March 23rd 2016
Bob Lange
Head of Market and Product Strategy
The Market
Long and Short-term Outlook
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Market Research & Forecasts
November 2014
Global Market Forecast 2015: Highlights
GMF 2015 key numbers and 20-year change
World Fleet Forecast
2014
2034
% change
2014-2034
RPK (trillions)
6.2
15.2
145%
New aircraft deliveries
-
+1,227 aircraft
GMF 2015 vs. GMF 2014
Passenger Aircraft Fleet
17,354
New passenger aircraft
deliveries
Dedicated Freighters
New freighter aircraft
deliveries
Total New Aircraft Deliveries
35,749
106%
31,781
1,633
2,687
65%
804
32,585
Passenger aircraft (≥ 100 seats)
Jet freight aircraft (>10 tons)
Source: Airbus GMF
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20-year demand for 32,600 new passenger and freight aircraft
20-year new deliveries of passenger and freighter aircraft
Market Value of
22,930 single-aisle aircraft
-
$4.9
8,110 twin-aisle aircraft
trillion
1,550 very large aircraft
32,590 new aircraft
Passenger aircraft (≥ 100 seats)
Jet freight aircraft (>10 tons)
Source: Airbus GMF
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Single-aisle: 70% of units; Wide-bodies: 55% of value
20-year new deliveries of passenger and freighter aircraft
24,000
22,900
New Deliveries
-
20,000
16,000
32,600
12,000
GMF 2015 -2034
8,100
8,000
4,000
1,600
0
% units
% value
Single-aisle
Twin-aisle
Very Large Aircraft
70%
25%
5%
45%
43%
12%
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Passenger aircraft (≥ 100 seats) and
jet freight aircraft (>10 tons)
Source: Airbus GMF
Emerging/
Developing
China
India
Middle East
Asia
Africa
CIS
Latin America
Eastern Europe
Advanced
Air transport growth is highest in expanding regions
Western Europe
North America
Japan
Source: IHS Economics, Airbus GMF
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6.2
billion
people
2014
1
billion
people
2014
Yearly RPK growth
2015 - 2034
+5.8 %
+3.8 %
Middle Class to grow, doubling in emerging countries…
Middle Class*, millions of people
History
Forecast
5,000
2,703
3,000
1,792
2,000
1,176
0
Emerging countries
3,671
4,000
1,000
4,721
3,977
2,936
2,001
North America
1,120
558
227
391
247
425
259
444
263
471
264
480
1994e
2004
2014
2024
2034
5,600
6,400
7,200
8,000
8,600
World Population
21%
28%
37%
46%
55%
% of world population
Source: Oxford Economics, Kharas (Brookings 2012) Airbus GMF
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Europe
* Households with yearly income between $20,000 and $150,000 at PPP in constant 2014 prices
** Estimate for 1994 split by region
Europeans and Americans fly most today…
2014 trips per capita
Propensity to
travel
100.00
-
10.00
25%
of emerging
countries
population took a
trip a year in
1.00
North America
1.63 trips per capita
Europe
1.21 trips per capita
0.10
PRC
0.30 trips per capita
2014
India
0.07 trips per capita
0.01
0.00
0
10
20
30
40
50
60
70
80
90
100
2014 real GDP per capita
(2010 $US thousands at Purchasing Power Parity)
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Sources: Sabre, IHS Economics, Airbus GMF
…but by 2034, PRC will reach current European levels
2034 trips per capita
Propensity to
travel
100.00
-
10.00
74%
1.00
Europe
2.24 trips per capita
of emerging
countries
population will take
a trip a year in
North America
2.16 trips per capita
PRC
1.09 trips per capita
0.10
India
0.30 trips per capita
2034
0.01
0.00
0
10
20
30
40
50
60
70
80
90
100
2014 real GDP per capita
(2010 $US thousands at Purchasing Power Parity)
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Sources: Sabre, IHS Economics, Airbus GMF
Air traffic will double in 15 years
World annual RPK* (trillion)
ICAO total traffic
Airbus GMF 2015
16
14
12
10
x2
8
6
2014-2034
4
4.6%
2
0
1974
1979
1984
1989
1994
1999
2004
2009
2014
2019
2024
2029
2034
Source: ICAO, Airbus GMF2015
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Significant potential for LCCs to increase traffic to other regions
LCC market share (seats offered) in 2014 per global region
In Europe
60%
-
Domestic: traffic within countries
50%
Intraregional: traffic between countries
49%
International: traffic to other regions
LCCs capture
40%
49% of
40%
38%
30%
intra-regional
traffic
30%
24%
20%
21% 20%
20%
10%
13%
9%
4%
0%
Europe
Middle East
7%
Asia-Pacific
6%
North America
6%
3%
Latin America
Source: OAG (September data), Airbus
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70% of traffic growth until 2034 will be coming from existing network
1.5
Monthly Trillion RPK
Growth from
new routes
1.2
0.9
Growth from
existing network
0.6
0.3
0.0
2014
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2034
Source: Airbus GMF2015
47 Aviation Mega-Cities in 2014
2014 Aviation Mega-Cities
47
Aviation
Mega-cities
0.9M
90%+
Daily Passengers:
long-haul traffic to/
from/via MegaCities
of long-haul traffic
on routes
to/from/via
47 cities
22%
of World
GDP
in 2014
Source: McKinsey, UNPD, Airbus GMF2015
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•
•
•
>50 000 daily long-haul passengers
>20 000 daily long-haul passengers
>10 000 daily long-haul passengers
… and 91 Mega-Cities in 2034
2034 Aviation Mega-Cities
91
Aviation
Mega-cities
2.3M
95%+
Daily Passengers:
Long-Haul traffic
to/ from/via MegaCities
of long-haul traffic
on routes
to/from/via
91 cities
35%
of World
GDP
in 2034
Source: McKinsey, UNPD, Airbus GMF2015
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•
•
•
>50 000 daily long-haul passengers
>20 000 daily long-haul passengers
>10 000 daily long-haul passengers
Routes between Aviation Mega-cities have more premium passengers
Percentage of premium passengers on routes types
Percentage of
premium
between AMC
2014
16%
14%
12%
14%
10%
8%
14%
6%
10%
8%
4%
compared to 11%
average
international longhaul
2%
0%
Aviation Mega-City to Aviation
Mega-City
Cities with more than 10,000 daily passengers, Long-haul, flight
distance >2,000nm, excl. domestic traffic
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Aviation Mega-City <>
Secondary City
Secondary City to Secondary
City
Source: Sabre (September 2014 data),
Airbus GMF2015
These airports are already largely congested
2014 Aviation Mega-Cities
39 out of the
47 Aviation
Mega Cities are
scheduleconstrained
today
*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
Source: IATA WSG database, Airbus GMF
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where conditions make it
impossible to meet demand
Asia-Pacific to lead in world traffic by 2034
RPK traffic by airline domicile (billions)
% of 2014
20-year
growth
29%
5.7%
36%
Europe
25%
3.6%
21%
North America
25%
2.5%
17%
Middle East
9%
6.7%
13%
5%
5.2%
6%
4%
4.9%
4%
3%
5.3%
3%
0
Asia-Pacific
1,000
2014 traffic
Latin America
CIS
Africa
2,000
3,000
4,000
5,000
2015-2034 traffic
20-year
world annual
traffic growth
4.6%
6,000 world RPK
% of 2034
world RPK
Source: Airbus GMF2015
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Demand for some 32,600 new passenger and freighter aircraft
Fleet in service evolution: 2015-2034
38,500
40,000
35,000
30,000
19,500
Growth
25,000
20,000
32,600
New
aircraft
19,000
15,000
13,100
10,000
Replacement
5,000
5,900
Stay in service
0
Beginning 2015
2034
Source: Airbus
Note: Passenger aircraft ≥100 seats,
Freighter aircraft ≥10 tonnes
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Regional breakdown of 32,600 new passenger and freighter deliveries
Europe
North America
CIS
1,310
Middle East
Asia-Pacific
6,450
5,880
Africa
Latin America
2,460
20-YEAR NEW DELIVERIES
1,130
SINGLE-AISLE
22,920
TWIN-AISLE & VLA
9,660
2,540
12,810
Source: Airbus GMF
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Airbus backlog well aligned with demand forecast
Airbus backlog and GMF demand forecast by region
Europe
& CIS
18%
North
America
9%
24%
17%
Middle
East
6%
Lessors
20%
Latin
America
6%
Africa
1%
8%
3%
7%
AsiaPacific
29%
39%
Source: Airbus GMF2015
values as at end December 2015
Total backlog includes undisclosed
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The short term - what’s hot today?
Emerging economies
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Oil price
Cycle - Orders, deliveries…
Air travel has proven to be resilient to external shocks
World annual traffic (RPKs - trillions)
Oil Crisis
Oil Crisis
Gulf Crisis
7
Asian
Crisis
9/11 SARS
Financial
Crisis
World traffic
-
98%
6
5
98%
growth since 9/11
4
3
2
1
0
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Source: ICAO, Airbus
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World GDP Growth
+2.5%
Market
-
Over
Passenger Traffic (RPKs)
+6.5%
Capacity (ASKs)
+5.6%
3.5bn
passengers
in 2015
2016 outlook
3.8bn
passengers
Load Factor +0.6 percentage point
Reaching record levels: world average. 80.3%
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Source: IATA members traffic for 2015
published February 4th, 2016
March 16
Passenger traffic is outperforming GDP growth
World real GDP and passenger traffic
February 2016
Passenger Traffic
+6.5%
% (year-over-year)
8%
6%
4%
2%
0%
World real GDP
World passenger traffic (ASKs)
-2%
-4%
JQ1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N
2008
2009
Source: IHS Economics, OAG, Airbus
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2010
2011
2012
2013
2014
2015
2016
Asia-Pacific and other emerging markets are leading traffic growth
ASKs year-over-year monthly evolution
Asia - Pacific Traffic
+8.9%
% (year-over-year)
16%
Emerging Markets Traffic
+8%
12%
Western Europe Traffic
8%
+6.4%
4%
US Traffic
0%
+4.1%
-4%
-8%
-12%
J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N J MM J S N
2009
2010
Source: OAG, Airbus
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2011
2012
2013
2014
2015
2016
Emerging economies are a global phenomenon
World map of emerging countries
Source: IHS Global Insight, Airbus
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Emerging markets accounting for a growing share of the world economy
Emerging markets* as a share of world economy (%)
History
50%
Almost half
Forecast
45%
40%
35%
30%
1/3rd
25%
20%
1/4th
15%
10%
5%
0%
2000
Source: IHS Economics, Airbus
2005
2010
2015
2020
2025
2030
2035
* 54 emerging economies
Emerging markets economic growth rate tapers but added volume remains
impressive and is expected to rebound
9%
8%
7%
Forecast
History
Growth(%)
Emerging
economies* real
GDP growth
Volume (billion 2010$)
Emerging
economies* added
economic volume
6%
3,000
Emerging markets
2,500
added economic
volume in 2015
corresponds to the
size of their
economy in 1982
2,000
5%
1,500
-
4%
3%
1,000
2%
500
1%
0%
0
1995
2000
2005
Source: IHS Economics, Airbus
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2010
2015
2020
2025
2030
2035
2040
* 54 emerging economies
Each year, deliveries represent on average 7% of the in service fleet
Yearly deliveries of aircraft above 100 seats
Deliveries as % of fleet
12%
1,800
1,600
10%
1,400
1,200
8%
1,000
6%
800
600
4%
400
2%
200
0
0%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: Airbus analysis from ASCEND
database
Aircraft >= 100 seats
Top three airline costs – Fuel, Ownership, Maintenance
Distribution of Total Airline Cost – FY 2014
@ $2.7/USg
Source: IATA ACMG, FY ‘13
Past data show no correlation between oil price and aircraft retirement age
Brent oil price (nominal US$ per bbl)
Aircraft* Half-Life
120
35
100
30
SA
25
80
20
WB
60
15
40
10
20
5
-
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: ASCEND, Airbus, IHS Energy
Passenger aircraft (>100 seats)
*A/C age when 50% of delivered
aircraft are still in service)
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No clear trend in survival curves over the last 5 years
Attrition Curves based on SA fleet in service
Share of delivered a/c still in service
100%
Avg. yearly oil price
2014@ $99per barrel
Attrition Curves based on WB fleet in service
Share of delivered a/c still in service
100%
Avg. yearly oil price
2014@ $99per barrel
90%
2013@1$09 per barrel
90%
80%
2012@$115 per barrel
80%
2012@$115 per barrel
70%
2011@ $114 per barrel
60%
60%
2010@ $85 per barrel
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
2013@1$09 per barrel
2011@ $114 per barrel
70%
2010@ $85 per barrel
0%
0%
0
2
4
6
8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 AC Age
Source: Ascend
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0
2
4
6
8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 AC Age
Short to medium term oil price forecasts have been revised down
160
Oil prices
Forecast
History
Brent oil price (US$)
-
In the long-run,
growing oil demand
and limited reserves
will bring prices
back to their trend
levels.
140
Current US$
120
2015 US$
100
80
60
40
20
0
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
Source: IHS Energy (Feb. 2016), Airbus
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Lower fuel prices bolstering the bottom line
20%
EBIT margin (%)
US AIRLINES
EUROPEAN AIRLINES
(sample representing 20% of world traffic)
(sample representing 15% of world traffic)
20%
15%
15%
10%
10%
5%
5%
EBIT margin (%)
0%
0%
2012
2014
-5%
2013
2015
2012
2014
-5%
-10%
-10%
Q1
Q2
Q3
Q1
Q4
Q2
EMERGING MARKETS AIRLINES
20%
2013
2015
EBIT margin (%)
Q4
AIRLINES WORLDWIDE
(sample representing 15% of world traffic)
20%
15%
15%
10%
10%
5%
5%
0%
Q3
EBIT margin (%)
(sample representing 60% of world traffic)
0%
2012
2014
-5%
2013
2015
-10%
2012
2014
-5%
2013
2015
-10%
Q1
Source: The Airline Analyst, Airbus
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Q2
Q3
Q4
Q1
Q2
Q3
Q4
Backlog and delivery ratio above 10:1 in 2015
Airbus backlog
Airbus deliveries
(scale 1/5 x backlog)
1200
6000
1000
5000
800
4000
600
3000
2000
400
1000
200
0
0
1990
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1995
2000
2005
2010
2015
2020
Backlog and delivery ratio at 7:1 in 2020, A320 at rate 60 from mid 2019
Airbus backlog
Airbus deliveries
(scale 1/5 x backlog)
1200
6000
1000
5000
800
4000
600
3000
2000
400
1000
200
0
0
1990
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1995
2000
2005
2010
2015
2020
Backlog x 2.7 since 2006 – Cancellations within historic bounds
Swaps A320-A330ceo/neo
6386
Cancellations
5559
Backlog
4437
3421
6831
3715
3488
4682
3552
2533
2%
5%
4%
2006
2007
2008
1%
2%
5%
2%
2009
2010
2011
2012
2% +1%
2013
4% +2%
2014
1% +1%
2015
% Swaps ceo to neo
% Cancellations year N / Backlog year N-1
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22/03/2016
Productivity
Productivity increasing, stored aircraft around historical low
6%
ASKs per aircraft in service year-over-year monthly evolution (%)
4%
Single-Aisle
2%
+0.5%
+0.2%
0%
Twin-Aisle
+ VLA
-2%
-4%
J M M J S N J M M J S N J M M J S N J M M J S N
2013
2,000
2014
2016
Number of aircraft stored at end of the period
New
Stored
Aircraft
2015
Mid
Old
Share of fleet (%)
20%
Share
1,600
16%
1,200
12%
800
8%
400
4%
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 J F M A M J
2014
* Western-built passenger aircraft ≥100 seats
Source: Ascend, OAG, Airbus
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2015
2016
Indicators remain encouraging
Indicator
Status
Trend
Comment
Economy
- World economy not expected to emerge from its soft patch of the last three years
- Oil prices remaining at relatively low levels
Passenger traffic
- Strong passenger traffic growth in 2015 and in early 2016, especially for
airlines from emerging markets
- Load factors holding at record high levels
Freight traffic
- Freight traffic recovery “on hold”
Finance
- Interest rates still at low levels
Aircraft
- Stored aircraft remaining at low levels
- Passenger aircraft productivity continues to improve
Airlines
- Record airline profitability in 2015, especially for airlines with no fuel hedging
positions (e.g. airlines in North America)
Traffic light code: Green: Positive, Amber: concerns, Red: Negative
Trend indication: : unchanged, : improving, : getting worse
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