439 194 435 11 293 329 111 1,812 40-59 seats 106 69 156 9 75 85 126 626 More than 60 seats 169 322 489 27 91 112 25 1,235Total 714 585 1,080 47 459 526 262 3,673
Passenger Jet 20-59 seats 745 66 11 14 44 116 80 1,076 60-99 seats 1,196 385 319 57 174 74 164 2,369 Regional Jet 1,941 451 330 71 218 190 244 3,445 100-119 seats 150 138 71 9 98 46 80 592 120-169 seats 2,833 2,902 4,637 496 919 396 506 12,689 170-229 seats 1,048 511 797 64 97 6 143 2,666 Narrowbody 4,031 3,551 5,505 569 1,114 448 729 15,947 230-309 seats 397 330 563 195 125 81 59 1,750 310-399 seats 267 486 1,036 391 35 77 64 2,356 More than 400 seats 4 131 112 144 0 6 9 406 Widebody 668 947 1,711 730 160 164 132 4,512Total 6,640 4,949 7,546 1,370 1,492 802 1,105 23,904
Jet Freighter Narrow Body 267 142 170 6 72 40 23 720 Medium Widebody 380 78 53 28 23 17 72 651 Large 261 81 131 52 1 13 56 595Total 908 301 354 86 96 70 151 1,966
2038 Fleet
North America Europe Asia-Pacific Middle East Latin America Africa CIS World
Passenger Turboprop15-19席 79 34 128 2 87 74 57 461 40-59 seats 23 18 104 1 38 27 11 222 More than 60 seats 200 405 997 37 177 183 93 2,092Total 469 587 1,649 49 485 449 226 3,914
Passenger Jet 20-59 seats 0 28 3 6 33 24 25 119 60-99 seats 1,553 517 562 66 286 131 218 3,333 Regional Jet 1,553 545 565 72 319 155 243 3,452 100-119 seats 612 461 413 67 175 35 58 1,821 120-169 seats 2,626 3,367 6,351 716 1,209 491 586 15,346 100-169 seats 3,238 3,828 6,764 783 1,384 526 644 17,167 Narrowbody 4,781 5,727 10,976 1,066 1,781 699 823 25,853 230-309 seats 925 1,357 2,797 446 244 156 177 6,102 310-399 seats 415 938 2,194 866 101 128 100 4,742 More than 400 seats 0 27 45 80 0 0 0 152 Widebody 1,340 2,322 5,036 1,392 345 284 277 10,996Total 7,674 8,594 16,577 2,530 2,445 1,138 1,343 40,301
Jet Freighter Narrow Body 197 228 423 39 148 60 19 1,114 Medium Widebody 408 118 131 44 35 15 68 819 Large 331 102 289 169 2 29 155 1,077Total 936 448 843 252 185 104 242 3,010
2019-2038 New Deliveries
North America Europe Asia-Pacific Middle East Latin America Africa CIS World
Passenger Turboprop15-19席 71 26 81 1 81 60 26 34620-39席 164 129 419 9 183 162 65 1,131 More than 60 seats 119 282 740 21 126 134 82 1,504Total 374 451 1,302 32 412 377 182 3,130
Passenger Jet 20-59 seats 0 28 3 6 33 24 25 119 60-99 seats 1,392 447 532 64 264 123 170 2,992 Regional Jet 1,392 475 535 70 297 147 195 3,111 100-119 seats 602 430 396 65 166 34 55 1,748 120-169 seats 2,308 2,756 4,971 604 1,044 420 473 12,576 100-169 seats 2,910 3,186 5,367 669 1,210 454 528 14,324 170-229 seats 1,361 1,863 3,988 278 376 173 145 8,184 230-309 seats 833 1,247 2,586 376 199 125 168 5,534 310-399 seats 361 851 1,897 747 89 102 82 4,129 More than 400 seats 0 3 11 16 0 0 0 30 Widebody 1,194 2,101 4,494 1,139 288 227 250 9,693Total 6,857 7,625 14,384 2,156 2,171 1,001 1,118 35,312
Jet Freighter (New Build) Narrow Body 0 0 0 0 0 0 0 0 Medium Widebody 239 45 73 29 26 9 41 462 Large 209 30 191 119 2 20 6 577Total 448 75 264 148 28 29 47 1,039
Jet Freighter (Converted) Narrow Body 195 228 423 39 148 60 19 1,112 Medium Widebody 64 52 45 5 0 6 19 191 Large 50 27 12 7 0 0 125 221Total 309 307 480 51 148 66 163 1,524
Worldwide Market Forecast 2019-2038
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Appendix F : Effect of Crude Oil Price on RPK (via passenger yield only)
Since transport demand (RPK) has a strong correlation with an economic situation
(GDP) and airfares (yield), it is affected by economic changes due to changes of crude oil
prices as well as changes of airfares due to changes of fuel prices, and rising fuel prices
gives negative effects to RPK.
This page shows calculation results concerning effects given to RPK via yield by crude
oil prices. A ratio of fuel costs to the cost structure of airlines during the period when
crude oil prices were stable is estimated, and yield changes are estimated considering
these fuel costs were expanding in proportion to fuel prices during the period when fuel
prices were soaring. The graph below shows the RPK changes estimated in the foregoing
manner.
(This calculation contains the effect of crude oil price changes on RPK via passenger
yield (i.e. airfare) only. The effect via GDP is not included.)
0
50
100
150
200
250
1990 2000 2010 2020 2030 2040Av
era
ge
Sp
ot
Pri
ce
(2
01
8U
S$
/bb
l.)
Changes and forecasts in crude oil prices (Brent Crude Oil)
EIA High Oil Price Case
EIA Low oil and gas resource and technology
EIA Reference Case
EIA High oil and gas resource and technology
IHS reference ( Brent Base )
JADC
EIA Low Oil Price Case
Source : EIA, IHS Markit
Brent Crude Oil Price(Average Spot Price)
'19-'38
EIA High 3.9 32152EIA Low O&T 4.1 33923EIA Ref 4.2 34181EIA High O&T 4.2 34450IHS Ref. 4.3 35152JADC 4.4 35312EIA Low 4.4 35786
Number ofJet Airliners
DeliveredGrowthRate (%)
0
5000
10000
15000
20000
25000
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
RPK (×109) Influence of crude oil price on RPK (via Yield only)
EIA Low
EIA High O&T
EIA Ref
EIA Low O&T
EIA High
JADC & Actual
IHS Ref.
Worldwide Market Forecast 2019-2038
111
Appendix G : Evaluation of Secondary Deliveries
These demand forecasts for the next 20 years are calculated without including the
number of airplanes delivered within the forecast period and retired earlier within the
period in that the average retirement age of production airplanes has been around 25
years so far (longer than the forecast period).
However, in recent years, some groups of airplanes to retire though there are not many,
have begun to appear. It is estimated that these airplanes would have been operated
with high frequency by LCCs or FSCs on short-haul domestic routes. Considering recent
rising LCCs, such airplanes that retire at a younger age may be increasing in the future.
Light orange bars in the graph show the number of units to be delivered to replace them
during the forecast period to keep the Fleet constant. These are “secondary deliveries”.
(The secondary deliveries are not included in the number of units in the text.)
Of secondary deliveries, 1,562 units will be narrow body airplanes with 100 to 229 seats
and 572 units will be wide body airplanes with 230 or more seats, accounting for 6.9% and
5.9% of the primary deliveries, respectively.
(Fleet: airplanes which will be in service at the beginning or end of the forecast period)
(Remains: those which will be in service at the end of the period out of the initial Fleet)
(Primary retired: those which will retire during the period* out of the initial Fleet)
(Primary deliveries: those for replacement demand for primary retired airplanes and
those for new demand)
(Secondary retired: those which will retire during the period* out of the primary
deliveries)
(Secondary deliveries: those for replacement demand for secondary retired airplanes)
(* 2019-2038)
0 34173
2770
502 568 61312239
537 70
955
537 285 2807
119
2992
1748
12576
8184
5534
4129
301076
2028
519
9919
21641182
1743
284
‐2000
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20 〜 59 seats 60 〜 99 seats 100 〜 119seats
120 〜 169seats
170 〜 229seats
230 〜 309seats
310 〜 399seats
400seats
over
Passenger Jet Fleet and Delivery Forecast by Seat Category
23691750
2666
12689
592
15346
1821
3333
119406
2356
152
4742
6102
8686
1076
2038 Remains
2019‐2038 Retired (Primary)
2019‐2038 Delivery (Primary)
2038 Fleet
2019‐2038 Delivery (Secondary)
2018 Fleet
Worldwide Market Forecast 2019-2038
112
Appendix H : Changes in Cargo Transportation Results by Major Airlines (2006-2017)
This page shows the detailed version of the graph “Cargo Traffic of Lower Hold of
Passenger Airlines in Major Airlines” in Chapter 8.2, Page 65.
0
2
4
6
8
10
0 2 4 6 8 10 12 14 16
RTK
by Lower Deck Hold of Passenge
r Airplanes
(×10 9 )
RTK by Freighters (×10 9 )
Emirates Qatar Airways
Air France British Airways
Lufthansa Federal Express
Japan Airlines All Nippon Airways
Singapore Airlines Cathay Pacific Airways
China Airlines EVA Air
China Eastern Airlines China Southern Airlines
Air China Korean Air
Changes in Cargo Transportation by Major Airlines(2006-2017)
BA
Singapore
KAL
Cathay
Emirates
ANA
Qatar
AF
LH
FedEx
Source : IATA WATSJAL C.South
C.East
China AL
EVA
A.China
Worldwide Market Forecast 2019-2038
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Reference Materials
Reference Materials used in the Japan Aircraft Development Corporation, Worldwide Market Forecast
2019 - 2038
AACO Arab Air Carriers Organization
AAPA Association of Asia Pacific Airlines
ACI Airports Council International
AEA Association of European Airlines
AFRAA African Airlines Association
ALTA Latin America & Caribbean Air Transport Association
A4A Airlines for America
BTS Bureau of Transport Statistics, U.S. Department of Transportation
CAAC Civil Aviation Administration of China
DOT U.S. Department of Transportation
EIA U.S. Energy Information Administration
ERAA European Regional Airline Association
Eurocontrol European Organisation for the Safety of Air Navigation
IATA International Air Transport Association
ICAO International Civil Aviation Organization
IEA International Energy Agency
JETRO Japan External Trade Organization
MLIT Ministry of Land, Infrastructure and Transport of Japan
RAA Regional Airline Association
UN United Nations
Air Transport World AviationWeek
AviationDaily AviationWeek
Cirium Cirium
IHS Connect IHS Markit
OAG OAG Aviation Worldwide Limited
Worldwide Market Forecast 2019-2038
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This Worldwide Market Forecast 2019-2038 can be found on our website at:
http://www.jadc.jp/en/
Although this material is prepared based on various data which are believed to be
reliable under the present conditions, risk data and uncertainty factors are also included
in past performance data, and our association does not guarantee its accuracy and
completeness in any way.
We are not responsible for the decisions, acts and results of users based on this material.
Please make your decision on your own responsibility when using it.
In addition, when copying the whole or part of this material, permission of the copyright
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Contact details:
Market Analysis Group
Japan Aircraft Development Corporation
Naohiko Ito ([email protected])
Postal address:
Hibiya Kokusai Bldg. 7F
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Fax: Tokyo (03) 3504-0368 (+81-3-3504-0368)