Global Market Forecast. Flying by Numbers

Transcription

1 Global Market Forecast Flying by Numbers

2 002 Introduction WE ARE FOCUSED ON OUR LONG-TERM FUTURE MORE THAN EVER BEFORE. Fabrice Brégier CEO Airbus For this year s Global Market Forecast we have chosen the theme of equations and numbers. It seemed appropriate as the economists and data analysts working on Airbus forecasts spend much of their day either searching for and evaluating new, complementary and relevant sources of data; then trying to find ways to use these numbers more effectively to improve the reliability and validity of our analyses and forecasts. They rely daily on equations and ever more capable software tools to achieve this. But more than this, a key part of their work is to check and challenge the methodologies used and the analyses produced against real world behaviours of passengers and airlines alike. Their aim is to identify a market-based vision of air transport over the next 20 years backed up by rigorous data, clear graphics and industry insight. The numbers resulting from our equations will in time become real passengers and aircraft, and their worldwide flows will drive aviation infrastructure and investment. It may sound a little geeky to quote the philosopher and mathematician Plato, but he got it right when he said A good decision is based on knowledge and not on numbers Our aim is to apply knowledge to numbers and through the GMF to share this with you. We hope that you find the 2015 Global Market Forecast informative and useful. We seek to improve our analyses continually, and your questions, challenges and suggestions help us advance towards that goal. Don t forget you can download our App in several formats from tablet to smartphone. It complements the forecast and includes our thoughts in an interactive format. As usual this is best read on an aeroplane, perhaps taking advantage of the quiet, smooth comfort of your next A380 flight. Enjoy!

3 Executive summary 004 Demand for air travel 012 Demand for passenger aircraft 042 Demand by region 050 P.052 Asia-Pacific P.056 Europe P.060 North America P.064 Middle East P.068 Latin America & Carribbean P.072 CIS P.076 Africa Summary & methodology 088 Network and traffic forecast 018 Freighter forecast 080

4 Executive summary

5 Passenger traffic growth next 20 years 4.6% AAGR Freight traffic growth 4.4% AAGR Passenger fleet , , ,395 Passenger deliveries (> 100 seats) ,781 New freighters Passenger & New freighter deliveries ,585 Freighter fleet , ,687 +1,054 Traffic > double Pax fleet > double Demand for 32,585 New pax & Freight aircraft Value of Demand $4.9 trillion

6 World annual traffic (trillion RPK) ICAO total traffic Airbus GMF Air traffic has doubled every 15 years AIR TRAFFIC WILL DOUBLE IN THE NEXT 15 YEARS Sources: ICAO, Airbus GMF 2015 RPK = Revenue Passenger Kilometers x 2 Air traffic will double in the next 15 years % PASSENGER AND FREIGHTER DELIVERIES New Deliveries 32,600 GMF year new deliveries of passenger and freighter aircraft 2,5000 2,0000 1, ,900 DEMAND FOR SOME 32,600 NEW PASSENGER AND FREIGHTER AIRCRAFT Source: Airbus Notes: Passenger aircraft 100 seats Freighter aircraft 10 tonnes 1,0000 5,000 8,100 Fleet in service evolution: ,000 35,000 38,500 0 Single-aisle Twin-aisle 1,600 Very Large Aircraft 30,000 25,000 20,000 19,000 19,500 Growth 32,600 New aircraft % units % value 70% 45% 25% 43% 5% 12% 15,000 10,000 5,000 0 Beginning ,100 5, Replacement Stay in service SINGLE-AISLE: 70% OF UNITS; WIDE-BODIES: 55% OF VALUE Passenger aircraft ( 100 seats) and jet freight aircraft (>10 tons) Source: Airbus GMF May 2015

7 SHARE OF NEW DELIVERIES AFRICA ,117 3% ASIA- PACIFIC 4,986 7,610 12,596 39% 31,781 New Deliveries 32, CIS ,288 4% EUROPE 3,375 2,990 6,365 20% LATIN AMERICA 1,111 1,399 2,510 8% MIDDLE EAST 1,174 1,187 2,361 7% NORTH AMERICA 2,972 2,572 5,544 17% Passenger Fleet Remarketed & stay in service 3,968 11,834 Converted 1,552 Retired 13,135 1,301 Freighter Fleet FREIGHTERS % WORLD 15,118 17,467 32, % NEW AIRCRAFT DEMAND PASSENGER AND FREIGHTERS DEMAND FOR MORE THAN 32,500 NEW AIRCRAFT Passenger aircraft ( 100 seats) and jet freight aircraft (>10 tons) Passenger traffic to grow at 4.6% per year to 2034 Traffic to double in the next 15 years as in the past Giving 15.2 trillion RPKs by 2034 Domestic China to become the largest single passenger traffic flow International long haul traffic expected to grow faster than domestic and international short-haul, taking a 45% share by 2034 Most deliveries to go to Asia-Pacific, 12,596 passenger and freighter aircraft North America and Europe 37%, or 11,909 aircraft 1,552 passenger aircraft forecast to be converted to freighters Nearly 14,000 aircraft will be retired to be replaced by more eco-efficient types Asia-Pacific alone to take 39% deliveries North America/Europe 37% deliveries Single-aisle 70% of deliveries Wide-body 55% by value 11,834 Pax aircraft Replaced by more Eco-efficient types

8 Demand for air travel

9 KEY DRIVERS FOR AIR TRAFFIC GROWTH Economic growth Increasing urbanisation Expanding middle class Rise in international students, migration and tourism Trade Growing mega-cities, centres for people, wealth, and aviation Liberalisation and bi-lateral air service agreements AIR TRANSPORT GROWTH IS HIGHEST IN EXPANDING REGIONS EMERGING/ DEVELOPING China India Middle East Asia Africa CIS Latin America Eastern Europe 6.3 billion people 2014 Yearly RPK growth % More than 2,550 BILATERAL AIR SERVICE AGREEMENTS BETWEEN MORE THAN 170 COUNTRIES, ALMOST 15,000 POSSIBLE COUNTRY-PAIRS LIBERALISATION AND GLOBALISATION HAVE DRIVEN WORLD TRAFFIC GROWTH Sources: ICAO WASA database, Airbus Number of bilateral air services agreements in the World ADVANCED Western Europe North America Japan 1 billion people 2014 Yearly RPK growth % 3,000 2,500 2,000 1,500 1,

10 Economic and population growth in emerging markets will help to drive traffic growth beyond more mature markets The middle classes set to double in emerging markets, also global share of private consumption in emerging markets set to grow from 31% today to 43% in 3034, both factors to drive aviation growth Liberalisation and visa process simplification stimulating air traffic growth By 2034, on a per capita basis, the people of China will be flying as much as European s today More than 2,500 air service agreements between +170 countries enables almost 15,000 possible city pairs MIDDLE CLASS TO GROW, DOUBLING IN EMERGING COUNTRIES Sources: Oxford Economics, Airbus GMF 2015 * Households with yearly income between $20,000 and $150,000 at PPP in constant 2014 prices Emerging countries North America Europe Propensity to travel 74% OF THE POPULATION OF THE EMERGING COUNTRIES WILL TAKE A TRIP A YEAR IN 2034 Middle Class*, millions of people 5,000 History 4,000 3,671 Forecast 4,721 BY 2034, PRC WILL REACH CURRENT EUROPEAN LEVELS Sources: Sabre, IHS Economics, Airbus GMF ,000 2,000 1,000 0 World population 1,792 1, ,703 2, , , ,400 7,200 8,000 8,600 % of World population 28% 37% 46% 55% 2034 trips per capita 100,00 10,00 1,00 0,01 0,10 0,00 Europe 2.24 trips per capita PRC 1.09 trips per capita India 0.30 trips per capita North America 2.16 trips per capita real GDP per capita (2010 $US thousands at Purchasing Power Parity)

11 Network and traffic forecast

12 DESPITE A MAJOR CRISIS IN 2008, AIRLINES HAVE OFFERED MORE SERVICES* TO THEIR CUSTOMERS Notes: as of September *Service is defined as a new airport pair or a new airline operating an existing airport pair Sources: OAG, Airbus The network is constantly evolving More routes, bigger existing routes, more connectivity By 2034, 70% of network growth and 84% of total RPKs will be centred on todays routes/network Aviation Mega-Cities (AMCs) big today, bigger tomorrow More than 90% of international long-haul flying centred on just 47 cities 22% of global GDP focused on the AMCs, helping drive the share of higher yield passenger up from these cities As traffic grows and O&D between the big points concentrates, congestion is an issue at many key airports The trend to larger aircraft helping, more larger aircraft to come The A380 for example, already proven it helps increase pax, reduce airline costs, and free up slots at congested airports ASKs: +57% Services: +31% City pairs: +26% Base 100 in More services SINCE %

13 Aviation Mega-Cities 47 AVIATION MEGA-CITIES IN 2014 Sources: McKinsey, UNPD, Airbus GMF , ,000 AVIATION MEGA-CITIES M 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

14 % OF TRAFFIC GROWTH UNTIL 2034 WILL COME FROM THE EXISTING NETWORK Source: Airbus GMF 2015 Growth from new routes Growth from existing network Base year Traffic Monthly Trillion RPK NEW SERVICES Source: Airbus

15 THESE AIRPORTS ARE ALREADY LARGELY CONGESTED Sources: IATA WSG database, Airbus GMF 2014 Aviation Mega-Cities *Aviation Mega-Cities International Airports 39 OUT OF THE 47 AVIATION MEGA CITIES ARE SCHEDULE- CONSTRAINED TODAY 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

16 MORE SEATS, MORE SEATS FILLED, MORE MOVEMENTS & MORE CONNECTIVITY, BUT In the last 30 years: Airport movements up nearly 2.5 times Airport connectivity almost doubled Offered seats per aircraft have nearly doubled Worldwide average load factor ~80%, up 17 percentage points since 1980 However since 2000: Average kilogrammes of fuel per passenger trip is down a third Therefore CO per passenger trip is also down a third MORE MOVEMENTS, MORE CONNECTIVITY Sources: OAG, Airbus GMF 2015 Airport movements Avg. number of movements per airport 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 x Airport connectivity Avg. number of destinations per airport x

17 LESS FUEL AND LESS CO! MORE PRODUCTIVE SEATS Sources: OAG, Ascend, ICAO, Airbus GMF 2015 LESS FUEL BURN, THEREFORE LESS EMISSIONS Sources: ICAO, IATA, Airbus GMF 2015 Yearly offered seats per aircraft Avg. number of yearly offered seats per aircraft (000) 250 Fuel consumption Kliograms per passenger trip (avg.) % % Load factors World passenger load factors (%) 85% Co2 emissions Kliograms per passenger trip (avg.) % % 75% 70% 65% +17 percentage points % % 50 50%

18 PASSENGER TRAFFIC FORECAST 4.6% PER ANNUM ( ) Aviation remains resilient to crises, growing 85% since 2001 Domestic China will be the largest flow by 2034, forecast to grow nearly four times Half of the top 20 traffic flows will include Asia-Pacific Airlines in the Asia-Pacific will fly 36% of total traffic, North American and European airlines forecast to fly 38% of RPKs combined Middle Eastern carriers will grow from an 9% share to 13% of traffic in the next 20 years Despite perturbations Airbus historical traffic forecasts continue to track the long term trend World traffic Domestic USA Intra Western Europe Western Europe - USA Domestic Asia Emerging Western Europe - Middle East Domestic India Indian Subcontinent - Middle East PRC - USA Western Europe - South America Asia Emerging - Western Europe South America - USA Domestic Brazil Western Europe - PRC Indian Subcontinent - USA Central Europe - Western Europe Australia & New Zealand - Western Europe Middle East - USA Sub Sahara Africa - Western Europe Asia Advanced - Asia Emerging Annual O&D traffic per flow (billion RPK) Domestic PRC x3.8 x1.4 x1.7 x1.7 x3.7 x2.4 x5.8 x3.4 x4.1 x2.2 x2.4 x2.8 x2.9 x3.0 x3.8 x2.5 x2.4 x4.1 x2.5 x ,000 1,200 1,400 1,600 1, % GROWTH SINCE 9/11 World annual traffic (trillion RPK) AIR TRAVEL HAS PROVED TO BE RESILIENT TO EXTERNAL SHOCKS Sources: ICAO, Airbus GMF 2015 RPK = Revenue Passenger Kilometer DOMESTIC PRC WILL BE THE LARGEST O&D TRAFFIC FLOW IN 2034 Source: Airbus GMF 2015 Asia-Pacific leading growth % % OF THE TOP TWENTY TRAFFIC FLOWS WILL INVOLVE ASIA-PACIFIC

19 ASIA-PACIFIC TO LEAD IN WORLD TRAFFIC BY 2034 Source: Airbus GMF traffic traffic 20-YEAR WORLD ANNUAL TRAFFIC GROWTH 4.6% RPK traffic by airline domicile (billions) 0 1,000 2,000 3,000 4,000 5,000 6,000 % of 2014 world RPK 20-year growth % of 2034 world RPK Asia-Pacific 29% 5.7% 36% Europe 25% 3.6% 21% North America 25% 2.5% 17% Middle East 9% 6.7% 13% Latin America 5% 5.2% 6% CIS 4% 4.9% 4% Africa 3% 5.3% 3%

20 GMF long term validity GMF 2000 LONG TERM FORECAST IS STILL IN LINE WITH OUR LATEST FORECAST DESPITE UPS AND DOWNS GMF TRAFFIC FORECASTS TRACK THE LONG TERM TREND Sources: ICAO, Airbus GMF 2015 GMF 2000 GMF 2015 GMF World annual traffic (RPKs - trillions) Historical

21 PASSENGER TRAFFIC FORECAST Traffic between emerging markets forecast to grow the fastest at 6.6% AAGR. They will also have the largest share of RPKs with 36% Advanced to Emerging traffic flows will also grow strongly at 5.0% AAGR between 2014 and 2034 Traffic to and from the emerging regions will account for 70% of World RPKs by 2034 International long haul traffic will continue to represent about 45% of the World RPKs in the next 20 years, and will grow most strongly at 4.7% AAGR to 2034 EMERGING REGIONS WILL DRIVE WORLD TRAFFIC GROWTH TRAFFIC FROM / TO / WITHIN EMERGING REGIONS WILL ACCOUNT FOR 70% OF WORLD RPKs 2034 Long-Haul demand leads the market INTERNATIONAL LONG-HAUL TRAFFIC WILL CONTINUE TO REPRESENT ABOUT 45% OF WORLD RPKs IN THE NEXT 20 YEARS EMERGING REGIONS WILL ACCOUNT FOR THE LARGEST SHARE OF ORIGIN AND DESTINATION TRAFFIC WORLDWIDE Source: Airbus GMF % 90% 80% Share of the World traffic by type of flow (RPKs) 32% Advanced - Emerging 34% AAGR +5.0% INTERNATIONAL LONG-HAUL TRAFFIC WILL STILL REPRESENT THE LARGEST SHARE OF TRAFFIC WORLDWIDE Sources: ICAO, Sabre GDD, Airbus GMF 2015 Long-haul: O&D distance >2000 NM World annual traffic (trillion RPK) 16 ICAO Airbus total traffic GMF % AAGR International Short-Haul +4.5% 70% 60% 50% 40% 30% 43% Advanced - Advanced 30% +2.6% % 32% 32% Domestic +4.5% International Long-Haul +4.7% 20% 10% 25% Emerging- Emerging 36% +6.6% 2 44% 45% 0%

22 FREIGHT TRAFFIC FORECAST Freight traffic (main deck and belly hold) will grow on average 4.4% per annum over the next 20 years As for passenger traffic, growth involving the emerging markets will be strong, with 6.1% AAGR between emerging countries, and between advanced and emerging 80% of all freight traffic is linked to these emerging markets Annual growth rate % INCLUDES BELLY AND MAIN DECK 500 Billion Freight tonne kilometres Growth Rate History Forecast Advanced Advanced 2.6% 300 Emerging Emerging 6.1% 200 Advanced Emerging 4.9% 80% 100 Emerging Advanced 4.9%

23 Demand for passenger aircraft

24 Average aircraft size is increasing Average aircraft size per flight has grown from 139 seats to over 170 seats since the early 1970 s A second period of average aircraft size growth is beginning with today s backlog Single-aisle aircraft range from 100 to 240 seats, with the A321 offering this highest seating configuration, with the possibility on the range side of flying 4000nm For wide-body types there is operational overlap with the single-aisle, with lower seating limits around 200 seats increasing to 600 or even higher with the A380 This overlap has developed as the capability of both segments of today s aircraft have grown, leaving an already seamless coverage between the single-aisle and widebody markets With international long-haul traffic growing the fastest, the big points like Aviation Mega-Cities will grow in importance. This will have an effect on the size and type of aircraft selected by airlines in the coming years WIDE-BODIES OFFER 10% OF SEATS OPERATED BELOW 2,000NM Note: September 2014 Sources: OAG, Airbus 100% 90% 80% 70% Share of global seats offered Wide-Bodies operates 10% of seats below 2,000nm AVERAGE AIRCRAFT CAPACITY PER FLIGHT HAS INCREASED OVER TIME Sources: Airbus, OAG September month for each year Average capacity per flight, aircraft above 100seats % 50% % Single-Aisle Wide-Body % % 10% Single-Aisle operates 15% of seats over 2,000nm % 0 Sector Length (nm)

25 AMC to AMC TO REPRESENT 77% OF ALL LONG HAUL TRAFFIC Aviation Mega-City to Aviation Mega-City Aviation Mega-City to Secondary City Secondary City to Secondary City Sources: Sabre (September 2014 data), Airbus 1,800 Monthly international long-haul passengers (Millions) 1,600 1,400 1,200 1, Long-haul, flight distance >2,000nm, excl. domestic traffic 2034

26 GLOBAL NETWORK 34% 7% 59% NORTH AMERICA 1% 85% 14% EUROPE 3% 79% 18% 13% CIS 2% 85% 14,116 (44%) 5,544 (17%) LCCs 1% 88% 11% 6,365 (20%) MIDDLE EAST 16% 38% 1,288 (4%) ASIA-PACIFIC 5% 66% 29% LATIN AMERICA & CARIBBEAN 1% 79% 20% AFRICA 3% 75% 22% 12,596 (40%) 9,321 (29%) OTHERS* 2% 76% 22% 2,510 (8%) 1,117 (4%) 46% 1,117 (7%) 8,345 (26%) *Charters, Regional, Small and Major network airlines VLA TA SA New deliveries 31,781 aircraft 1,275 7,579 22,927 New deliveries by neutral category 1,296 3,478 7,459 US$ 2.2 trillion 6,872 3,822 2,574 2,610 1,463 US$ 2.0 trillion 932 1, VLA US$ 0.5 trillion Fleet evolution 17,354 Beginning ,395 13,386 3, Growth Replaced Stay in service & remarketed 35,749 Market value US$ 4.7 trillion 10% 43% 47%

27 Demand by region

28 Asia-Pacific will continue to lead world economic growth, both in terms of real GDP with an average growth of 4.5% per year and in trade with an average of 5.3% growth per year Asia developed countries delivered 39% of the total traffic to/ from/within Asia-Pacific in 2004, today it accounts for 28% of the total traffic Conversely, PRC has increased its share of the region s traffic from 23% in 2004 to 31% in 2014 Airlines domiciled in the PRC increased their market share from 26% of Asia-Pacific s total Available Seat Kilometres (ASK) in 2004 to 33% in 2014 Ten of the top 20 traffic flows forecast include Asia/Pacific Asia-Pacific have experienced growth in low cost operations in recent years The Indian subcontinent and Asia emerging countries LCCs have captured ~60% of the total domestic traffic Asia- Pacific In more mature markets in the region the LCC share is significantly smaller ~25% share 12,596 NEW DELIVERIES 37% REPLACEMENT 63% FOR GROWTH 33% WILL BE TWIN-AISLE WITH MANY OF THESE TO BE USED ON MEDIUM RANGE OPERATIONS, AS WELL AS LONG-HAUL

29 Results North America 4.9% Europe 4.4% Middle East 6.3% CIS 5.9% Asia- Pacific 6.0% Africa 7.3% Latin America 5.9% Domestic and Intra-Regional Real Trade 5.3% Intra-regional & domestic 6.0% Inter-regional 5.1% Fleet in service ,275 13,222 Real GDP 4.5% Total traffic 5.6% 20 year new deliveries 12,596 Fleet in service evolution Fleet size* 13,222 5,275 Growth 7,947 New deliveries 12,596 Replacement 4,649 New deliveries by segment Number of new aircraft 8,329 2,554 1, % 6.4% Total RPK traffic growth 4.1% Asia- Pacific World 4.8% 4.6% 5.6% * Passenger aircraft 100 seats ** CAGR Beginning Stay in service & Remarketed 626 Single- Small Intermediate Aisle Twin-Aisle Twin-Aisle Very Large

30 Whilst the Eurozone economy has had difficulty gaining momentum, consumer spending is accelerating Air transport is a core industry in Europe. In 2014, it accounted for 4.1% of the region s GDP, supporting more than 12 million jobs according to a recent ACI report Tourism is a major driver for European international traffic. The UNWTO reported that Europe attracted 588 million visitors in 2014, a 4% increase versus 2013 Over the next 20 years, we forecast that the passenger traffic from / to / after the to i.e. to / within the region will grow at a yearly average rate of 4.6% in Central Europe, and 3.3% in Western Europe Europe leads the long haul market. 60% of the World s long haul flights (those over 6000km) depart or arrive in Europe Europe s average propensity to travel in 2014 was 1.2 trips per capita (The US stands at 1.6 trips per capita) Europe 6,365 NEW DELIVERIES 51% REPLACEMENT 49% FOR GROWTH 79% WILL BE SINGLE- AISLES DUE TO THE EUROPEAN POPULATION LANDSCAPE

31 Results Europe 2.9% CIS 4.6% North America 2.8% Middle East 4.6% Asia- Pacific 4.4% Africa 4.7% Latin America 3.5% Domestic and Intra-Regional Real Trade 3.4% Intra-regional & domestic 2.9% Inter-regional 3.9% Real GDP 1.7% Total traffic 3.6% Fleet in service evolution Fleet size* 7,208 4,093 Growth 3,115 New deliveries 6,365 New deliveries by segment Number of new aircraft 5,052 Total RPK traffic growth Europe World Fleet in service ,093 7, year new deliveries 6,365 Replacement 3, % 3.9% 4.1% 4.6% 3.6% 3.4% * Passenger aircraft 100 seats ** CAGR Beginning Stay in service & Remarketed 843 Single- Small Intermediate Aisle Twin-Aisle Twin-Aisle Very Large

32 Consumer spending sustained by strong employment growth, improved household finances, low gasoline prices, the housing market and capital expenditure recovery have helped drive US economic activity US real GDP growth is forecast to average 2.5% per year in the period, with greater business fixed investment and R&D spending offsetting the slowdown in labour force growth By 2034, North America is forecast to still account for 21% of the World economy (in real terms) For a third consecutive year, airlines in the region achieved collective profitability in 2014, this mainly due to effects of consolidation and lower fuel costs With the return of profitability in 2010, the number of single-aisle aircraft has increased and with a stabilisation in the number of twin-aisle aircraft meeting market needs North America The domestic US air transport market, the largest single market today, will remain enormous, and is forecast to be the second biggest flow in the world with 90 billion RPKs by 2034 Traffic between the US and China is forecast to be the most dynamic of the North American regions flows with an average yearly growth of 7.3% 5,544 NEW DELIVERIES 65% REPLACEMENT 35% FOR GROWTH 85% WILL BE SINGLE- AISLES DUE TO THE IMPORTANCE OF THE US DOMESTIC MARKET

33 Results North America 1.8% Europe 2.8% Middle East 7.1% CIS 4.4% Asia- Pacific 4.9% Africa 4.8% Latin America 4.5% Domestic and Intra-Regional Real Trade 4.6% Intra-regional & domestic 1.8% Inter-regional 4.2% Fleet in service ,182 6,095 Real GDP 2.5% Total traffic 3.4% 20 year new deliveries 5,544 * Passenger aircraft 100 seats ** CAGR Fleet in service evolution Fleet size* 4,182 Beginning ,095 Growth 1, New deliveries 5,544 Replacement 3,631 Stay in service & Remarketed 551 New deliveries by segment Number of new aircraft 4, Single- Small Intermediate Aisle Twin-Aisle Twin-Aisle 35 Very Large 5.0% 3.7% 4.1% Total RPK traffic growth North America World 3.1% 4.6% %

34 The region s medium-term economic outlook remains supported by its substantial petroleum resources, close proximity to energy-hungry Asian economies, growing tourism potential and strategically important geopolitical location Air transport has been both a major driver and indicator of the growing importance of the Middle East in the global economy Over the past ten years, Middle Eastern airlines have spearheaded growth in the region. They have extended their presence to five continents, enabling air traffic to grow twice as fast as the economy Since 2003 the capacity in terms of available seats has quadrupled to over 90 billion ASK The Middle East is the only region in the world where the twin-aisle fleet is bigger than the single aisle in numbers of aircraft This aircraft capacity has been a key enabler of airline growth in the region in recent years Middle East Long haul traffic has been growing at 11 percent over the past 20 years, outperforming short haul A third of all passengers travelling on Middle East carriers are on a connecting flights, but no necessarily connecting in the Middle East However, the share of connecting traffic passing through the Middle East, i.e. not starting or finishing the journeys there, is just 19% of the regions total origin and destination traffic 2,361 NEW DELIVERIES 25% REPLACEMENT 75% FOR GROWTH 62% WILL BE WIDE- BODIES DUE TO THE POSITION THE REGION IS CREATING FOR ITSELF AS A MAJOR GLOBAL HUB, AND THE SUCCESS OF ITS AIRLINES

35 Results North America 7.1% Europe 4.6% Africa 6.6% Middle East 5.8% CIS 5.3% Asia- Pacific 6.3% Latin America 7.7% Domestic and Intra-Regional Real Trade 4.2% Intra-regional & domestic 5.8% Inter-regional 6.0% Fleet in service ,018 2,792 Real GDP 3.8% Total traffic 6.0% 20 year new deliveries 2,361 * Passenger aircraft 100 seats ** CAGR Fleet in service evolution Fleet size* 1,018 Beginning ,792 Growth 1, New deliveries 2,361 Replacement 587 Stay in service & Remarketed 431 New deliveries by segment Number of new aircraft Single- Small Intermediate Aisle Twin-Aisle Twin-Aisle 377 Very Large 5.0% 7.1% 4.1% Total RPK traffic growth Middle East World 4.8% 4.6% %

36 Latin America & Caribbean The region s real GDP growth is expected to average 3.6% per year over the period, above that forecast globally Together with the regions large and growing urban populations propensity to travel in the region is expected to develop further, with countries like Chile, Brazil and Colombia, reaching the levels achieved by more mature economies by 2034 Traffic growth to/from/within Latin America and the Caribbean is expected to expand at an annual 4.7% rate, above the 4.6% world annual rate Three out of the top twenty largest traffic flows continue to be linked to the region Traffic within the region (domestic and intra-regional) will help to drive passenger growth, representing more than 35% of the total by 2034, above the current share which is ~30% The LCC s steady expansion was mainly concentrated on the Brazilian and Mexican domestic markets. It is expected however, that airlines offering low-cost services will find new markets, flying longer, thus also stimulating intra-regional traffic Between , airlines in the region have expanded their average aircraft size per single-aisle flight at an annual rate of 0.8%, close to the 0.9% registered worldwide over the same period 2,510 NEW DELIVERIES 39% REPLACEMENT 61% FOR GROWTH 79% WILL BE SINGLE- AISLES DRIVEN BY STRONG GROWTH IN AIR TRAVEL DOMESTICALLY AND AROUND THE REGION

37 Results North America 4.5% Europe 3.5% Middle East 7.7% CIS 5.3% Asia- Pacific 5.9% Latin America 5.3% Africa 5.0% Domestic and Intra-Regional Real Trade 4.2% Intra-regional & domestic 5.3% Inter-regional 4.3% Fleet in service ,266 2,801 Real GDP 3.6% Total traffic 4.7% 20 year new deliveries 2,510 * Passenger aircraft 100 seats ** CAGR Fleet in service evolution Fleet size* 1,266 Beginning ,801 Growth 1, New deliveries 2,510 Replacement 975 Stay in service & Remarketed 291 New deliveries by segment Number of new aircraft 382 1, Single- Small Intermediate Aisle Twin-Aisle Twin-Aisle Very Large 5.0% 4.9% Total RPK traffic growth 4.1% Latin America World 4.4% 4.6% %

38 CIS In 2014, a number of the countries in the region maintained solid economic performance. Uzbekistan and Moldovan real GDP grew by 6.9 percent and 4.3 percent respectively. In 2015, CIS countries excluding Russia will continue to grow at 2.4 percent according to the IMF In the longer term, air travel consistently outperforms the economy. Over the past fifteen years, real GDP grew on average at 4.3 percent, while traffic increased by 8.5 percent Travel and tourism have the potential to become a much stronger driver for the region s economies The share of Russian tourism in the world is less than one percent, while its economy represents 2.4 percent of global GDP Over the past ten years, the number of passengers flying to and from emerging economies has reached 34 million in 2013, compared to less than ten million in 2004 Travel to the Asia-Pacific from the region has increased by a multiple of four On average, the yearly growth in travel with developing markets was 15.8 percent, 4.3 percent above the rate with developed countries With further strengthening of trade with fast-growing economies the trend is likely to continue Preliminary figures for 2014 suggest that China is taking the lead in terms of tourist visits to Russia (10-15 percent growth). Inbound tourism from Korea has increased by 70 percent after a visa simplification process introduced in ,288 NEW DELIVERIES THE MAJORITY WILL BE FOR GROWTH 85% WILL BE SINGLE-AISLES THE CIS PASSENGER FLEET IS FORECAST TO MORE THAN DOUBLE TO 2,016 AIRCRAFT

39 Results North America 4.4% Europe 4.6% Middle East 6.6% CIS 4.3% Asia- Pacific 5.9% Africa 5.0% Latin America 5.3% Domestic and Intra-Regional Real Trade 2.0% Real GDP 2.1% Fleet in service evolution Fleet size* 2,016 New deliveries by segment Number of new aircraft 1,101 Total RPK traffic growth Intra-regional & domestic 4.3% Inter-regional 5.1% Fleet in service ,016 Total traffic 4.8% 20 year new deliveries 1,288 * Passenger aircraft 100 seats ** CAGR 922 Beginning 2015 Growth 1, New deliveries 1,288 Replacement 194 Stay in service & Remarketed Single- Small Intermediate Aisle Twin-Aisle Twin-Aisle Very Large CIS World 5.5% 5.0% 4.2% 4.8% 4.1% 4.6%

40 Covering about 30 million km2, Africa is comprised of 54 countries, more than any other continent, even surpassing Europe with 47, and Asia with 44 Africa s population doubled between according to the UN, and is today estimated at 1.1 billion representing approximately 15% of the World s population Growing faster even than China and India. It is estimated that one in five people will live in Africa by the end of our forecast period in 2034 There are 54 African cities with more than 1 million people and this number is forecasted to grow to 93 by 2030 According to the United Nations, the share of Africans living in urban areas will reach 50% by 2034 Inter-continental traffic with Africa is largely focused on Europe which accounts for almost 60% of the total In recent years, Asia-Pacific and the Middle-East have gained importance representing more than 33% of traffic in 2013 compared to 25% ten years ago Domestic traffic within African countries remains the primary market for African air travellers However, Intra-regional traffic between African countries has grown faster than domestic traffic over the last 10 years, supported by the growing African urban population and African intraregional trade Africa 11,117 NEW DELIVERIES 75% WILL BE SINGLE-AISLES AS INTER-REGIONAL FLYING GROWS 9% REPLACEMENT 91% FOR GROWTH FLEET SET TO GROW 170% BY 2034

41 Results North America 4.8% Latin America 5.0% Europe 4.7% Africa 6.4% Middle East 6.6% CIS 5.0% Asia- Pacific 7.3% Domestic and Intra-Regional Real Trade 5.0% Intra-regional & domestic 6.4% Inter-regional 5.5% Fleet in service ,615 Real GDP 4.6% Total traffic 5.6% 20 year new deliveries 1,117 * Passenger aircraft 100 seats ** CAGR Fleet in service evolution Fleet size* 598 Beginning ,615 Growth 1, New deliveries 1,117 Replacement 100 Stay in service & Remarketed 498 New deliveries by segment Number of new aircraft Single- Small Intermediate Aisle Twin-Aisle Twin-Aisle 31 Very Large 5.0% 6.2% 4.1% Total RPK traffic growth Africa World 5.1% 5.6% 4.6%

42 Freighter forecast

43 FREIGHT FORECAST 2014 After having stagnated for almost three years, the air freight industry resumed its progress in 2014 by posting 4.6% growth compared to 2013 In the summer of 2014, total air freight traffic surpassed the peak it reached in 2011 Air freight is forecast to grow at 4.4% over the next 20 years. This will be largely driven by emerging markets where both general and express cargo are expected to continue to expand Just over 50% of the cargo traffic in 2014 was transported in the belly hold of passenger aircraft, that is in the space below the main deck where passenger luggage is also stowed Due to the addition of more cargo capable passenger aircraft, the market share for belly capacity is expected to continue to grow in the future, especially on inter-continental traffic FREIGHTER DELIVERIES EXPRESS AND REGIONAL TRAFFIC WILL BOOST THE SMALL AND MID SIZE MARKET BELLY CAPACITY WILL DRAMATICALLY IMPACT LARGE FREIGHTER PROSPECTS FREIGHTER DELIVERIES OVER THE NEXT 20 YEARS Source: Airbus GMF 2015 Conversion and new build 1,200 1,129 1, Small freighters Mid-size freighters Large freighters

44 North America Europe & CIS Middle East 309 Asia-Pacific Latin America 89 Africa 50 World fleet , ,633 The North American fleet is mainly a replacement market THE FUTURE FREIGHTER FLEET DISTRIBUTION WILL REFLECT THE GROWING INFLUENCE OF EMERGING MARKETS Sources: Airbus GMF 2014, ASCEND The Asia-Pacific fleet is set to triple as a growth market

45 THREE KEY FUTURE TRENDS FOR THE CARGO INDUSTRY: Express will continue to develop more rapidly than general cargo, this driven by both international traffic and domestic and regional traffic in emerging regions such as China and South East Asia Medium haul regional traffic will surge with the development of cargo networks in regions such as intra-asia, within Africa and Latin America. This will drive the need for mid-sized freighter aircraft Belly capacity will continue to grow especially on long haul routes where new cargo friendly passenger wide-bodies are expected to progressively replace large freighters thanks to very competitive economics 2,355 Conversions & New build 74% Small & Mid-size deliveries Fleet to > Double

46 Summary & methodology

47 SUMMARY RESULTS NEW PASSENGER AIRCRAFT DELIVERIES BY REGION CONVERTED FREIGHT AIRCRAFT DELIVERIES BY REGION Africa Asia- Pacific CIS Europe Lat. & Caribb. Middle East North America 20 year new deliveries Africa Asia- Pacific CIS Europe Lat. & Caribb. Middle East North 20 year new America deliveries Single-Aisle 834 8,329 1,101 5,052 1, ,733 22,927 Small Small Twin-Aisle Intermediate Twin-Aisle Very Large Aircraft 194 2, , , , ,275 Mid-size Large TOTAL 1,117 12,596 1,288 6,365 2,510 2,361 5,544 31,781 TOTAL ,552 NEW FREIGHT AIRCRAFT DELIVERIES BY REGION NEW PASSENGER & FREIGHT AIRCRAFT DELIVERIES BY REGION Africa Asia- Pacific CIS Europe Lat. & Caribb. Middle East North America 20 year new deliveries Africa Asia- Pacific CIS Europe Lat. & Caribb. Middle East North America 20 year new deliveries Small Single-Aisle 834 8,329 1,101 5,052 1, ,733 22,927 Mid-size Large Small Twin-Aisle Intermediate Twin-Aisle Very Large Aircraft 198 2, , , , ,550 TOTAL TOTAL 1,130 12,813 1,312 6,453 2,542 2,457 5,878 32,585 Passenger aircraft 100 seats and freight aircraft 10 tons

48 SAFE HARBOUR STATEMENT Disclaimer This presentation includes forward-looking statements. Words such as anticipates, believes, estimates, expects, intends, plans, projects, may, forecast and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements made about strategy, rampup and delivery schedules, introduction of new products and services and market expectations, as well as statements regarding future performance and outlook. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include but are not limited to: Changes in general economic, political or market conditions, including the cyclical nature of some of Airbus Group businesses; Significant disruptions in air travel (including as a result of terrorist attacks); Currency exchange rate fluctuations, in particular between the Euro and the U.S. dollar; The successful execution of internal performance plans, including cost reduction and productivity efforts; Product performance risks, as well as programme development and management risks; Customer, supplier and subcontractor performance or contract negotiations, including financing issues; Competition and consolidation in the aerospace and defence industry; Significant collective bargaining labour disputes; The outcome of political and legal processes, including the availability of government financing for certain programmes and the size of defence and space procurement budgets; Research and development costs in connection with new products; Legal, financial and governmental risks related to international transactions; Legal and investigatory proceedings and other economic, political and technological risks and uncertainties. Any forward-looking statement contained in this presentation/publication speaks as of the date of this presentation/publication release. Airbus Group undertakes no obligation to publicly revise or update any forward-looking statements in light of new information, future events or otherwise. AIRBUS S.A.S Blagnac Cedex, France AIRBUS S.A.S All rights reserved, Airbus, its logo and the product names are registered trademarks. Concept design by Airbus Multi Media Support Photos by K. Ginn, P. Powietrzynski, M. Buschbell Steeger, BFG Images, Nikada, L. Patrizi, O. Korshakov, S. Ramadier, A. Doumenjou, C. Koshorst. Reference D issue 2. August, Printed in France by Art & Caractère. Confidential and proprietary document. This document and all information contained herein is the sole property of AIRBUS S.A.S. 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. This brochure is printed on Stucco Old mill - Premium white and Offset standard. This paper is produced in factories that are accredited EMAS and certified ISO , PEFC and FSC CoC. It is produced using pulp that has been whitened without either chlorine or acid. The paper is entirely recyclable and is produced from trees grown in sustainable forest resources. The printing inks use organic pigments or minerals. There is no use of basic dyes or dangerous metals from the cadmium, lead, mercury or hexavalent chromium group. The printer, Art & Caractère (France 81500), is engaged in a waste management and recycling programme for all resulting by-products.

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