Posted by- Neelam Mathews
Air travel market recoveringPassenger air traffic rose 8 percent in 2010, after declining about 2 percent in 2009. The persistent resilience of air travel is expected to sustain 6 percent growth in 2011 and keep the growth rate at or above the historical trend through the middle of the decade.
Although volatile fuel costs, political upheaval in the Middle East and North Africa, and unresolved government debt in many industrialized economies create risk of a renewed downturn, commercial aviation has weathered such shocks to the system in the past. Recovery has followed each event as the industry reliably returned to its long-term growth rate of approximately 5 percent per year. We see that same resilience come into play as airlines have skillfully managed capacity to maintain profitability in face of the variety of challenges that have beset the industry as the world economy emerges from the global recession.
Purpose of the forecastThe Current Market Outlook is our long-term forecast of air traffic volumes and airplane demand. Each year's forecast starts from a blank computer screen, so we can factor the current business conditions and developments into our analysis of the long-term drivers of air travel.
The forecast details demand for passenger and freighter airplanes, both for fleet growth and for replacement of airplanes that retire during the forecast period.
We have shared the forecast with the public since 1964 to help airlines, suppliers, and the financial community make informed decisions.
The shape of the marketThe long-range forecast for 2011 anticipates delivery of 33,500 new airplanes over the next 20 years, valued at more than $4.0 trillion. Looking back at our forecasts over the past 10 years reveals that our projections for long-term market growth tend to be conservative, compared to actual industry performance.
We have been admirably accurate, however, on the crucial forecast of the market share that each airplane size category will capture. Single-aisle airplanes account for the majority of deliveries over the next 20 years-70 percent of the airplanes and 48 percent of the value. Rapidly expanding air service within China and other emerging economies and the spread of low-cost carrier (LCC) business models throughout the world drive this market segment. The twin-aisle market, which includes efficient long-range airplanes such as the Boeing 787 and 777, is the fastest growing segment of the market, accounting for 22 percent of the delivery units and 43 percent of the delivery dollars. High fuel costs are compelling airlines to accelerate replacement of older airplanes. In addition, the increased capabilities of the latest long-range, twin-aisle airplanes create opportunities for operators to take advantage of the ongoing liberalization of air transport markets to open new nonstop routes.