March 23 2016 - Airbus · 2018-03-16 · The Market Long and Short-term Outlook March 23rd 2016 ....

© AIRBUS all rights reserved. Confidential and proprietary document. © AIRBUS all rights reserved. Confidential and proprietary document. November 2014 Market Research & Forecasts

The Market Long and Short-term Outlook

March 23rd 2016 Bob Lange

Head of Market and Product Strategy

© AIRBUS all rights reserved. Confidential and proprietary document.

Global Market Forecast 2015: Highlights

Passenger aircraft (≥ 100 seats)

Jet freight aircraft (>10 tons)

Source: Airbus GMF

GMF 2015 key numbers and 20-year change

World Fleet Forecast 2014 2034 % change 2014-2034

RPK (trillions) 6.2 15.2 145%

Passenger Aircraft Fleet 17,354 35,749 106%

New passenger aircraft deliveries 31,781

Dedicated Freighters 1,633 2,687 65%

New freighter aircraft deliveries 804

Total New Aircraft Deliveries 32,585

New aircraft deliveries - +1,227 aircraft GMF 2015 vs. GMF 2014


20-year demand for 32,600 new passenger and freight aircraft

Passenger aircraft (≥ 100 seats)

Jet freight aircraft (>10 tons)

Source: Airbus GMF

Market Value of - $4.9 trillion

22,930 single-aisle aircraft

8,110 twin-aisle aircraft

1,550 very large aircraft

32,590 new aircraft

20-year new deliveries of passenger and freighter aircraft


Single-aisle: 70% of units; Wide-bodies: 55% of value

Passenger aircraft (≥ 100 seats) and jet freight aircraft (>10 tons)

Source: Airbus GMF

New Deliveries - 32,600 GMF 2015 -2034

0

4,000

8,000

12,000

16,000

20,000

24,000

Single-aisle Twin-aisle Very Large Aircraft

1,600

8,100

22,900

70% 25% 5% % units

45% 43% 12% % value

20-year new deliveries of passenger and freighter aircraft


Air transport growth is highest in expanding regions

China India Middle East Asia Africa CIS Latin America Eastern Europe

6.2 billion

people 2014

Western Europe North America Japan

Yearly RPK growth 2015 - 2034

+5.8 %

+3.8 % 1 billion

people 2014 Ad

vanc

ed

Emer

ging

/ D

evel

opin

g

Source: IHS Economics, Airbus GMF


Middle Class to grow, doubling in emerging countries…

Source: Oxford Economics, Kharas (Brookings 2012) Airbus GMF * Households with yearly income between $20,000 and $150,000 at PPP in constant 2014 prices ** Estimate for 1994 split by region

391 425 444 471 480 227 247 259 263 264 558

1,120 2,001

2,936 3,977

0

1,000

2,000

3,000

4,000

5,000

1994e 2004 2014 2024 2034

History Forecast

Europe

North America

Emerging countries

Middle Class*, millions of people

8,600 World Population 8,000 7,200 6,400 5,600 55% % of world population 46% 37% 28% 21%

2,703

1,792

3,671

4,721

1,176


0.00

0.01

0.10

1.00

10.00

100.00

0 10 20 30 40 50 60 70 80 90 100

Europeans and Americans fly most today…

2014 real GDP per capita (2010 $US thousands at Purchasing Power Parity)

Propensity to travel - 25% of emerging countries population took a trip a year in 2014

Sources: Sabre, IHS Economics, Airbus GMF

India 0.07 trips per capita

PRC 0.30 trips per capita

North America 1.63 trips per capita Europe

1.21 trips per capita

2014 trips per capita


0.00

0.01

0.10

1.00

10.00

100.00

0 10 20 30 40 50 60 70 80 90 100

…but by 2034, PRC will reach current European levels

2014 real GDP per capita (2010 $US thousands at Purchasing Power Parity)

Propensity to travel - 74% of emerging countries population will take a trip a year in 2034

India 0.30 trips per capita

PRC 1.09 trips per capita

2034 trips per capita

Sources: Sabre, IHS Economics, Airbus GMF

Europe 2.24 trips per capita

North America 2.16 trips per capita


0

2

4

6

8

10

12

14

16

1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 2024 2029 2034

Air traffic will double in 15 years

Source: ICAO, Airbus GMF2015

World annual RPK* (trillion) Airbus GMF 2015 ICAO total traffic

2014-2034

4.6%

x2


38%

21% 24%

30%

40%

49%

20% 20%

13%

6% 9%

4% 7% 6% 3% 0%

10%

20%

30%

40%

50%

60%

Europe Middle East Asia-Pacific North America Latin America

Domestic: traffic within countries

Intraregional: traffic between countries

International: traffic to other regions

Significant potential for LCCs to increase traffic to other regions

Source: OAG (September data), Airbus

LCC market share (seats offered) in 2014 per global region

In Europe

- LCCs capture

49% of intra-regional traffic


70% of traffic growth until 2034 will be coming from existing network

0.0

0.3

0.6

0.9

1.2

1.5

2014 2034

Monthly Trillion RPK Growth from new routes

Growth from existing network

Source: Airbus GMF2015


47 Aviation Mega-Cities in 2014

• >50 000 daily long-haul passengers



2014 Aviation Mega-Cities

47 Aviation

Mega-cities

0.9M Daily Passengers: long-haul traffic to/

from/via Mega-Cities

90%+ of long-haul traffic

on routes to/from/via 47 cities

22% of World

GDP in 2014

Source: McKinsey, UNPD, Airbus GMF2015


… and 91 Mega-Cities in 2034




2034 Aviation Mega-Cities

91 Aviation

Mega-cities

2.3M 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 2034

Source: McKinsey, UNPD, Airbus GMF2015


Routes between Aviation Mega-cities have more premium passengers

14%

10% 8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Aviation Mega-City to AviationMega-City

Aviation Mega-City <>Secondary City

Secondary City to SecondaryCity

Cities with more than 10,000 daily passengers, Long-haul, flight distance >2,000nm, excl. domestic traffic

Source: Sabre (September 2014 data), Airbus GMF2015

Percentage of premium between AMC 2014 - 14% compared to 11% average international long-haul

Percentage of premium passengers on routes types


These airports are already largely congested 2014 Aviation Mega-Cities

Source: IATA WSG database, Airbus GMF

*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

39 out of the

47 Aviation Mega Cities are schedule- constrained today


Asia-Pacific to lead in world traffic by 2034


RPK traffic by airline domicile (billions)

0 1,000 2,000 3,000 4,000 5,000 6,000

Asia-Pacific

Europe

North America

Middle East

Latin America

CIS

Africa

29%

25%

25%

9%

5%

4%

3%

5.7%

3.6%

2.5%

6.7%

5.2%

4.9%

5.3%

% of 2014 world RPK

20-year growth

36%

21%

17%

13%

6%

4%

3%

% of 2034 world RPK

2014 traffic 2015-2034 traffic

20-year world annual traffic growth

4.6%


Stay in service

Replacement

Growth 32,600 New

aircraft

Demand for some 32,600 new passenger and freighter aircraft

Source: Airbus

Note: Passenger aircraft ≥100 seats, Freighter aircraft ≥10 tonnes

19,000

Fleet in service evolution: 2015-2034 38,500

5,900

13,100

19,500

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Beginning 2015 2034


Regional breakdown of 32,600 new passenger and freighter deliveries

North America

5,880

Latin America

2,540

Africa

1,130

Europe

6,450

CIS

1,310 Asia-Pacific

12,810

SINGLE-AISLE

22,920 TWIN-AISLE & VLA

9,660

20-YEAR NEW DELIVERIES

Source: Airbus GMF

Middle East

2,460


Airbus backlog well aligned with demand forecast


values as at end December 2015

Total backlog includes undisclosed

Lessors 20%

Latin America

6%

8%

North America

9%

17%

Europe & CIS 18%

24% Asia-

Pacific 29%

39% Africa

1%

3%

Middle East 6%

7%

Airbus backlog and GMF demand forecast by region


The short term - what’s hot today?

Oil price Emerging economies Cycle - Orders, deliveries…


Air travel has proven to be resilient to external shocks

Source: ICAO, Airbus

World traffic - 98% growth since 9/11

World annual traffic (RPKs - trillions)

0

1

2

3

4

5

6

7

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

98%

Oil Crisis Oil Crisis Gulf Crisis AsianCrisis 9/11 SARS Financial

Crisis


World GDP Growth +2.5%

Passenger Traffic (RPKs) +6.5%

Capacity (ASKs) +5.6%

Load Factor +0.6 percentage point Reaching record levels: world average. 80.3% Source: IATA members traffic for 2015

published February 4th, 2016

March 16

Market - Over 3.5bn passengers in 2015 2016 outlook 3.8bn passengers


-4%

-2%

0%

2%

4%

6%

8%

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 J MM J S N-4%

-2%

0%

2%

4%

6%

8%

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

World real GDP World 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 Economics, OAG, Airbus

+6.5%

February 2016 Passenger Traffic

2015 2016


% (year-over-year)

-12%

-8%

-4%

0%

4%

8%

12%

16%

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 J M M J S N

+4.1% US Traffic

Asia-Pacific and other emerging markets are leading traffic growth

+8.9% Asia - Pacific Traffic

+6.4% Western Europe Traffic

+8% Emerging Markets Traffic

ASKs year-over-year monthly evolution

2009 2010 2011 2012 2013 2014 Source: OAG, Airbus

2015 2016


Emerging economies are a global phenomenon

Source: IHS Global Insight, Airbus

World map of emerging countries

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2000 2005 2010 2015 2020 2025 2030 2035

Emerging markets accounting for a growing share of the world economy

Emerging markets* as a share of world economy (%)

History Forecast

1/3rd

1/4th

Almost half

Source: Source: IHS Economics, Airbus * 54 emerging economies


0

500

1,000

1,500

2,000

2,500

3,000

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Emerging markets economic growth rate tapers but added volume remains impressive and is expected to rebound

Emerging markets - added economic volume in 2015 corresponds to the size of their economy in 1982

Forecast History Growth(%)

Emerging economies* real

GDP growth

Volume (billion 2010$)

Emerging economies* added economic volume

Source: IHS Economics, Airbus * 54 emerging economies

Each year, deliveries represent on average 7% of the in service fleet

Source: Airbus analysis from ASCEND database

Aircraft >= 100 seats

Yearly deliveries of aircraft above 100 seats

0%

2%

4%

6%

8%

10%

12%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Deliveries as % of fleet

Source: IATA ACMG, FY ‘13

@ $2.7/USg

Distribution of Total Airline Cost – FY 2014

Top three airline costs – Fuel, Ownership, Maintenance


Past data show no correlation between oil price and aircraft retirement age

-

5

10

15

20

25

30

35

-

20

40

60

80

100

120

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Source: ASCEND, Airbus, IHS Energy Passenger aircraft (>100 seats) *A/C age when 50% of delivered aircraft are still in service)

SA

WB

Brent oil price (nominal US$ per bbl) Aircraft* Half-Life


No clear trend in survival curves over the last 5 years

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40

2014@ $99per barrel

2013@1$09 per barrel

2012@$115 per barrel

2011@ $114 per barrel


AC Age

Share of delivered a/c still in service Attrition Curves based on SA fleet in service

AC Age

Attrition Curves based on WB fleet in service Share of delivered a/c still in service

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40

2014@ $99per barrel

2013@1$09 per barrel

2012@$115 per barrel



Avg. yearly oil price Avg. yearly oil price

Source: Ascend


0

20

40

60

80

100

120

140

160

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Current US$ 2015 US$

Short to medium term oil price forecasts have been revised down

Source: IHS Energy (Feb. 2016), Airbus

Oil prices - In the long-run, growing oil demand and limited reserves will bring prices back to their trend levels.

Forecast History Brent oil price (US$)


-10%

-5%

0%

5%

10%

15%

20%

Q1 Q2 Q3 Q4

2012 20132014 2015

Lower fuel prices bolstering the bottom line

US AIRLINES (sample representing 20% of world traffic)

-10%

-5%

0%

5%

10%

15%

20%

Q1 Q2 Q3 Q4

2012 20132014 2015

EUROPEAN AIRLINES (sample representing 15% of world traffic) EBIT margin (%)

-10%

-5%

0%

5%

10%

15%

20%

Q1 Q2 Q3 Q4

2012 20132014 2015

EMERGING MARKETS AIRLINES (sample representing 15% of world traffic) EBIT margin (%)

EBIT margin (%)

-10%

-5%

0%

5%

10%

15%

20%

Q1 Q2 Q3 Q4

2012 20132014 2015

AIRLINES WORLDWIDE (sample representing 60% of world traffic) EBIT margin (%)

Source: The Airline Analyst, Airbus


0

1000

2000

3000

4000

5000

6000

1990 1995 2000 2005 2010 2015 20200

200

400

600

800

1000

1200

Airbus backlog Airbus deliveries (scale 1/5 x backlog)

Backlog and delivery ratio above 10:1 in 2015


0

1000

2000

3000

4000

5000

6000

1990 1995 2000 2005 2010 2015 20200

200

400

600

800

1000

1200

Airbus backlog Airbus deliveries (scale 1/5 x backlog)

Backlog and delivery ratio at 7:1 in 2020, A320 at rate 60 from mid 2019


2533

3421 3715 3488 3552

4437 4682

5559 6386

6831

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Swaps A320-A330ceo/neo

Cancellations

Backlog

22/03/2016 Use Tab 'Insert - Header & Footer' for Presentation Title - Siglum - Reference

Backlog x 2.7 since 2006 – Cancellations within historic bounds

% Cancellations year N / Backlog year N-1

2% 5% 4% 1% 2% 5% 2% 2% 1% 4%

% Swaps ceo to neo

+2% +1% +1%


Productivity increasing, stored aircraft around historical low St

ored

Ai

rcra

ft Pr

oduc

tivity

ASKs per aircraft in service year-over-year monthly evolution (%)

-4%

-2%

0%

2%

4%

6%

J M M J S N J M M J S N J M M J S N J M M J S N2013 2014 2015 2016

Twin-Aisle + VLA

Single-Aisle

+0.2% +0.5%

Number of aircraft stored at end of the period Share of fleet (%)

* Western-built passenger aircraft ≥100 seats

0%

4%

8%

12%

16%

20%

0

400

800

1,200

1,600

2,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

New Mid Old Share

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 J F M A M J

2014 2015 2016

Source: Ascend, OAG, Airbus


Indicators remain encouraging

Indicator Comment Status Trend

Finance

Economy

Freight traffic

Airlines

- World economy not expected to emerge from its soft patch of the last three years - Oil prices remaining at relatively low levels

- Freight traffic recovery “on hold”

- Interest rates still at low levels

Aircraft

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

- Stored aircraft remaining at low levels - Passenger aircraft productivity continues to improve

- 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


© AIRBUS (Airbus S.A.S., Airbus Operations S.A.S., Airbus Operations GmbH, Airbus Operations LDT, Airbus Opeartions SL, Airbus China LTD, Airbus (Tianjin) Final Assembly Company LTD, Airbus (Tianjin) Delivery Centre LTD). All rights reserved. Confidential and proprietary document. This document and all information contained herein is the sole property of AIRBUS. No intellectual property rights are granted by the delivery of this document or the disclosure of its content. This document shall not be reproduced or disclosed to a third party without the express written consent of AIRBUS S.A.S. This document and its content shall not be used for any purpose other than that for which it is supplied. The statements made herein do not constitute an offer. They are based on the mentioned assumptions and are expressed in good faith. Where the supporting grounds for these statements are not shown, AIRBUS S.A.S. will be pleased to explain the basis thereof. AIRBUS, its logo, A300, A310, A318, A319, A320, A321, A330, A340, A350, A380, A400M are registered trademarks.

© AIRBUS (Airbus S.A.S., Airbus Operations S.A.S., Airbus Operations GmbH, Airbus Operations LDT, Airbus Opeartions SL, Airbus China LTD, Airbus (Tianjin) Final Assembly Company LTD, Airbus (Tianjin) Delivery Centre LTD). All rights reserved. Confidential and proprietary document. This document and all information contained herein is the sole property of AIRBUS. No intellectual property rights are granted by the delivery of this document or the disclosure of its content. This document shall not be reproduced or disclosed to a third party without the express written consent of AIRBUS S.A.S. This document and its content shall not be used for any purpose other than that for which it is supplied. The statements made herein do not constitute an offer. They are based on the mentioned assumptions and are expressed in good faith. Where the supporting grounds for these statements are not shown, AIRBUS S.A.S. will be pleased to explain the basis thereof. AIRBUS, its logo, A300, A310, A318, A319, A320, A321, A330, A340, A350, A380, A400M are registered trademarks.

March 23 2016 - Airbus · 2018-03-16 · The Market Long and Short-term Outlook March 23rd 2016 ....

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