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© AIRBUS all rights reserved. Confidential and proprietary document.
Global Market Forecast Drivers & Results
Global Market Forecast 2014-2033 Presented by: Andrew Gordon
Director Strategic Marketing & Analysis
Airbus GMF14 - Flying on Demand September 14
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Aviation’s benefit -
23 minutes
2 hours
4 – 12 hours
20 hours
The first commercial flight was 100 years ago
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Oil Crisis Oil Crisis Gulf Crisis AsianCrisis 9/11 SARS
73%
Financial Crisis
September 14
Air travel has proved to be resilient to external shocks
Source: ICAO, Airbus
73% growth through multiple crises over the last ten years
World annual traffic (RPKs - trillions)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1968 1973 1978 1983 1988 1993 1998 2003 2008 2013
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0
5
10
15
20
25
1980 1985 1990 1995 2000 2005 2010
World inflation adjusted average yield stabilising after strong decrease in the 80s and the 90s
Cents per RPK in 2013 US$
Source: ICAO, IATA, Airbus
Fairly stable
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More movements, more connectivity….
Source: OAG, Airbus
Airport movements Airport connectivity
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
Avg. number of movements per airport Avg. number of destinations per airport
0
2
4
6
8
10
12
14
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
x2.4 x1.8
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More seats, more seats filled…
Source: OAG, Ascend, Airbus
Offered seats per aircraft
0
50
100
150
200
250
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
Avg. number of offered seats per aircraft (000)
50%
55%
60%
65%
70%
75%
80%
85%
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
World passenger load factors (%)
Source: ICAO, OAG, Airbus
Load factors
+17.4 percentage
points
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Less fuel burn, therefore less emissions…
Source: ICAO, IATA, Airbus
Fuel consumption CO2 emissions
0
20
40
60
80
100
120
2000 2002 2004 2006 2008 2010 2012
Kilograms per passenger per trip (avg.) Kilograms per passenger per trip (avg.)
0
50
100
150
200
250
300
350
2000 2002 2004 2006 2008 2010 2012
-31% -31%
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High oil prices here for the long term…
Source: IHS Global Insight Energy, Airbus
* Currency in nominal terms
Brent oil price (nominal US$ per bbl)
0
20
40
60
80
100
120
140
160
180
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Forecast History
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-4%
-2%
0%
2%
4%
6%
8%
J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N-4%
-2%
0%
2%
4%
6%
8%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
World real GDPWorld passenger traffic (ASKs)
Passenger traffic is outperforming GDP growth
% (year-over-year)
2008 2009 2010 2011 2012 2013 2014
World real GDP and passenger traffic
Source: IHS Global Insight, OAG, Airbus
+5.6%
August 2014 Passenger Traffic
September 14
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-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Underlying drivers indicate a positive economic outlook
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Year-over-year quarterly evolution (%)
Source: IHS Global Insight, Airbus * Values corrected for inflation
World GDP*
Page 10 September 14
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The World of 2033 will be very different from today
September 14 Airbus GMF14 - Flying on Demand
1- US 2- China 3- Japan 4- Germany 5- France 6- UK 7- Brazil 8- Russia 9- Italy 10- India
Source: IHS Global Insight, Airbus
1- China 2- US 3- India 4- Japan 5- Germany 6- UK 7- France 8- Brazil 9- Russia 10- Italy
1- China 2- US 3- India 4- Japan 5- Brazil 6- Germany 7- UK 8- Russia 9- France 10- Indonesia
GDP ranking based on nominal GDP expressed in US$
2013 2023 2033
Page 11
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A two-speed economic world
* 54 emerging economies
** 32 advanced economies
Source: IHS Global Insight, Airbus
Comparison of year-over-year GDP growth
-4%
-2%
0%
2%
4%
6%
8%
10%
1982 1986 1990 1994 1998 2002 2006 2010 2014 2018
Emerging economies*
Real GDP growth (%) History Forecast Emerging economies will continue to lead the pack
Advanced economies**
Page 12 September 14
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Diverse emerging economies spread across the globe
September 14
Source: IHS Global Insight, Airbus
Emerging economies (54 countries) All other countries (150 countries)
Page 13
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Emerging economies are driving future growth
Source: IHS Global Insight, Airbus
* Nominal GDP in US$
2033
Today
Emerging economies (54 countries) All other countries (150 countries)
54% 67% 59% 50%
36% 69% 42% 38%
Page 14
GDP Population Passengers trips
In-service fleet
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Emerging regions will account for the largest share of origin and destination traffic worldwide
Source: ICAO, Sabre GDD, Airbus GMF
0
2
4
6
8
10
12
14
16
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
World annual RPK (trillion)
2.6% p.a. Advanced – Advanced
5.0% p.a. Emerging – Advanced
6.8% p.a. Emerging – Emerging
Airbus GMF 2014
ICAO total traffic
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Air transport growth is highest in expanding regions
Billions of people will increasingly want to travel by air
China India Middle East Asia Africa CIS Latin America Eastern Europe
Western Europe North America Japan
Yearly RPK growth 2014 - 2033
1 billion
people 2014
6.2 billion
people 2014
Em
ergi
ng/D
evel
opin
g A
dvan
ced
+6.0 %
+4.2 %
Page 16 September 14
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Urbanisation to increase
49%
60%
67%
0%
10%
20%
30%
40%
50%
60%
70%
80%
-
1
2
3
4
5
6
7
8
9
10
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
RuralUrbanUrban share
billion History Forecast
Urban population: 1.3B 2.3B 3.5B 5.0B 6.4B
World population and share of urban agglomeration evolution
Source: UN population division, Airbus
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Global Middle Class to more than double
679 697 673 264 261 252
1,413
2,782
4,450
0
1,000
2,000
3,000
4,000
5,000
2013* 2023 2033
Global Middle Class** (Millions of people)
Emerging countries
World Population
% of world population
8,500
63%
7,900
48%
7,200
33% Source: Kharas and Gertz, Airbus * EOY 2013 ** Households with daily expenditures between $10 and $100 per person (at PPP)
3,740
2,356
5,375
North America Europe
September 14 Airbus GMF14 - Flying on Demand
Page 18
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0.01
0.10
1.00
10.00
0 10 20 30 40 50 60
2013 trips per capita
North Americans and Europeans are the most willing to fly today…
Source: Sabre (annualized September 2013 data), IHS Global Insight, Airbus |
*Passengers originating from respective country
Bubble size proportional to population
2013 GDP per capita (thousands $US)
Europe ~1 trip per capita
North America 1.6 trips per capita
China 0.25 trips per capita
India 0.06 trips per capita
22% of the population of the emerging countries took a trip a year in 2013
September 14 Airbus GMF14 - Flying on Demand
Page 19
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0.01
0.10
1.00
10.00
0 10 20 30 40 50 60
…but by 2033, China’s potential will reach European levels
Source: Sabre (annualized September 2013 data), IHS Global Insight, Airbus |
*Passengers originating from respective country
Bubble size proportional to population
66% of the population of the emerging countries will take a trip a year in 2033
2033 trips per capita
2033 GDP per capita (thousands $US)
India 2033 0.26 trips per capita
China 2033 0.95 trips per capita
September 14 Airbus GMF14 - Flying on Demand
Page 20
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International tourist arrivals expected to reach 1.6 billion people by 2020
Source: World Tourism Organization, Airbus
1.6 billion tourists arrivals expected by 2020
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1995 2000 2005 2010 2015 2020
International tourist arrivals (million) Forecast History
47%
Page 21
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Tourism stimulates economic and air transport growth
September 14
Source: World Tourism Organization, OAG, IHS Global Insight, Airbus
0%2%4%6%8%
10%12%14%16%18%20%
0% 2% 4% 6% 8% 10% 12% 14%
International tourist arrivals (CAGR* 1995-2012)
Real GDP (CAGR* 1995-2012)
* Compound Annual Growth Rate
Economic growth catalyst
0%2%4%6%8%
10%12%14%16%18%20%
0% 2% 4% 6% 8% 10% 12% 14%
International tourist arrivals (CAGR* 1995-2012)
ASKs (CAGR* 1995-2012)
Air transport growth catalyst
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International students have taken advantages of increased mobility
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1975 1980 1985 1990 1995 2000 2005 2009
International students (Thousands) International Students / World population ratio (Base 1 in 1975)
Source: OECD, UN Population Division, Airbus
Number of international students and share of World Population
Page 24
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Long-haul traffic grows stronger than short haul traffic
Source: OAG
* Long haul traffic: flight distance >2,000nm
Evolution of long-haul vs short-haul traffic (ASKs), 1973-2013, (Base 100 in 1973)
0
100
200
300
400
500
600
700
800
900
1000
1973 1978 1983 1988 1993 1998 2003 2008 2013
Since 1973, Long-haul traffic has
grown 1% per year faster than short-haul traffic
x6.2
Short-haul traffic
x9.1
Long-haul traffic
Page 25
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42 Aviation Mega-Cities in 2013
• >50 000 daily long-haul passengers
• >20 000 daily long-haul passengers
• >10 000 daily long-haul passengers
2013 Aviation Mega-Cities
42 Aviation
Mega-cities
Source: McKinsey, UNPD, Airbus GMF
0.8M Daily Passengers: Long Haul traffic to/ from/via Mega
Cities
90%+ of long-haul
traffic on routes to/from/via 42 cities
22% of World
GDP in 2013
Page 27 September 14
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Larger aircraft will help Aviation mega-cities and their airports grow and prosper
*Aviation Mega-Cities International Airports
IATA WSG level 1: airport infrastructure is adequate
IATA WSG level 2: airports with potential for congestion
IATA WSG level 3: airports where conditions make it impossible to meet demand
2013 Aviation Mega-Cities*
Source: IATA WSG database, Airbus GMF
On the 42 Aviation Mega-Cities’ airports in 2013, 36 have scheduling constrained today
Page 28
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The bigger the city, the wealthier the population 2013 Aviation Mega-Cities and 2013 GDP per capita (real 2010 $US, thousands)
0
20
40
60
AMC Otherlargecities
Region
North America (12 AMC)
05
10152025
AMC Otherlargecities
Region 0
5
10
15
AMC Otherlargecities
Region
0
20
40
60
AMC Otherlargecities
Region 010203040
AMC Otherlargecities
Region
0
10
20
30
AMC Otherlargecities
Region
010203040
AMC Otherlargecities
Region
Latin America (2 AMC)
Europe (9 AMC)
Africa (1 AMC)
Middle East (4 AMC)
CIS (1 AMC)
Asia-Pacific (13 AMC)
GDP per capita in Aviation mega-cities
x4 vs. World average
Source: McKinsey, UNPD, IHS Global Insight, Airbus GMF
Other large cities: urban agglomerations with a population above 300,000 people
Page 29
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Routes between Aviation Mega-cities have higher percentages of premium pax
Percentage of premium passengers between AMCs
13%
0%
2%
4%
6%
8%
10%
12%
14%
Aviation Mega-City to AviationMega-City
Aviation Mega-City <>Secondary City
Secondary City to SecondaryCity
Percentage of premium passengers on route types Based on 2012 Aviation Mega-Cities
Source: SABRE, Airbus Market Research and Forecasts| Cities with more than 10,000 daily passengers, Long-haul traffic: flight distance >2,000nm, excl. domestic traffic
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… and 91 Mega-Cities by 2033
• >50 000 daily long-haul passengers
• >20 000 daily long-haul passengers
• >10 000 daily long-haul passengers
2033 Aviation Mega-Cities
Source: McKinsey, UNPD, Airbus GMF
91 Aviation
Mega-cities
2.2M Daily Passengers: Long Haul traffic to/ from/via Mega
Cities
95%+ of long-haul
traffic on routes to/from/via 91 cities
35% of World
GDP in 2013
Page 31 September 14
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Airbus Global Market Forecast
September 14 Airbus GMF14 - Flying on Demand
A 20 year aircraft demand and passenger traffic forecast
Airlines • Business Models • Operations • Competition • Geopolitics
Trends Analysis • Consumer & Travel
Surveys • Tourism • Migration • Traffic flows • Passenger demands
Governments & Regulators
• Liberalization/ deregulation • Investments and
constraints • Geopolitics
Market Research
Network Development • Route planning • Origin and destination
demand • Population centers
Traffic • Economics and
Econometrics • Fuel costs • Yields • Load Factors • Trade and Value of Goods
Fleet trends • Aircraft economics • Utilization • Fleet age and retirements
Forecast
Page 32
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Air traffic will double in the next 15 years
Source: ICAO, Airbus GMF 2014
0
2
4
6
8
10
12
14
16
1973 1978 1983 1988 1993 1998 2003 2008 2013 2018 2023 2028 2033
World annual RPK* (trillion) Airbus GMF 2014
ICAO total traffic
4.7%
2013-2033
Page 33 September 14
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Domestic PRC to become number one within 10 years
* 20-year annual growth rate (CAGR) Source: Airbus GMF
- 500 1,000 1,500 2,000
Sub Sahara Africa - Western EuropeAsia Advanced - Asia Emerging
Asia Emerging - Middle EastIndian Sub-Continent - USA
Central Europe - Western EuropeAsia Emerging - PRCSouth America - USA
Western Europe - South AmericaPRC - USA
Western Europe - PRCDomestic Brazil
Western Europe - Middle EastIndian Sub-Continent - Middle East
Domestic IndiaAsia Emerging - Western Europe
Domestic Asia EmergingWestern Europe - USA
Intra Western EuropeDomestic USADomestic PRC
Billion RPKs 20-year annual growth* 7.1% 1.9% 2.9% 2.9% 6.9% 4.0% 9.5% 6.8% 4.6% 6.0% 5.6% 6.6% 4.3% 5.3% 7.5% 5.4% 6.4% 6.8% 5.6% 4.3%
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Domestic PRC to become number one within 10 years
* 20-year annual growth rate (CAGR) Source: Airbus GMF 2014
- 500 1,000 1,500 2,000
Domestic USAIntra Western Europe
Western Europe - USAAsia Emerging - Western EuropeWestern Europe - South America
Sub Sahara Africa - Western EuropeWestern Europe - Middle East
South America - USACentral Europe - Western Europe
Western Europe - PRCAsia Advanced - Asia Emerging
Domestic BrazilIndian Sub-Continent - USA
PRC - USAAsia Emerging - Middle East
Indian Sub-Continent - Middle EastDomestic Asia Emerging
Domestic PRCAsia Emerging - PRC
Domestic India
20132033
2013 – 2033 Billion RPK 20-year annual growth* 9.5% 7.5% 7.1% 6.9% 6.8% 6.8% 6.6% 6.4% 6.0% 5.6% 5.6% 5.4% 5.3% 4.6% 4.3% 4.3% 4.0% 2.9% 2.9% 1.9%
Page 35 September 14
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Asia-Pacific to lead in world traffic by 2033
Source: Airbus GMF 2014
RPK traffic by airline domicile (billions)
0 1,000 2,000 3,000 4,000 5,000
Asia-Pacific
Europe
North America
Middle East
Latin America
CIS
Africa
30%
25%
24%
8%
5%
4%
3%
5.7%
3.6%
2.9%
7.1%
5.4%
5.4%
4.7%
% of 2013 world RPK
20-year growth
36%
20%
17%
13%
6%
5%
3%
% of 2033 world RPK
2013 traffic 2014-2033 traffic
20-year world annual traffic growth
4.7%
Page 36 September 14
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Global Market Forecast 2014: Highlights GMF 2014 key numbers and 20-year change
World Fleet Forecast 2013 2033 % change 2013-2033
RPK (trillion) 5.8 14.6 151%
Passenger Aircraft Fleet 16,855 34,818 107%
New passenger aircraft deliveries 30,555
Dedicated Freighters 1,605 2,645 65%
New freighter aircraft deliveries 803
Passenger aircraft (≥ 100 seats)
Jet freight aircraft (>10 tons)
Source: Airbus GMF
New aircraft deliveries - +2,132 aircraft GMF 2014 vs. GMF 2013
Total New Aircraft Deliveries 31,358
Page 37 September 14
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Single-aisle: 70% of units; Wide-bodies: 55% of value
Passenger aircraft (≥ 100 seats) and jet freight aircraft (>10 tons)
Source: Airbus
31,400 New Deliveries GMF 2014 -2033
0
4,000
8,000
12,000
16,000
20,000
24,000
Single-aisle Twin-aisle Very Large Aircraft
1,500
7,800
22,100
70% 25% 5% % units
45% 44% 11% % value
20-year new deliveries of passenger and freighter aircraft
Page 38 September 14
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31,400 New
aircraft
6,100
12,400
19,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Beginning 2014 2033
Demand for around 31,400 new aircraft
Stay in service
Replacement
Growth
Source: Airbus
Note: Passenger aircraft ≥100 seats, Freighter aircraft ≥10 tonnes
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Fleet in service evolution; 2014-2033
18,500
37,500
Page 39 September 14
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…to estimate global demand
Source: GMF 2013
Worldwide Demand - Single-aisle:
22,071 Twin-aisle & VLA:
9,287
20-year demand by category
North America
Latin America
Africa
Europe CIS
Middle East
Asia Pacific
Aircraft Demand
Single-aisle
Twin-aisle/ VLA
Total aircraft
5,871
2,242
2,294
6,253
1,241
985
12,472
Page 40
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Airbus backlog well aligned with demand forecast
Source: Airbus, Airbus GMF
As at end August 2014
Total backlog includes undisclosed
Airbus backlog - 5,892 aircraft
Page 41 September 14
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Summary
• Strong growth in passenger traffic – resilient growth through a difficult, but improving economic period
• Demand for 31,400 new aircraft by 2033 – ~30,600 passenger aircraft and nearly 800
freighter aircraft
• Replacement of ageing fleets – 20 year demand for 12,400 passenger aircraft for replacement, largely in the single-aisle segment
• Single-aisle aircraft represent 70% of demand in units, but wide-body aircraft represent 55% of value
• VLA demand driven by aviation mega-cities – more than 95%+ of all long-haul passengers will fly to, from or through 91 aviation mega-cities by 2033
Page 42 September 14