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Asia will drive the global aviation industry for the next two decades according to the latest Cirium Fleet Forecast

2019-08-15 10:00 1481

SINGAPORE, Aug. 15, 2019 /PRNewswire/ -- Over 40% of commercial passenger and freighter aircraft manufactured between 2019 and 2038 will be delivered to customers in Asia, according to the latest Cirium Fleet Forecast.

The 2019 Cirium Fleet Forecast for commercial jets and turboprops estimates that 48,860 new passenger and freighter aircraft will be delivered over the next 20 years, worth an estimated US$3.1 trillion. Passenger traffic is forecast to grow at 4.5% per year over the forecast period and freight traffic at 4.0%.

"The new Cirium Fleet Forecast shows that the centre of gravity in the aviation industry is shifting eastwards. By 2038, the combined Asia-Pacific and China fleet will increase its global share from 30% to 42%, followed by the North and Latin Americas (28%), Europe and Russia (21%), Middle East (6%) and Africa (3%)," said Rahul Oberai, VP Sales, APAC for Cirium.

The news comes at a time of increasing uncertainty. While 2019 marks the 10th consecutive year of global airline net profits, reaching US$225 billion for the cycle, annual passenger traffic growth is slowing.

"A growth slowdown isn't surprising. The WTO's World Trade Outlook Indicator is the weakest since 2010, and poor cargo traffic results in the first half of 2019 bear out a weakening market, exacerbated by the US-China trade dispute. With fuel comprising a quarter of airline costs, oil price volatility is also a concern," said Oberai.

Pragmatic predictions

The 2019 Cirium Fleet Forecast used Ascend by Cirium's 2019 Full-Life Base Values to estimate the total value of new deliveries at around US$3.1 trillion. This is a more pragmatic way to predict actual business values than the manufacturer list prices often used in other forecasts.

"The industry has a firm-order backlog of over 14,000 aircraft, or more than seven years of production at current rates. Looking long-term, the global commercial aircraft fleet will grow by almost 25,000 -- or 3.4% annually -- to meet traffic growth forecasts. This will take the operational aircraft fleet to 54,500 by the end of 2038, of which 46,800 will be passenger jets," Rob Morris, Global Head of Consultancy, Ascend by Cirium said.

Airbus and Boeing will remain the largest commercial aircraft OEMs, collectively delivering an estimated 79% of aircraft and 87% by value through 2038. However, there is also US$400 billion worth of demand for other OEMs or new programmes.

The single-aisle and twin-aisle fleets will expand the fastest, at close to 4% annually, with regional aircraft growing more modestly at around 1% and freighters at just over 2%. In the passenger market, single-aisle jets will account for 67% of deliveries and 52% of delivery value, with the core of this US$1.6 trillion market continuing to be the 150-seat size, typified by the Airbus A320neo and Boeing 737 Max 8.

In the regional segment, the turboprop market is expected to be worth US$57 billion, led by the 70-seat sector, with potential for a larger 90 plus-seat size in the 2030s.

"This sector is experiencing change, with De Havilland now manufacturing the Q400 and China developing its MA700 programme. Although we don't have a hybrid-electric airliner in this forecast, it will almost certainly be the next powerplant direction for this market," said Morris.

Replacement cycle 

The Cirium Fleet Forecast predicts almost three-quarters of aircraft presently in service will be permanently retired during the next 20-years, including 19,900 passenger aircraft and 2,070 freighters. An additional 2,180 passenger aircraft will be converted for freighter service.

"We use a survivor curve analysis, based upon Cirium Fleets Analyzer's rich aircraft histories, that specifies an average economic life of 22 years for single- aisle aircraft and 20 years for twin-aisles. About 53% of new commercial jet and turboprops will be for fleet growth and 47% for replacement over the forecast period," said Morris.

To download an Executive Summary of the 2019 Cirium Fleet Forecast, please visit the Cirium website at http://bit.ly/2GQ2g9m.

For further information please visit www.cirium.com/smarterway and follow Cirium updates via LinkedIn, Twitter and YouTube.

About Ascend by Cirium

Ascend by Cirium is the global team of analysts and consultants delivering powerful analysis, commentaries and projections to airlines, aircraft build and maintenance companies, financial institutions, insurers and non-banking financiers. With over five decades of market experience and a team that includes eight certified ISTAT Appraisers, the team has been recognized as the Appraiser of the Year -- an Aviation 100 Award -- for the seventh time in nine years.

About Cirium

Cirium brings together powerful data and analytics to keep the world in motion. Delivering insight, built from decades of experience in the sector, enabling travel companies, aircraft manufacturers, airports, airlines and financial institutions, among others, to make logical and informed decisions which shape the future of travel, growing revenues and enhancing customer experiences. Cirium is part of RELX PLC, a global provider of information-based analytics and decision tools for professional and business customers. Find out more at cirium.com.

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Source: Cirium
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