worldwide market forecast for commercial air transport - 2001-2020

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ASIA / PACIFIC N.AMERICA L.AMERICA AFRICA M.EAST EUROPE YGR-5020 Worldwide Market Forecast for Commercial Air Transport 2001-2020 June 2001 Marketing Japan Aircraft Development Corporation

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Page 1: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

ASIA / PACIFIC

N.AMERICA

L.AMERICA

AFRICA

M.EAST

EUROPE

YGR-5020

Worldwide Market Forecast for

Commercial Air Transport2001-2020

June 2001

Marketing

Japan Aircraft Development Corporation

Page 2: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

Index

Foreword ............................................................... 3

1. Summary ............................................................... 4

2. State of the Airline Industry ..................................... 7

3. Traffic Forecast ....................................................... 12

3.1 The Relationship among Passenger Traffic,

Economy and Yield ................................................. 12

3.2 Economic Forecast ................................................ 13

3.3 Trend of Yield ........................................................ 15

3.4 Passenger Traffic .................................................... 16

4. Available Seat Kilometer (ASK) .............................. 18

4.1 Load Factor ............................................................ 18

4.2 ASK Forecast by Regions ....................................... 19

4.3 ASK Share by Market Segment .............................. 20

4.4 ASK Forecast by Region and Range........................ 22

5. Fleet and Delivery Forecast .................................... 23

5.1 Improvement of Airplane Utilization ........................ 23

5.2 Trend of Airplane Size ............................................ 24

5.3 Retirement of Existing Fleet ................................... 27

5.4 Jet Airplane Backlog ............................................... 29

5.5 Current and Future Airplane Models ....................... 30

5.6 Assumption of Turboprop and Jet Share i

in Small Airplane Market ..........................................31

5.7 Jet Fleet and Deliveries Forecast ........................... 32

5.8 Turboprop Fleet and Deliveries Forecast ............... 39

6. Engine Market Forecast ......................................... 44

6.1 Engine Category and Equipped Airplanes .............. 44

6.2 Engine Deliveries Forecast ..................................... 45

7. Methodology ........................................................... 46

2

Page 3: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

Foreword

The forecast for world air traffic and airplane demand for the next 20 years from

year 2001 are described in this document worked by the Market group of Japan

Aircraft Development Corporation.

This forecast covers jet and turboprop commercial transport larger than 15 seats

excluding freighter operated by the world airlines domiciled in the 10

geographical regions except for CIS market, which are Africa, Asia(exclude

Japan and China), China, East Europe, Japan, Latin America, Middle East,

North America, Oceania and West Europe.

Data source to work this forecast are International Civil Aviation

Organization(ICAO), Official Airline Guide(OAG), AirClaim CASE Database,

Japan Center for Economic Research and OECD Economic Outlook.

3

Page 4: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

1. Summary

• As the major drivers for traffic growth, world economy will grow at 3.2% per

year, and yield in real term will decline at 1.3% per year for the next 20 years.

• World airlines experienced traffic growth of average 5.8% per year for the past 20

years. During the next 20 years, they will achieve an average of 4.6% growth per

year, and the traffic volume in 2020 will reach 2.5 times of the present level.

North American airlines, which dominates the largest market share of 38% in

2000, will grow slowly at 3.6% per year, therefore the market share will decrease

to 30% in 2020.

European airlines shared 30% in world market will grow at 4.4% per year, and

they will maintain the existing share in 2020.

By the Economic revovery of Asian countries, Asia/Pacific airlines will realize

6.1% growth per year and form one of the largest market with North American

airlines and European airlines.

4

N.AMERICA

EUROPE

ASIA / PACIFIC

OTHERS

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1980 1985 1990 1995 2000 2005 2010 2015 2020

2456

2294

2308

819

1221

965

709

293

FORECASTACTUAL

3188

7876

YEAR 2000

YEAR 2020

YEAR1980

1038

AIR TRAFFIC FORECAST

RPK(BILLIONS)

AVERAGE ANNUAL GROWTH RATE(%)1981-2000 2001-2020

N.AMERICA 4.9 3.6EUROPE 6.1 4.4ASIA / PACIFIC 7.9 6.1OTHERS 4.5 5.3TOTAL WORLD 5.8 4.6

TOTAL WORLD

2000

1%

3%

4%

5%

3%

2%5%

9%

30%W.EUROPE W.EUROPE

E.EUROPE

E.EUROPE

ASIA

ASIA

OCEANIA

OCEANIA

CHINA CHINA

JAPAN

JAPANM.EAST

M.EASTAFRICA

2%AFRICA

L.AMERICA

L.AMERICA

30%

EUROPE

ASIA / PACIFIC

22%

OTHERS9%

2020

1%

4%

7%

5%

3%

6%

14%

28%

ASIA / PACIFIC

29%

OTHERS10%

N.AMERICA

38%

N.AMERICA

30%

29%

EUROPE

Page 5: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

• The traffic capacity in terms of ASK will grow at an average of 4.4% per year

with load factor improvement from 70% to 74% for the next 20 years and reach

2.3 times of the present capacity.

• For the jet airplane market, 26,200 unit will be required to accommodate the

traffic capacity in 2020, which is double of present fleet. On the other hand, only

3,900 unit in 2020 compared with 4,600 unit in 2000, will be operated in the

turboprop market. This dramatic fleet decrease will caused by the shift to regional

jet market.

• Number of retirement for jet and turboprop airplanes between 2001 and 2020 are

estimated 6,900 units and 3,100 units respectively, these are 55% of existing jet

fleet and 67% of existing turboprop fleet.

5

0

5000

10000

15000

20000

25000

30000

1980 1985 1990 1995 2000 2005 2010 2015 2020

WORLD JET FLEET FORECAST

20-59 SEATER

60-99 SEATER

100-119 SEATER

OVER 400 SEATER

120-169 SEATER

170-229 SEATER

230-309 SEATER

310-399 SEATER

UNITS

ACTUAL FORECAST26152

12546

18329

5563

7689

RETAINED

NEW DELIVERY

328JET/428JET,ERJ135/145,CRJ200

CRJ700/900,BRJ-X,YSX

717,737-600A318

728JET/928JET,ERJ170/190,Avro RJ

737-700/800/900A319/A320

757

A310767

A340777

747XA3XX

727-200,737-300/400A320,MD80/MD90

DC8,707

747DC10,MD11L1011

767

727-100,737-100/200/500,TRIDENT,DC9S

BAC111,F28/F70/F100,DC9

A321

A300

A330

747

A310A300

2282

3167

2165

5910

1980 1892

1050

2079

0

1000

2000

3000

4000

5000

6000

7000

20-59SEATER

60-99SEATER

100-119SEATER

120-169SEATER

170-229SEATER

230-309SEATER

310-399SEATER

OVER 400SEATER

JET AIRCRAFT SALES FORECAST BY SIZE(2001 - 2020)UNITS 2000 Price

($ Billions)

0

100

200

300

400

500

600

35.9

78.568.6

236.4

102.7

175.3

279.6

196.3

TOTAL20,525 UNITS$1173 Billions

AIRCRAFT SIZE

NARROWBODY WIDEBODY

Page 6: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

• The market for the new commercial jets over the next 20 years is 20,500 units

including backlog of 4,500 units and $1,173 billions in dollar value, and the

market for the turboprop for the same period is 2,300 units and $17 billions.

• The proportion of widebody airplane will represent 32% in unit and 55% in dollar

value of the total jet market.

• North American airlines will maintain the largest market share in the world. They

will get 6,500 deliveries which are 32% of total new jets, and 5,600 of them are

narrow-body airplanes. They represent 33% of the total new narrow-body jets.

Asia/Pacific airlines will hold the largest market of the new wide-body airplanes.

They will need 2,200 units, which are 44% of the total wide-bodies.

• Engine deliveries for the next 20 years will be 52,770 units for jet and 5,360 units

for turboprop. They will be $278 billions and $4 billions in dollar value

respectively.

The largest engine market category will be 12,000 - 35,000 lb class which are

equipped by A320 and B737 series, and they represent 43% of total engine

market in unit, but 65,000 - 100,000 lb class which are equipped by A330/A380

and B777/B747X will be the largest one of 38% in dollar value.

6

5364

13365

22663

8014 8729

0

5000

10000

15000

20000

25000

T/P <12 12-35 35-65 65-100 (1000 LB)

A330A380B777B747X

A300/A310/A340B747/B757/B767

A318/A319/A320A321/A340B757/B767/B737

328JET/528JET728JET/928JETAvro RJCRJ-200/700/900EMB135/145/170/190

1900, MetroATR42/ 72,CN235, DHC- 8Do228/ 328EMB-120

ENGINE DELIVERY FORECAST(2001 - 2020)

NO. OF ENGINE

NUMBER OF ENGINE

NO.OF ENGINE

SALES VALUE($ B)

TURBOPROP 5,364 4JET 52,771 278

TOTAL 58,135 282

0

25

4

27

91

64

96

50

75

100

125

SALES VALUE

SALES VALUE(2000 US $ B)

Page 7: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

2. State of the Airline Industry

The world airline traffic figures for 1999, point to 6% increase in RPK (Revenue

Passenger Kilometers), by steadily economic growth of United States and Euope,

and an economic recovery in Asia. The operating revenue was increased to $306

billions, but the operating profit was decreased to $12.6 billions because of lower

yield by competition, increased fuel price and cost, and over capacity.

7

WORLD AIR TRAFFIC

0

200

400

600

800

1,000

1,200

1974 1979 1984 1989 1994 1999

CALENDAR YEAR

Source : ICAO Scheduled + Non-ScheduledRPK (Billions)

1999Total World

N.AMERICA

EUROPE

ASIA / PACIFIC

OTHERS

2,982

279

664

906

1,133

5974

211

651

307

1975-1979 1980-1984 1985-1989 1990-1994 1995-1999N.AMERICA 9.0% 2.8% 7.5% 2.7% 5.0%EUROPE 7.3% 1.5% 8.1% 7.3% 5.9%ASIA / PACIFIC 14.0% 6.9% 8.4% 9.5% 7.3%OTHERS 14.1% 4.9% 4.2% 5.5% 3.5%

WORLD TOTAL 9.6% 3.3% 7.4% 5.6% 5.6%

Ave. Annual Growth Rate (%)

1974Total World

WORLD AIRLINES OPERATING PROFIT

4.6

7.2

10.2

7.6

-1.5-0.5

-2.0

2.3

8.4

14.0

12.3

16.515.9

12.6

-5

0

5

10

15

20

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

OPERATING PROFIT(US$ BILLIONS)

CALENDAR YEAR

Source : ICAO

Page 8: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

The recent healthy growth of world airlines were produced by mainly continued

economic growth in United Stage and Europe, despite an Asian recession.

However, it is also depends on the airline's efforts for cost reduction and increase

profitability by the expansion of their network through the Global Alliance and

feeder operation by affiliated airlines.

There are five major alliance groups which are Star, Oneworld, Skyteam,

KLM/Northwest, and Qualiflyer. They dominate 58% of the world airlines

passengers and 51% of the operating profit. The purposes of the alliance are to

provide quality service to spread destination for passengers by seamless connection

through the overall network and common FFP, and to reduce the cost by joint use

of ground facilities and the scale merit. It is very hard, however, to allocate

revenue or profit among the airlines in the alliance. But these trend included code

sharing will progress gradually to achieve the alliance benefit in future.

8

           ALLIANCEREGIONS (Established)NORTH AMERICA UNITED AMERICAN DELTA NORTHWEST

AIR CANADA

LATIN AMERICA VARIG LANCHILE AEROMEXICOMEXICANA

EUROPE LUFTHANSA BRITISH AW AIR FRANCE KLM SWISSAIRSAS IBERIA CSA (2001.3) SABENAAUSTRIAN FINNAIR THY - TURKISHBRITISH MIDLAND AER LINGUS AOM

TAPAIR EUROPELOT

CROSSAIRVOLAREAIR LITTORALPORTUGALIALTU

M.EAST / AFRICA EL ALSOUTH AFRICAN

ASIA / PACIFIC SINGAPORE QANTAS KOREAN AIRANA CATHAY CHINA EASETERNTHAI AIRWAYS (2000.10)AIR NEW ZEALAND THAI AIRWAYS**AIR CHINA*(2000.10)

1999 TOTALRPK(B) (World Share) 589 (21%) 465 (16%) 301 (11%) 177 (6%) 101 (4%)Passenger(B) (W.Share) 293 (19%) 199 (13%) 175 (11%) 72 (5%) 52 (3%)Revenue ($Billions) 70 50 26 17 16

* : Code-sharing ** : FuturePlan

WORLD AIRLINES GLOBAL ALLIANCE

QUALIFLYERSKYTEAM(1999.9)

KLM/NORTHWEST(1989)

STAR ALLIANCE(1997.5) (1998.3)

ONEWORLD(1998.9)

Page 9: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

9

  US MAJORS AND AFFILIATED REGIONAL AIRLINES

REGION AND AFFILIATED REGIONAL AIRLINES

US MAJORS Western West North Central South Central East North Central Southeast North EastWashington, Oregon,California, Nevada,Arizona

Idaho, Montana,Wioming, Yutah,Colorado, N.Dakota,S.Dakota, Nebraska,Kansas

New MexicoOklahomaTexasArknsasLousiana

Minnesota, Iowa,Misouri, Wisconsin,Michigan, Indiana, Ohio

Mississippi, Arabama,Tennessee, Kentucky,West Verginia, Virginia,N.Carolina, S.Carolina,Geogia, Florida

Maine, New Hampshire,Vermont, Massachusetts,Rhode Island, Conneticut,New York, New Jersey,Delaware, Maryland,Pennslvania,Washington D.C.

Alaska Airlines Horizon Air(Seattle) (Seattle)America West Mesa Big Sky Chautauqua

(Phoenix) (Montana) (Columbus)American American Eagle Chautauqua Executive Busines Express(Dallas/Ft.Worth) (Dallas/Ft.Worth) (St.Louis) (San Juan) (Boston)

Trans States(St.Louis)

Continental Skywest Continental Express Gulfstream Int'l Continental Express(Houston) (Houston) (Newark) (Cleveland)(Newark) Commutair

(New York LGA)Delta Skywest ASA Comair ACJet(Atlanta) (Salt Lake City) (Dallas/Ft.Worth) (Cincinnati) (New York LGA)

ASA(Atlanta)

Northwest Mesaba Express I(Minneapolis/St.Paul) (Detroit) (Menphis)

(Minneapolis/St.Paul)Express 1(Detroit)

TWA Chautauqua(St.Louis) (St.Louis)

Trans States(St.Louis)Corporate(St.Louis)

United Air Wisconsin(Chicago) (Denver) (Chicago)(Denver)(San Francisco) (Los Angeles)(Los Angeles) Great Lakes(Washington) Skywest (Denver)US Airways Air Midwest Mesa Allegheny, Colgan AW

(Charlotte) (Boston)Piedmont Chautauqua

Potomac Air(Washington National)

      EEUURROOPPEEAANN MMAAJJOORRSS AANNDD AAFFFFIILLIIAATTEEDD RREEGGIIOONNAALL AAIIRRLLIINNEESS

EEUURROOPPEEAANN CCOOUUNNTTRRYY AANNDD AAFFFFIILLIIAATTEEDD RREEGGIIOONNAALL AAIIRRLLIINNEESS * : SubsidiaryMMAAJJOORRSS Spain Italy UK France Germany Netherland Swistzerland Austria Sweden Norway

British AW Brymon Deutche BA*(London) CityFlyer*

Go*LoganairMaersk Air

Air France British European City Jet*(London City) Regional AL*

Brit'Air*Lufthansa Air Dolomitti Augsburg AW Lauda*(Frankfurt) LH Cityline* (Wien)

(Cologne)LH Cargo*Euro Berlin*Eurowings(Dortmunt)

KLM KLM UK* Eurowings KLM Cityhopper* Braathens(Amsterdam) (London) (Dortmunt) (Amsterdam) (2003.10迄)

Buzz* KLM Excel KLM ALPSMartinair*Transavia*

Alitalia Avianoba*(Rome) Air Europe*

Alitalia Team*Alitalia Express*

Iberia Aviaco*(Madrid) Binter Mediterraneo*

Swissair Air Littoral Crossair*(Zurich) (Basel)

AOL Balair*

Air Liberte

SAS AL of Britain* SAS Commuter*(Stockholm)

Page 10: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

Merger of US Majors is one of the major events of airline industry in 2000.

American's acquisition of TWA was just approved in this March, they become the

largest airline (passenger share : 23%) over United. Following this acquisition,

United/US Airways Merger is proposed, but it is not clear due to many oposit

opinions that this merger lead to less quality service by fewer selections for

consumers. But, the merger would be approved, oligopoly would be progressed,

and their affiriated airlines would be restructured.

10

January - September, 2000

RPK Employee FleetOperatingRevenue Net Profit

(Millions) (Units) ($1000) ($1000)143.3 91,500 717 14,844 76618% 19% 18% 21% 31%33.7 21,200 190 2,736 -1154% 4% 5% 4% -5%

176.9 112,700 907 17,580 65123% 23% 23% 25% 26%

154.3 91,700 607 14,559 12120% 19% 16% 21% 5%56.1 41,600 398 6,912 -1687% 8% 10% 10% -7%

210.4 133,300 1,005 21,471 -4727% 27% 26% 31% -2%

<Ref.>

78.6 43,900 367 7,470 29810% 9% 9% 11% 12%

133.0 69,900 611 12,724 82617% 14% 16% 18% 33%97.5 51,102 427 8,675 32512% 10% 11% 12% 13%

2,499

US Major Airline

494,008

US Majors Traffic and Finance

781.7

American / TWA

United / US Airways

TWA

American

US Airways

3,890 69,767Total US Major

United

Continental

Delta

Northwest

Page 11: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

These world airlines upward trend is affecting airplanes order in recent years.

World major airplanes (Airbus and Boeing jets) were ordered over 1000 jets a year

since 1996. In 1999, it was decreased to 870 jets, but in 2000, it was increased to

1131 jets again.

Meanwhile the regional jets were increased in recent years. The regional jet

operations are spreading over Europe and North America by replacing turboprop

fleet and developing long-thin routes as a new market. In 2000, they got order of

840 units, it was 43% of total unit of order.

11

JET AIRPLANE ORDERS AND DELIVERIES IN 2000

Order Delivery Backlog Order Delivery Backlog

AIRBUS 520 311 1626 BAe 15 14 11A300 2 8 25 Avro RJ85 5 7 5A310 0 0 5 Avro RJ100 8 7 4A318 41 0 161 Avro RJX85 2 0 2A319 120 112 383A320 158 101 535 BOMBARDIER 238 99 487A321 69 28 206 CRJ-100/200 153 99 303A330 110 43 192 CRJ-700 75 0 174A340 20 19 119 CRJ-900 10 0 10

BOEING 611 489 1612 FAIRCHILD DORNIER 106 34 221

717 21 32 107 328JET 48 34 75737 391 281 1016 728JET 54 0 142747 27 25 77 928JET 4 0 4757 43 45 79767 12 44 84 EMBRAER 481 159 597777 117 55 247 ERJ-135 65 46 84MD-11 0 4 2 ERJ-140 133 0 133MD-80 0 0 0 ERJ-145 233 113 260MD-90 0 3 0 ERJ-170 50 0 90

ERJ-190 0 0 30

合  計 1971 1106 4554

SHARE OF ORDERS

BAe1%

AIRBUS26%

EMBRAER24%

F/DORNIER5%

BOMBARDIER12%

BOEING32%

TOTAL 1,971 UNITS

SHARE OF DELIVERIES

BAe1%

F/DORNIER3%

EMBRAER14%

BOMBARDIER9%

BOEING45%

AIRBUS28%

TOTAL 1,106 UNITS

Page 12: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

3. Traffic Forecast

3. 1 The Relationship among Passenger Traffic, Economy and Yield

As air traffic is a part of economic activities, if the economy is active , then air

traffic is active also. And it is known that the air fare effects to the traffic also.

Therefore, the economic (GDP) growth and the decline of air fare (Yield) will

result in the passenger traffic (RPK) growth.

The relationship among RPK, GDP and Yield in the past are analyzed in each region, and

Regional RPK are forecasted by using their relationship, GDP forecast and Yield forecast.

Here, Regional RPK show RPK for airlines domiciled in the geographical region.

12

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

INDEX (1980=1)

TRAFFIC (RPK)

GDP

YIELD

TRAFFIC vs. GDP, YIELD

Gulf War

CALENDAR YEAR

Page 13: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

3. 2 Economic Forecast

World economy will grow at 3.2% per year over the next 20 years, compared with

2.9% in the past 20 years.

North America and Western Europe will keep moderate growth at the rate of 2.3%

per year in the future as same as the past.

Economic recession in Japan is likely to continue for a couple more years, but in

long term, Japan will grow at 2.2% per year as almost same as North America and

Western Europe.

China shows lower growth rate than the past, but will keep the highest growth of

7.1% in the world. Other Asia (excluding China and Japan) also sustain high

growth rate of 5.9% per year because of recovery

Latin America, East Europe,Middle East and Africa will show higher growth rates

than the past because of shift to liberalism (East Europe) and progress by

stabilization of political situation (Latin America, Middle East and Africa).

13

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1980 1985 1990 1995 2000 2005 2010 2015 2020

N.AMERICA

REAL GDP FORECAST

CALENDAR YEAR

W.EUROPE

GDP(1990 US$ Billions)

ASIA

AFRICA

L.AMERICA

M.EAST

OCEANIA

FORECASTACTUAL

JAPAN

CHINA

E.EUROPE

Page 14: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

14

2.93.1

2.3 2.2

0.3

1.7

2.4

3.3

2.7

8.9

6.0

3.2

2.3

4.7

2.3

3.0 2.9

4.5

2.62.2

7.1

5.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

WORLD N.AMERICA L.AMERICA W.EUROPE E.EUROPE AFRICA M.EAST OCEANIA JAPAN CHINA ASIA

1981-2000 2001-2020

REAL GDP GROWTH FORECASTAve.Annual

Growth Rate(%)

Page 15: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

3. 3 Trend of Yield

Airline's yield is deeply related with operating cost which mainly consist with fuel

cost, crew expense, maintenance cost and ownership cost.

Main factors for the reduction in fare in the past 20 years, were a reduction of

operating cost by using the new developped fuel efficient airplanes with

technology advancement and airlines efforts on rationalization. Though these

factor will be main drives of recuction in fare in future, but the change will be not

so much as compared with the past.

Thus world average yield was declined at 4.0% per year since 1980, it will

continue to decline but its rate, 1.3% per year for the next 20 years, is significantly

lower than the past trend.

As the yield for North American airlines is lower than the world average, it will

decline at 1.0% per year for the next 20 years. Yield for Western Europe airlines,

which is higher level now, will decline at 1.5% per year in the future.

15

0.0

5.0

10.0

15.0

20.0

25.0

1980 1985 1990 1995 2000 2005 2010 2015 2020

YIELD FORECAST1999 Cent/RPK

CALENDAR YEAR

WORLD

N.AMERICA

W.EUROPE

1981-2000 2001-2020N.AMERICA -2.4% -1.0%W.EUROPE -4.2% -1.5%WORLD -4.9% -1.3%

AVE.ANNUAL GROWTH RATE

FORECASTACTUAL

Page 16: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

3. 4 Passenger Traffic

Since 1981, average growth of the world air passenger traffic was 5.8% per year.

For the next 20 years, it will be 4.6% per year and traffic volume will reach 2.5

times as much as 2000 traffic, that said, approximately 7.9 trillion RPK in 2020.

This forecast is based upon the historical progression of technology for the

subsonic transports and their operations but not upon the possible passenger

stimulation by advent of the commercial tilt-rotor plane in the short range market

or the supersonic transport in the long range market.

The traffic growth in North American airlines will be lower than the world

average and their share in the world air traffic will decrease from 38% to 30%.

European airlines will perform nearly the world average growth and maintain their

share of 30%.

16

N.AMERICA

EUROPE

ASIA / PACIFIC

OTHERS

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

1980 1985 1990 1995 2000 2005 2010 2015 2020

2456

2294

2308

819

1221

965

709

293

FORECASTACTUAL

3188

7876

YEAR 2000

YEAR 2020

YEAR1980

1038

AIR TRAFFIC FORECAST

RPK(BILLIONS)

AVERAGE ANNUAL GROWTH RATE(%)1981-2000 2001-2020

N.AMERICA 4.9 3.6EUROPE 6.1 4.4ASIA / PACIFIC 7.9 6.1OTHERS 4.5 5.3TOTAL WORLD 5.8 4.6

TOTAL WORLD

2000

1%

3%

4%

5%

3%

2%5%

9%

30%W.EUROPE W.EUROPE

E.EUROPE

E.EUROPE

ASIA

ASIA

OCEANIA

OCEANIA

CHINA CHINA

JAPAN

JAPANM.EAST

M.EASTAFRICA

2%AFRICA

L.AMERICA

L.AMERICA

30%

EUROPE

ASIA / PACIFIC

22%

OTHERS9%

2020

1%

4%

7%

5%

3%

6%

14%

28%

ASIA / PACIFIC

29%

OTHERS10%

N.AMERICA

38%

N.AMERICA

30%

29%

EUROPE

Page 17: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

Asia/Pacific airlines, especially Asia which is represented China and

NIES/ASEAN, were maintained their traffic growth at over 10% per year since

1980. For the next 20 years, their traffic will grow at 6.1% per year, and their share

will increase from 22% to 29%.

Japanese airlines will become a matured market, and the traffic will grow at 3.9%

per year, that is lower growth rate than the past.

African airlines traffic will not grow so much in spite of economy growth. Middle

East airlines traffic will maintain their growth as the past due to continuous

political unrest. Latin America will grow their traffic than the past because of

stabilization of the politic situation and the economy. East European airlines will

not grow their traffic so much despite the progress of shift to liberalism.

17

5.8

4.94.4

6.3

2.0

3.4

5.4

6.2 6.1

7.6

4.6

3.6

5.7

4.44.1 3.9

5.4 5.2

3.9

7.3

20.1

6.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

1981-2000 2001-2020

WORLD TRAFFIC GROWTH FORECASTRPK GROWTH/YEAR (%)

WORLD N.AMERICA L.AMERICA W.EUROPE E.EUROPE AFRICA M.EAST OCEANIA JAPAN CHINA ASIA

Page 18: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

4. Available Seat kilometer

The required ASK (Available Seat Kilometers) which carries forecasted RPK are

calculated by following formula.

ASK = RPK / Load Factor

4.1 Load Factor

Average load factor in worldwide airlines increased from 62% in 1980 to 70% in

2000.

It will go up to 74% in 2020, because airlines will strive to improve their load

factor by using revenue managing system, internet booking system, and offering

the same good quality service through alliance.

Considering the change of timely demand in a day and seasonable demand in a

year, average load factor for a year will be 70 to 75%. Higher load factor over 80%

spills passengers in crowded conditions, and lower load factor results poor

revenues .

18

50.0

55.0

60.0

65.0

70.0

75.0

80.0

85.0

90.0

1980 1985 1990 1995 2000 2005 2010 2015 2020

N.AMERICA

W.EUROPE

JAPAN

ASIA

WORLD

LOAD FACTOR FORECAST BY REGION%

ACTUAL FORECAST

Page 19: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

4. 2 ASK Forecast by Regions

Since 1981, ASK growth rate for the worldwide airlines was 5.0%, slightly lower

than RPK growth. For the next 20 years, ASK will grow at 4.4% per year with load

factor improvement.

Growth rate for North American airlines will be 3.3% per year much less than the

world average growth, and will reduce their share in future. European airlines keep

modest growth of 4.2% per year. Asia/Pacific airlines will continue high growth

rate of 5.7%, but it is less than the past one.

19

0

2000

4000

6000

8000

10000

12000

1980 1985 1990 1995 2000 2005 2010 2015 2020

AVE.ANNUAL GROWTH RATE (%)

1981-2000 2001-2020

N.AMERICA 4.0 3.3

EUROPE 5.3 4.2

ASIA / PACIFIC 7.7 5.7

OTHERS 4.1 4.8

TOTAL WORLD 5.0 4.4

N.AMERICA

EUROPE

ASIA / PACIFIC

OTHERS

1715

1335

1031

452

4534

WORLD

2000

3281

3063

3134

1161

10640

1694

ASK FORECAST BY REGIONASK (BILLIONS)

CALENDAR YEAR

FORECASTACTUAL

2020

1980

Page 20: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

4. 3 ASK Share by Market Segment

Air traffic grows at different growth rate in each region, and also in each route

distance category. It is need the ASK share by route distance to calculate ASK

forecast divided into regions and distance categories.

According to the present timetable of regional airplanes, turboprops are mainly

operated under 1,000km routes, regional jets are operated under 2,000km, and

narrowbody jets excluding regional jets are operated under 4500km. Thus, the

market is divided into following 4 categories by the route distance.

Long-range : over 4,500km

Middle-range : 2,001 to 4,500km

Short-range : 1,001 to 2,000km

Regional : under 1,000km

20

0

100000

200000

300000

400000

500000

600000

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 11000 12000 13000 14000

Widebody JetNarrowbody Jet (excl.RJ)Regional JetTurboprop/Piston/Heli

Non-stop Route Range - G.C. (km)

ASK DISTRIBUTION BY RANGEYearly ASK (MILLIONS)

Long RangeMediumShortRegional

Source : OAG MAX Database, Sep.,2000

TY

O-P

AR

TY

O-L

ON

TY

O-N

YC

TY

O-C

HI

LON

-SIN

HK

G-S

FO

LAX

-SY

D

NY

C-J

NB

AT

L-JN

B

TY

O-L

AX

TY

O-S

EA

TY

O-S

FO

CH

I-H

NL

MIA

-PA

R

NY

K-P

AR

LON

-NY

C

LON

-RO

MC

HI-

NY

C

TY

O-S

PK

HK

G-T

PE

NY

C-L

AX

HN

L-LA

X

CH

I-LA

XT

YO

-HK

G

4500

km

2000

km

1000

km

DF

W-L

AX

Page 21: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

For the last 20 years, long-range market is expanding its share compared with other

market, and medium-range and regional market shares are shrinking

One of the reasons is long-range market was expanded because of the

improvement of airplanes range capability and popularization of overseas travel.

In future, the long-range market will be matured as same as the short-range's, and

the regional market will be active again, then ASK share in each market will stay

constant level

21

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

1980 1985 1990 1995 2000 2005 2010 2015 2020

ASK SHARE BY ROUTE DISTANCEASK SHARE (%)

24.1

21.0

26.0

29.0

19.5

20.3

21.9

38.2

17.1%

20.7%

21.2%

40.9%

Under1000km

1001-2000km

2001-4500km

Over 4501km

Page 22: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

4. 3 ASK Forecast by Region and Range

Dividing the Regional ASK into these route distance categories, domestic market

in North American airlines is shown under 4,500km range, will be projected about

3/4 of ASK, in European and Asia/Pacific airlines, the half of ASK will be

occupied by the long-range market. In Others airlines, long-range market share will

be 30% of ASK in 2020.

22

316 454271

532206

586

252

428

820

229

616 514

235

552

1139

367 471

259

419

869

699

1548

489

1558

416

9891

169

168

110

136

153

0

500

1000

1500

2000

2500

3000

3500

2000 2020 2000 2020 2000 2020 2000 2020

N.AMERICA EUROPE ASIA / PACIFIC OTHERS

Under 1000km

1001-2000km

2001-4500km

Over 4501km

1715

3281

1335

3063

1031

3129

452

1161

ASK (BILLIONS)

ASK FORECAST BY REGION AND RANGE

2000 4,533 BILLION ASK2020 10,635 BILLION ASK

Page 23: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

5. Fleet and Delivery Forecast

5.1 Improvement of Airplane Utilization

Airplane utilization in terms of yearly airplane flight distance has gradually

increased with some fluctuation. This fluctuation was resulted from imbalance

between supply and demand of airplanes to meet with traffic volume. This trend of

increase will continue at 0.3% per year for the next 20 years, and yearly jet

airplane flight distance will reach 1.841 million km in 2020. For turboprop

airplane, an improvement of the utilization is assumed as same as jet.

23

JET AIRPLANE UTILIZATION

1.0

1.2

1.4

1.6

1.8

2.0

1980 1985 1990 1995 2000 2005 2010 2015 2020

CALENDAR YEAR

Airplane Kmper Airplane per Year(Mil. Km)

Source : ICAO Scheduled Data

ACTUAL FORECAST

Ave. Growth Rate0.3% p.a.

2001-2020Ave. Growth Rate

0.3%

1.841

1.724

Page 24: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

5. 2 Trend of Airplane Size

When the passengers are increased, airline increase the frequency and/or airplane

size to expand the capacity (ASK). Trends of airplane size growth vs. ASK growth

in each region and range for the past are analyzed, and apply them to the forecast.

Average seats per ASK in world major markets between 1992 and 2000 are

trending to decrease except in Intra-Europe market. In Pacific market and Europe -

Asia/Pacific market wchich were mainly operated by the largest B747, the average

seats are large, but in Atlantic Market, many widebody twin jets such as B767 and

A310 were operated already in 1992, the average seat is small.

In North American airlines, average seat per ASK for the long-range market that is

mainly including atlantic routes, declined during 1988 to1992 due to appearance of

long range medium size airplanes such as B767/A310, and after that average seat

increased slowly by introducing big twin jets such as B777. Average seats per

ASK for medium-range and short-range which are almost US domestic routes,

were unchanged or declined slightly. For regional market, it declined for recent

years due to expansion of new regional jets.

24

127117

206

288

372380

125 124

203

277

349337

0

50

100

150

200

250

300

350

400

INTRA N.AMERICA

INTRAEUROPE

INTRAASIA / PACIFIC

NOTRH ATLANTIC

PACIFIC EUROPE-ASIA / PACIFIC

1992 2000

TREND OF AVERAGE SEAT BY WORLD MAJOR MARKETAVE. SEAT

Page 25: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

In West European airlines, average seat per ASK for long-range market declined in

1992, then increased recently as same as North American airlines. But airplane size

for medium-range market for Middle East and North Africa routes, still declined,

meanwhile, it is unchanged for short-range and slightly declined for regional

market

25

TREND OF AVERAGE SEAT - W.EUROPE

10

100

1000

10000 100000 1000000 10000000

AVERAGE SEAT

ASK (MILLIONS)

LR

MRSR

RG

'20 (FORECAST)'00

'74 '92

TREND OF AVERAGE SEAT - N.AMERICA

10

100

1000

10000 100000 1000000 10000000

AVERAGE SEAT

ASK (BILLIONS)

LR

MR

SR

RG

'20 (FORECAST)'00

'74 '92

Page 26: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

In Asian airlines, airplane size for long-range market, which includes Pacific and

European routes, is already increased to nearly 400 seats and constant recently. It

means that the large airplanes such as 747 are mainly operated, because the routes

are concentrated in the major cities of each country compared with North America

and West Europe. The same trends are seen in medium/short-range and regional

market.

Trend of average seat per ASK during 1992 to 2000 is obtained by following

formula in each region and range category, and we assume that the trends will

continue in future.

Here, ß shows between -0.2 to 0.2 in the trend, this means up to 20% of ASK

growth depend upon the aircraft size growth.

26

Avrage seat in 2000 ASK in 2000 ß

Averge seat in 1992 ASK in 1992= ( )

TREND OF AVERAGE SEAT - ASIA / PACIFIC

10

100

1000

1000 10000 100000 1000000

AVERAGE SEAT

ASK (BILLIONS)

LR

MR

SR RG

'20 (FORECAST)'00

'74'92

Page 27: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

5. 3 Retirement of Existing Fleet

The average life of passenger jet is trending 20 to 29 years for past years, that

includes a passenger jet retirement for freighter conversion. 93% of current fleet

are manufactured after 1960, therefore, average life of a passenger jet airplane is

assumed 28 years. Hushkitted airplane is extended its life more 5 to 10 years

according to the trend. However, hushkitted airplanes will retire in the next 20

years of the forecast, it will effect to yearly demand but total demand.

Model curve for a passenger jet retirement is based on a standard diviation curve.

27

0.00

0.25

0.50

0.75

1.00

0 5 10 15 20 25 30 35 40 45

1949-1959 manufactured 10061960-1969 manufactured 10001970-1979 manufactured 21181980-1989 manufactured 39141990-1999 manufactured 6820FREIGHTER20-YEAR MODEL CURVE28-YEAR MODEL CURVE34-YEAR MODEL CURVE

20

27

AVERAGE34 YEARS

TREND OF JET AIRPLANE RETIREMENTSURVIVAL RATE

AGE OF AIRPLANE

1999 Year-end Fleet

29

Page 28: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

For the next 20 years, 6,900 jets (55%) will retire, so that 5,600 units of existing

12,500 units will remain in 2020. About 80% of existing 100 - 119 seat jets such as

old B737-200 and DC-9-30 will disappear for the period. Massive retiement of

2,700 units will be forecasted for 120 - 169 seat jets.

Over 170 seat jets and 20 - 59 seat regional jets which are rather young, will not

retire so much.

28

0

2000

4000

6000

8000

10000

12000

14000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

CALENDAR YEAR

20-59席

60-99席

100-119席

120-169席

170-229席

230-309席

310-399席

400-499席

JET AIRCRAFT RETIREMENT FORECAST BY SIZEUNITS

2000 end 2020 end '01-'20Retirement400-499 747 283 464310-399 917 532 385

WB

230-309 1241 541 700170-229 1030 548 482120-169 5098 2413 2685100-119 1815 323 1492

Nar

row

B.

60-99 831 317 51420-59 867 670 197 TOTAL 12546 5627 6919

Ave.Retiremnet 28 years

Page 29: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

5. 4 Jet Airplane Backlog

At the end of 2000, passenger jet backlog for over 30-seater stand at 4,460 units,

and 85% of them are narrowbodies which include 1,350 regional jets. The majority

(83%) of backlog will be delivered within 5 years.

29

0

200

400

600

800

1000

1200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Over 400 Seater310-399 Seater230-309 Seater170-229 Seater120-169 Seater100-119 Seater60-99 Seater20-59 Seater

JET AIRPLANE BACKLOG AND ESTIMATED DELIVERY SCHEDULE

UNDECIDED

1115

UNITS

DELIVERY YEAR

Source : Airclaim, as of 2000 Year-end Excludes Freighters

959

762

543

334

243

124

46 30 13

291

TOTAL 4,460

Page 30: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

5. 5 Current and Future Airplane Model

5. 5. 1 Jet Airplane

5. 5. 2 Turboprop Airplane

30

A/C Size ManufacturerRange

CapabilitySalesTerm

Comments

20-39 328JET 30 * F.DORNIER RG 1999-SEATER ERJ-135 37 * EMBRAER RG 1999-40-59 528JET 55 * F.DORNIER RG 2005-SEATER ERJ-140 44 * EMBRAER RG 2001-

ERJ-145 50 * EMBRAER RG 1997-CRJ-200 50 * BOMBARDIER RG 1992-

60-79 728JET 70 * F.DORNIER RG 2003-SEATER CRJ-700 70 * BOMBARDIER RG 2001-

ERJ-170 70 * EMBRAER RG 2002-80-99 928JET 90 * F.DORNIER RG 2005-SEATER ERJ-190 70 * EMBRAER RG 2004-

RJ85/RJX85 85 * BAe RG 1993-RJ100 100 ** BAe RG 1993-CRJ-900 86 * BOMBARDIER RG 2002-YSX 80 ** BOEING/JAPAN RG 2005-YSXS 97 ** BOEING/JAPAN RG 2005-

100-119 A318 115 ** AIRBUS SR 2003-SEATER B717 105 ** BOEING SR/MR 1999-

B737-600 108 ** BOEING SR/MR 1998-120-169 A319 124 ** AIRBUS SR/MR 1996-SEATER A320 150 ** AIRBUS SR/MR 1988-

B737-700 127 ** BOEING SR/MR 1998-B737-800 160 ** BOEING SR/MR 1998-B737-900 177 ** BOEING SR/MR 2001-

170-229 A321 180 ** AIRBUS SR/MR 1993-SEATER B757-200 186 ** BOEING SR/MR 1983-

B757-300 186 ** BOEING SR/MR 1999-230-309 B767-200/200ER 224 ** BOEING SR/MR/LR 1982-SEATER B767-300/300ER 269 ** BOEING SR/MR/LR 1986-

B767-400ERX 303 ** BOEING SR/MR/LR 2000-A300-600 266 ** AIRBUS SR/MR -2010A310-200/300 220 ** AIRBUS SR/MR/LR 1983-A330-200 256 *** AIRBUS SR/MR/LR 1998-A330-500 222 *** AIRBUS SR/MR/LR 2004-

310-399 A330-300 295 *** AIRBUS SR/MR/LR 1993-SEATER A340-200 263 *** AIRBUS MR/LR -2001

A340-300 295 *** AIRBUS MR/LR 1993-A340-500 313 *** AIRBUS MR/LR 2001-A340-600 380 *** AIRBUS MR/LR 2001-B777-200/X 368 *** BOEING SR/MR/LR 1995-B777-300/X 394 *** BOEING SR/MR 1998-

400-499 B747-400/ER 416 *** BOEING SR/MR/LR -2007SEATER B747-X 430 *** BOEING SR/MR/LR 2007-Over 500 B747-X STRETCH 504 *** BOEING SR/MR/LR 2005-SEATER A380-800 555 *** AIRBUS SR/MR/LR 2006-

A380-900 656 *** AIRBUS SR/MR/LR 2010-

* : 1 Class, ** : 2 Class, *** : 3 Class

Airplane Model Seats

WID

EB

OD

Y J

ET

NA

RR

OW

BO

DY

JET

A/C Size Model Seats Manufacturer Rage Capability

15-19 METRO 19 * SWEARINGEN RG 2001 -SEATER BE1900 19 * RAYTHEON RG 2001 -

FD228 19 * F.DORNIER RG 2001 -20-39 FD328 30 * F.DORNIER RG 2001 -SEATER EMB-120 30 * EMBRAER RG 2001 -

DHC8-100 30 * BOMBARDIER RG 2001 -40-59 DHC8-300 50 * BOMBARDIER RG 2001 -SEATER ATR-42 42 * ATR RG 2001 -60-79 ATR-72 70 * ATR RG 2001 -SEATER DHC8-400 70 * BOMBARDIER RG 2001 -

Sales Term

Page 31: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

5. 6 Assumption of Turboprop and Jet share in small airplane market

The regional jet operations are spreading widely in United States and Europe in

recent years, because of passenger preference and advent of competitive jet with

turboprop.

According to the recent trend for the small airplane order, jet airplanes are selected

more than 70% of them. In our forecast, a possibility of jet selection is assumed

60% for the demand generated from present turboprop market.

31

0

50

100

150

200

250

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

728JET

ERJ170

F70

RJ70

CRJ700

DHC8-400

ATR72

60-79 SEATER

TURBOPROP

JET

UNITS

0

100

200

300

400

500

600

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

ERJ145

ERJ140

CRJ100/200

Saab 2000

F50

DHC8-300

ATR42

40-59 SEATER

TURBOPROP

JET

0

50

100

150

200

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

ERJ135

328JET

Saab340

Do328

CN235

EMB120

DHC8-100/200

20-39 SEATER

TURBOPROP

JET

CALENDAR YEAR

TURBOPROP vs. JET ORDERS IN SMALL AIRCRAFT MARKET

Page 32: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

5. 7 Jet Fleet and Deliveries Forecast

The world jet fleet exists 12,500 units in 2000 , that is 2.3 times of the fleet size in

1980.

That fleet is projected to increase to 26,200 units in 2020, it is twice of the existing

fleet, and 20,500 units are forcast to add as new deliveries and 6,900 old airplanes

will be retired for this period.

Two-third of total fleet will be narrowbody airplane and remaining one-third will

be widebody airplane.

<By airplane size>

The 120 - 169 seater market is projected 8,300 units and accounts for the largest

fleet of the total. This market requires 5,100 new deliveries such as A319/A320

and B737 families.

The regional jet market of under 99 seater, has a demand of replacement for

turboprops and a demand for transferred routes from major airlines by appearance

of economical regional jets. The 20 - 59 seater market is mainly existing CRJ and

ERJ, 900 jets are operated now, will need 3,000 units in 2020. The 60 - 99 seat

32

0

5000

10000

15000

20000

25000

30000

1980 1985 1990 1995 2000 2005 2010 2015 2020

WORLD JET FLEET FORECAST

20-59 SEATER

60-99 SEATER

100-119 SEATER

OVER 400 SEATER

120-169 SEATER

170-229 SEATER

230-309 SEATER

310-399 SEATER

UNITS

ACTUAL FORECAST26152

12546

18329

5563

7689

RETAINED

NEW DELIVERY

328JET/428JET,ERJ135/145,CRJ200

CRJ700/900,BRJ-X,YSX

717,737-600A318

728JET/928JET,ERJ170/190,Avro RJ

737-700/800/900A319/A320

757

A310767

A340777

747XA3XX

727-200,737-300/400A320,MD80/MD90

DC8,707

747DC10,MD11L1011

767

727-100,737-100/200/500,TRIDENT,DC9S

BAC111,F28/F70/F100,DC9

A321

A300

A330

747

A310A300

Page 33: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

market, it has some developing airplanes now, will need 3,500 units in 2020

compared with 800 units now.

The 100 - 119 seater, included 717 and shrink derivatives such as A318 and 737-

600, is considered to a minimum size market for major airlines. The fleet of this

market is projected to grow slightly from 1,800 jets in 2000 to 2,500 jets in 2020.

The 170 - 229 seater market, that is the largest size category as a narrowbody jet,

has a potential demand for replacement for the biggest market of 120 - 169 seater

now. The fleet is expected to 2,500 in 2020 from 1,000 in 2000.

In the widebody market, the fleet of 230 - 309 seater such as 767 class is 1,200 and

the fleet of 311 - 399 seater is 900 in 2000. These airplanes are expected to grow as

a major airplane for major domestic routes and international routes, especially the

310 - 399 seater is projected to grow faster for replacement of existing 747 and

new market for long-range routes. And they will be 2,400 and 2,600 in 2020.

The large airplanes over 400 seater included 747 are mainly operated for Pacific

routes and Asia - Europe routes. The fleet for this market is projected to grow

slowly to 1,300 in 2020 from 700 units in 2000.

33

867 670 831

1815

5098

2413

1030548

1241541

917532 747

2282 3167

2165

5910

1980 1892 2079

1050

2833233170

1000

2000

3000

4000

5000

6000

7000

8000

9000

2000 2020 2000 2020 2000 2020 2000 2020 2000 2020 2000 2020 2000 2020 2000 2020

JET FLEET AND DELIVERY FORECAST BY SIZE

RETAINED

NEW DELIVERY

867

2952

831

3484

1815

2488

5098

8323

1030

2528

1241

2433

917

2611

747

1333

20-59SEATER

728Jet / 928JetCRJ-700/900ERJ-170/190

A318B717B737-600

A319 / A320B737-700/800/900

A321B757

A300 / A310A330-200/500B767

A330-300A340B777

A380B747B747X

328Jet / 528JetCRJ-100/200ERJ-135/140/145

60-99SEATER

100-119SEATER

120-169SEATER

170-229SEATER

230-309SEATER

310-399SEATER

OVER 400SEATER

TOTAL FLEET2000 Year-end: 12,546 UNITS2020 Year-end: 26,152 UNITS

2001-2020 Deliveries20,525 UNITS

WIDEBODYNARROWBODY

REGIONAL JET

FUTUREAIRCRAFT

UNITS

Page 34: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

<By airlines domiciled regions>

North American airlines are now operating 43% (5,300 units) of worldwide fleet

and will need 8,700 airplanes in 2020. They will receive 6,500 new airplanes (32%

of total delivery) consist of 5,600 narrow-bodies and 900 wide-bodies year 2001 to

2020.

European airlines will increase their fleet from 3,400 units in 2000 to 7,700 units in

2020 and they will need 5,800 airplanes shared 29% of total deliveries for this

period. They are split off approximately a quarter for widebodies and three

quarters for narrowbodies.

Though Asia/Pacific airlines are operating only 17% (2,200 airplanes) of the world

fleet at the present, they will operate 5,700 airplanes in 2020 caused by higher

traffic growth rate than the others. Total regional deliveries for the next 20 years

will be 4,600, and nearly half of total regional deliveries will be widebody

airplanes. They will need large airplanes for long-range, 62% (650units) of total

world deliveries for over 400 seat market (1,050 units) will be required by this

region.

34

Aircraft Size(Seats)

Aircraft2000 year-end

Fleet2020 year-end

Fleet2001-2020Deliveries

20-59328JET/528JET, CRJ-200,ERJ-135/140/145

867 2,952 2,282

60-99728JET/928JET, AVRO RJ,CRJ-700/900, ERJ-170/190,YSX/YSXS

831 3,484 3,167

100-119 A318, B717/B737-600 1,815 2,488 2,165

120-169A319/A320,B737-700/800/900

5,098 8,323 5,910

170-229 A321, B757-200/300 1,030 2,528 1,980

230-309A300-600, A310-200/300,A330-200/500,B767-200/300/400

1,241 2,433 1,892

310-399A330-300,A340-200/300/500/600,B777-200/300

917 2,611 2,079

400-499 B747-400, B747X 747 721 438

Over 500 A380-100/200, B747X ST 0 612 612

TOTAL 12,546 26,152 20,525

Page 35: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

35

21871804

1110526

6514

5848

4593

357016662170

3427

5283

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2000 2020 2000 2020 2000 2020 2000 2020

RETAINED

JET FLEET AND DELIVERY FORECAST BY REGIONUNITS

NEW DELIVERY

8701

N.AMERICA EUROPE ASIA / PCIFIC OTHERS

7652

5703

4096

TOTAL FLEET2000 YEAR-END : 12,546 UNITS2020 YEAR-END : 26,152 UNITS  2001~2020 DELIVERIES

20,525 UNITS

OTHERS13%

OTHERS16%

N.AMERICA43%

N.AMERICA33%ASIA / PACIFIC

17% ASIA / PACIFIC22%

EUROPE27% EUROPE

29%

JET FLEET SHARE BY REGION

2020 Year-end : 26,152 Units

2000 Year-end : 12,546 Units

Page 36: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

36

957560 526

1261

1008

361530

738

734

423

2120

1793

993

1006

537

577

543

495

434

625

507

914

646

240

271

322340

350

308

235

113

56

0

1000

2000

3000

4000

5000

6000

7000

N.AMERICA

UNITS

EUROPE ASIA / PACIFIC OTHERS

OVER 400 SEATER310-399 SEATER

230-309 SEATER170-229 SEATER

120-169 SEATER

100-119 SEATER

60-99 SEATER

20-59 SEATER

JET DELIVERY FORECAST BY REGION / SIZE

6514

5848

4593

3568

2001-2020 DELIVERIES20,525 UNITS

JET AIRPLANE DELIVERY SHARE BY REGION(2001 - 2020)

TOTAL 20,525 UNITS

ASIA / PACIFIC22%

N.AMERICA33%

OTERS17%

EUROPE28%

Page 37: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

<Yearly delivery>

Yearly jet delivery experienced big up and down from 250 units at the bottom in

1984 to 1,100 units at the peak in 1999 for the past 20 years by the airline's

financial conditon and traffic growth.

Future yearly delivery will decrease to 700 units by 2005 as a reaction of recent

massive deliveries and then it will gradually increase to 1,300 units by 2020.

Average yearly deliveries for the next 20 year will be 1,030 airplanes. This

projection is not considered manufacturer's production capability, but according to

the actual delivery of 1,100 units included regional jets in 1999, 1,300 units

production a year is not an unrealistic value.

37

0

200

400

600

800

1000

1200

1400

1980 1985 1990 1995 2000 2005 2010 2015 2020

OVER 400

310 - 399

230 - 309

170 - 229

120 - 169

100 - 119

80 - 99

60 - 79

40 - 59

20 - 39

YEARLY JET AIRCRAFT DELIVERY FORECASTUNITS AIRCRAFT SIZE

(SEATS)

ACTUAL FORECAST

Page 38: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

<Sales Forecast>

The 20,500 jet airplane deliveries to the world airlines are expected to reach $1,173

billion (2000 US$) over the next 20 years.

The largest market (29%) in unit will be 120 - 169 seater category, but in dollar

value, 310 - 399 seater category will be the largest one (23%).

The portion of widebody airplane in unit will represent a quarter of total,

nevertheless it will be shared 55% in dollar value.

38

2282

3167

2165

5910

1980 1892

1050

2079

0

1000

2000

3000

4000

5000

6000

7000

20-59SEATER

60-99SEATER

100-119SEATER

120-169SEATER

170-229SEATER

230-309SEATER

310-399SEATER

OVER 400SEATER

JET AIRCRAFT SALES FORECAST BY SIZE(2001 - 2020)UNITS 2000 Price

($ Billions)

0

100

200

300

400

500

600

35.9

78.568.6

236.4

102.7

175.3

279.6

196.3

TOTAL20,525 UNITS$1173 Billions

AIRCRAFT SIZE

NARROWBODY WIDEBODY

JET DELIVERY SHARE BY SIZE

60-99SEATER

15%

20-50SEATER

11%

100-119SEATER

11%

2001-2020  20,525 UNITS

JET AIRPLANE SALES SHARE BY SIZE

120-169SEATER

20%

120-169SEATER

29%

170-229SEATER

9%

170-229SEATER

10%

230-309SEATER

15%

230-309SEATER

9%

310-399SEATER

23%

310-399SEATER

10%

100-119 SEATER6%

60-99SEATER

7%OVER 400 SEATER

17%

OVER 400 SEATER5%

20-59 SEATER3%

US$1,173 BILLIONS

Page 39: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

5. 8 Turboprop Fleet and Deliveries Forecast

The passenger turboprop fleet for world airlines exists 4,600 units in 2000 , that is

2.1 times of the fleet size in 1980.

The routes for turboprop in 2000 are almost categorized to the regional market

which includes under 1,000km routes, and the traffic is projected to grow at 3.9%

per year for the next 20 years. But many of over 20 seater turboprop airplanes will

be replaced by regional jets, therefore the fleet of turboprops will shrink to 3,900

in 2020..

Assuming the average life of a turboprop is 28 years by the trend, two-third or

3,070 units of the current fleet will be retired during the forecast period. The

deliveries of the turboprops will be 2,300 units for the period.

39

0

1000

2000

3000

4000

5000

6000

1980 1985 1990 1995 2000 2005 2010 2015 2020

TURBOPROP FLEET FORECASTUNITS

15-19SEATER

20-39SEATER

40-59SEATER

OVER 60SEATER

RETAINED

NEW DELIVERY

4649

3913

2220

4532

3686

ACTUAL FORECAST

JET STREAM31, DHC6BE99/MOD1900,METRO,EMB110

JET STREAM41,CN235SD330/360SAAB340

748,F27/F50SAAB2000DHC8-300

DHC8-300ATR42

FD328,DHC8-100EMB-120

FD228,METROMOD1900

ATR72,DHC8-400

Page 40: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

< By airplane size >

The 15 - 19 seater market is the only viable market for the turboprop airplane. This

market is expected to the largest market for the turboprops because it has no

regional jet, but some of them will be replaced by 20 - 39 seater jets.

Almost of the deliveries for the 20 - 39 seater and the 40 - 59 seater market will be

replaced by the regional jet, the fleet of turboprops for these market will shrink to

60 - 80% of present level.

In the over 60 seater market, only about 350 turboprops are operated, and a high

speed turboprop such as DHC8-400 is developed and just introduced to replace the

old turboprops. However, it is not clear how many turboprops will be required in

future as compared with the regional jets. The fleet of this market is projected to

grow slightly to 500 in 2020.

40

1841

450

1349

586

1111

359 348

186

1199

473

344

316

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2000 2020 2000 2020 2000 2020 2000 2020

1841

1649

1349

10591111

703

348

502

15-19 SEATER 20-39 SEATER 40-59 SEATER OVER 60 SEATER

TURBOPROP FLEET AND DELIVERY FORECAST BY SIZEUNITS

TOTAL FLEET2000 Year-end: 4,649 UNITS2020 Year-end: 3,913 UNITS

2001-2020 DELIVERIES2,332 UNITS

Page 41: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

< Deliveries by region >

The North American airlines which have many regional airlines, will be required

29% or 690 units of the total delivery for next 20 years. The Asia/Pacific and the

European airlines will occupied 24% or 560 units and 21% or 480 units. The rest

of world airlines will be required 26% or 610 units.

The yearly delivery was over 200 units in past 20 years, but it will decline to 100

units because many turboprops will be shifted to regional jets.

41

700

433

213 235

685

555

481611

1056

805

1057

1737

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2000 2020 2000 2020 2000 2020 2000 2020

RETAINED

TURBOPROP FLEET AND DELIVERY FORECAST BY REGIONUNITS

NEW DELIVERY

1385

N.AMERICA EUROPE ASIA / PACIFIC OTHERS

TOTAL FLEET2000 YEAR-END 4,655 UNITS2020 YEAR-END 3,913 UNITS  2001-2020 DELIVERIES

2,332 UNITS

988

694

846

Page 42: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

42

383

238 222

356

162

90 97

124

66

12082

76

74

107

80

55

0

100

200

300

400

500

600

700

800

N.AMERICA EUROPE ASIA / PACIFIC OTHERS

UNITS

TURBOPROP DELIVERY FORECAST BY REGION AND SIZE

685

555

481

611

15-19 SEATER

20-39 SEATER

40-59 SEATER

OVER 60 SEATER

2001-2020 DELIVERIES2,332 UNITS

0

50

100

150

200

250

300

350

400

450

500

1980 1985 1990 1995 2000 2005 2010 2015 2020

OVER 60 SEATER

40-59 SEATER

20-39 SEATER

15-19 SEATER

YEARLY TURBOPROP AIRCRAFT DELIVERY FORECASTUNITS

ACTUAL FORECAST

Page 43: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

< Sales Forecast >

The 2,300 turboprop airplane deliveries to the world airlines are expected to reach

$17.3 billion (2000 US$) over the next 20 years. Compared with the jet market, the

turboprop deliveries are just 11% in unit and 1.5% in sales value.

The 15 - 19 seater will be the largest market in unit, and required 1,200 units which

are 51% of total.turboprop deliveries. The 20 - 39 seater market will be required

470 units (20%), the 40 - 59 seater will be 340 units (15%), and the over 60 seater

will be 320 units (14%).

In sales values, the over 60 seater which is the highest airplane price, will be $5.1

billions or 29% of total sales of turboprops. The other market will be about $4

billions each, which will be occupied 21 to 25% of total.

43

1199

473

316344

0

200

400

600

800

1000

1200

1400

15-19 SEATER 20-39 SEATER 40-59 SEATER OVER 60 SEATER

AIRCRAFT SIZE

TURBOPROP SALES FORECAST(2001-2020)

UNITS 2000 US$ BILLIONS

4.43.7

4.1

5.1

0

4

6

8

10

2

TOTAL2,332 UNITS

US $131 BILLIONS

12

14

Page 44: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

6. Engine Market Forecast

The engine's delivery is estimated only from the equipped engines for new airplane

delivery and their spares which are assumed 15% of equipped engines.

The spare engines for existing fleet are not included for this forecast.

6.1 Engine Category and Equipped Airplanes

44

THRUSTCATEGORY(x1000 lb)

ENGINE NAMEMANU-FACTURER

THRUST(x1000 lb)

EQUIPPED AIRPLANE (NO. OF ENGINE)

65 - 115 CF6-80E1 GE/SNECMA 67.5 - 72 A330(2)

GE90 GE/SNECMA 75 - 115 B777(2)

GP7000 GE/PW 67 - 75 A380(4), B747X(4)

PW4074/4084 PW 74 - 84 B777(2)

PW4168 PW 68 A330(2)

TRENT 700 RR 64 - 75 A330(2)

TRENT 800 RR 75 - 95 B777(2)

TRENT 900 RR 68 - 84 A380(4), B747X(4)

35 - 65 CF6-50 GE/SNECMA 46.5 - 54 B747(4), A300(2)

CF6-80A GE/SNECMA 48 - 50 B767(2), A310(2)

CF6-80C2 GE/SNECMA 52.5 - 61.5 B747(4), B767(2), A300(2), A310(2), MD-11(3)

JT9D PW 43.6 - 56 B747(4), B767(2), A300(2), A310(2)

PW4000 PW 52 - 68 B747(4), B767(2), A300(2), A310(2), A330(2),

MD-11(3)

RB211-524G/H RR 58 - 60.6 B747-400(4), B767-300(2)

TRENT 500 RR 56 A340-500/600(4)

PW2000 PW 38.2 - 41.7 B757(2)

RB211-535C/E4 RR 37.4 - 43.1 B757(2)

12 - 35 V2500 IAE 22 - 30 A319(2), A320(2), A321(2), MD-90(2)

CFM56 CFM INT'L 18.5 - 34 B737-300/400/500(2), B737-600/700/800/900(2)

A318(2), A319(2),A320(2), A321(2), A340-200/300(4)

JT8D-200 PW 18.5-21 MD-80(2)

PW6000 PW 20 - 23 A318(2)

BR700 BMW/RR 18.5-22 717(2)

-12 LF507 TEXTRON 7 BAe146(4),Avro RJ(4)

CF34 GE 8.6 - 9.2 CRJ-100/200(2), CRJ-700(2), CRJ-900(2), ERJ-170(2)

ERJ-190(2),528JET(2), 728JET(2),928JET(2)

AE3007 ALLISON 7.2-12 ERJ-135(2), ERJ-140(2), ERJ-145(2)

PW300 PWC 4.2 - 5.7 328JET(2)

Turboprop GMA2100 ALLISON 4152 - 6000 SHP DHC8-400(2)

CT7 GE 1870 SHP DHC8-100(2)/300(2)

PW100 PWC 1800 - 2750 SHP ATR42(2), ATR72(2),

DHC8-100(2)/300(2), EMB120(2)

TPE 331 GARRETT 715 SHP CASA212(2), Metro(2), Do228(2)

Page 45: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

6.2 Engine Deliveries Forecast

Engine deliveries for the next 20 years will be 52,770 units for jet and 5,360 units

for turboprop.

They will be $2.78 billions and $4 billions in dollar value respectively.

The largest engine market category in unit will be 12,000 - 35,000 lb class which

are equipped by A320 and B737 series, and they represent 43% of total engine

market.

In sales value, 65,000.- 100,000 lb class of the largest size and higher price, which

are equipped by A330/A380 and B777/B747X, will be the largest one.

45

5364

13365

22663

8014 8729

0

5000

10000

15000

20000

25000

T/P <12 12-35 35-65 65-100 (1000 LB)

A330A380B777B747X

A300/A310/A340B747/B757/B767

A318/A319/A320A321/A340B757/B767/B737

328JET/528JET728JET/928JETAvro RJCRJ-200/700/900EMB135/145/170/190

1900, MetroATR42/ 72,CN235, DHC- 8Do228/ 328EMB-120

ENGINE DELIVERY FORECAST(2001 - 2020)

NO. OF ENGINE

NUMBER OF ENGINE

NO.OF ENGINE

SALES VALUE($ B)

TURBOPROP 5,364 4JET 52,771 278

TOTAL 58,135 282

0

25

4

27

91

64

96

50

75

100

125

SALES VALUE

SALES VALUE(2000 US $ B)

Page 46: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

7. Forecast Methodology

The methodology adapted is a regionally and range segmented top-down approach

and is not reliant on the fleet plan of individual airlines.

Segmented ASK distributions by aircraft size are calculated by using OAG

schedule data, and make them to base year's ideal ASK distributions by moving

average method.

Required ASK distribution in future is calculated by using the base year's ideal

ASK distribution and the growth rates of ASK. Then, shift of aircraft size is

considered to link with ASK growth in each segment.

The required ASK will be filled by ASK of retained fleet considered with the

retirement, and the rest will be delivery ASK. After the ASK of backlog aircraft to

be delivered will be excluded from the delivery ASK, the rest will be new delivery

(open) ASK.

The open ASK will be assigned to new aircraft which will be available in the

forecast year, and suitable in size and range. At the same time, it will be also

considered the market share of the aircraft manufacturer. And number of new

aircraft will be calculated from the ASK assigned.

46

AircraftOperating Range

Analysis

Utilization,Block SpeedAssumption

GNP ForecastHistorical

FleetData

OrderedAircraftData

Open ASK(10 Regions and 4 Range Categories)

Air Traffic(10 Regions)

Yield ForecastLoad FactorAssumption

AircraftRetirementAssumption

ASK Forecast

Historical ASKvs.

Size

FutureRetained

Fleet

RPK Forecast

FutureRequired ASK

vs. Size

Retained ASKvs.

Size

Open ASKvs.

Size

Fleet Forecast

New AircraftSales

Forecast

Manufacturer'sMarketShare

AircraftEvaluation

Aircraft Sales Forecast

World Fleet Forecast System Flow

Page 47: Worldwide Market Forecast for Commercial Air Transport - 2001-2020

The Worldwide Market Forecast for Commercial Air Transport 2001 - 2020

can be found on the internet at : http//www.iijnet.or.jp/jadc/jadc_home.htm.

For more information and questions about this doccument, contact

[email protected] by e-mail.

47