World demand for commercial airplanes and aviation support ... · future of commercial airplanes and aviation support services. The sources used in the preparation of the Outlook

I N T O T H E N E W C E N T U R Y I N T O T H E N E W C E N T U R Y

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“Heavier-than-air flying machines are impossible.”

—Lord Kelvin,president of the Royal Society,

1895.

“Heavier-than-air flying machines are impossible.”

—Lord Kelvin,president of the Royal Society,

1895.


Boeing Commercial Airplanes Group

Marketing

September 2000

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Current Market Outlook 20002

Every year, Boeing publishes its latest assessment of the demand for world air travel. This assessment estimates the jet airplane capacity to meet the projected growth in travel demand, plus the replacement market for older in-service airplanes. As the aviationindustry has evolved to encompass new structures and markets, this year’s assessment hasbeen expanded to include the aviation services required to support the operation of theworld jet fleet. This document may be referenced as the Boeing world outlook for the future of commercial airplanes and aviation support services.

The sources used in the preparation of the Outlook included AEA, Airclaims, DOT Form 41, DRI-McGraw Hill, Jet Information Services, OAG, IATA, ICAO, AAPA,WEFA,and Boeing primary research. Historical data are estimates based on Boeing analyses. Data for 1999 are preliminary.

To celebrate the new century, this year’s Outlook includes photo montages illustrating the past, present, and future of five industry themes. In 1903, Orville Wright lifted one of the greatest inventions of the 20th century into the air. Travel by Air, at first for carryingthe wealthy, is today accessible to virtually everyone and everything. The Experience offlying now features the quiet efficiency of long-haul jets and amenities such as individualvideo screens and ergonomic seats. Infrastructure has evolved from primitive visualsystems to high-technology flying in all types of weather. Exploring The World Around Us

through the Internet, virtual reality, and global satellites inspires us to travel. Aviation will take us there. Finally, manufacture of The Airplane has advanced from hand-sewnwings to a partnership with computers and new composite materials.

The 2000 Current Market Outlook can also be found on the Internet at:http://www.boeing.com/commercial/cmo

Please take the time to fill out the reader response card at the back of the Outlook.We relysolely on this method to maintain an up-to-date mailing list for next year’s document.

For more information about the For more information about thedemand for air travel and airplanes, demand for aviation services,contact: contact:

Tim Meskill, Director John Griffiths, Senior ManagerMarket Analysis and Strategy Market Analysis and Strategy, Aviation ServicesBoeing Commercial Airplanes Boeing Commercial Airplanes

Telephone: 206-766-2503 Telephone: 206-766-2504Facsimile: 425-237-1706 Facsimile: 425-237-1706

Preface

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Executive Overview 6

Demand for Aviation Services 12

Scope of the Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Forces Driving the Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Market Segments for Commercial Aviation Support Services . . . . . . . .14

Demand for Air Travel 20

Current Position in the Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Trends from History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Future Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

Demand for Airplanes 32

The 20-Year Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

The Freighter Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

Appendices 40

A. World Traffic by Regional Flow . . . . . . . . . . . . . . . . . . . . . . . . . . .40

B. Airplane Deliveries and Support Services . . . . . . . . . . . . . . . . . . . .42

C. Results by Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

D. Results by Country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47

E. Market Outlook Regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48

F. Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49Ta

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Travel by Air. Once reserved for the wealthy,commercial flying today plays an essential role in the lives of countless people worldwide.

Travel by Air. Once reserved for the wealthy,commercial flying today plays an essential role in the lives of countless people worldwide.


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Executive Overview

For more than three decades, Boeing has published an assessment of themarket for commercial airplanes. In the past, the term market centeredexclusively on future airplane deliveries. As the world economy and theaviation industry have evolved to encompass new structures and markets, so must the focus of industry forecasts. This year’s Current Market Outlook

has been expanded to include all of the services required to supportthe efficient operation of the world jet fleet.

Boeing projections of air travel in the earliest editions of theCurrent Market Outlook portrayedgrowth in an era when virtually all air travel took place in a regu-lated environment. Today, the vast majority of travel takes place in a liberalized environ-ment. Countries have removedcompetitive restraints within theirnational boundaries, and airlinesare free to choose where to fly, how much service to provide, and how much to charge.

Economies around the world are undergoing fundamental change. Planned economies and government control of major industries such astelecommunications, oil and gas, utilities, and manufacturing are givingway to private ownership. Privatization of airlines, airports, and air trafficcontrol is increasing, often across country borders.

The global marketplace is becoming a reality. Countries continue tonegotiate unrestricted air service agreements with other countries aroundthe globe. More diverse and open international financial markets allowairlines more flexibility in their operations. Global alliances providebenefits of integration and scale to airlines and customers alike.

2000 2019

AviationSupport Services

Commercial Airplanes

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World Market Demand for Commercial Airplanesand Aviation Support ServicesDollars in billions, 1999

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These trends of deregulation, privatization, and globalization have fostered competition and forced airlines to operate at much higher levels of efficiency. Airlines are increasingly focusing on their core business ofattracting and keeping loyal customers, while seeking new ways to reducecosts. Emphasis is shifting to management of total life cycle costs. Airlines are looking for supplierswho can provide total solutionssuch as integrated systems,processes, and infrastructure to support the efficient use of airplane fleets.

Airline operating expenses includeall activities to attract customersand deliver passengers and cargo to their destinations. Embedded in these activities is a set of supportservices necessary to operateairline fleets effectively and disposeof surplus airplanes. In aggregate,support products and servicesgenerated more revenue for theirproducers in 1999 than even the$70 billion market for commercialjets. Boeing estimates sales in these markets totaled $87 billion in 1999.

The segments of the commercial aviation support services market arediverse in terms of sales, activity scope, capital intensity, and competitiveenvironment. They should grow at the rate at which the world airline fleetgrows or at the rate by which fleet utilization grows, depending on market segment.


Overall, Boeing expects the commercial aviation support market to be worth over $2.7 trillion between 2000 and 2019. Annual revenues will more than doubleto over $190 billion by 2019.

World airlines enjoyed a seventh consecutive year of profitability in 1999 in spite of rising fuel prices and weak yields in many markets. On the North Atlantic, withinEurope, and in North America,traffic growth, load factor, and yieldtrends signaled that airline profitshave reached a cyclical peak. SouthAmerican traffic flows and airlineprofitability suffered from theregion’s financial crises. Asiantraffic continued to recover from theslowdown of 1998. Yield recoverylagged but should rebound as Asianconsumer confidence continues togrow. Overall, world airlines shouldremain profitable in 2000. Theextent will depend on the industrymaintaining balance between addedworld capacity and traffic growth.Oil prices, continuing recovery inAsia and in South America, andongoing consumer confidence and economic strength in Europe, Australia, and North America will all play key roles in maintaining industry profitability.

In 1999, there were separate cycles for twin- and single-aisle airplanes. Asianairlines took delivery of twin-aisle, long-haul airplanes they had ordered before theeconomic crises. These twin-aisle deliveries created excess capacity, although mostof that imbalance has now been absorbed. Single-aisle deliveries peaked in 1999 inresponse to US noise limitations on older airplanes. Technical requirements causedthis peak, which did not represent an imbalance of capacity with demand. In total,the number of delivered seats of twin- and single-aisle airplanes combined was justmodestly above the historical trend. A cycle in airplane deliveries is underway, but it is mild and is not a result of mismatched capacity and demand.

20-Year Outlook—Support Services

Worldwide demand for commercial aviation support services, 2000–2019

The world fleet will grow to 31,755 passenger and cargo jets in 2019.

Total market potential for aviation support services is $2.7trillion as follows:

1999 US dollars, billions

■ Airplane servicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 441

■ Heavy airplane maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . .588

■ Engine repair (off wing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .268

■ Airframe component repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . .394

■ Major airplane modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43

■ Airframe and engine repair parts . . . . . . . . . . . . . . . . . . . . . . . . .257

■ Flight crew training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

■ Airport and route infrastructure services . . . . . . . . . . . . . . . . . . .622

■ Used airplane remarketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20


During the next 20 years, air travel will grow about two percentage points faster than economies will grow. This additional growth will be stimulated bylower fares, growing world trade, and service improvements such as increasedfrequencies and more direct service. World RPKs are expected to grow at 4.8%, with regional-flow forecasts varying from 2% to 8% growth. Europe and North America are matureeconomies with lower growth rates, although they will continue to take the most airplane deliveries.Asian economies, recovering fromthe earlier crises, will once againexperience above-average trafficgrowth and an increasing share ofairplane deliveries. Latin Americancountries are expected to recoverfrom recent financial crises and will experience some of the world’sfastest traffic growth rates.

The share of large airplanes in theworld fleet is projected to declinefrom 7% to 6%, the percentage ofintermediate-size airplanes willincrease from 19% to 22%, and theshare of single-aisle and regional jets will decline slightly from 74% to 72%. Asia-Pacific airlines will continue to receive the largest number of twin-aisle jets;whereas, North America will lead in regional and in single-aisle airplanes.

The 2000 Outlook includes a large number of regional jet deliveries. Smallregional jets are currently transforming the small-plane affiliates at major airlinehubs. The regional jets are replacing prop services, substituting for larger jetswith unprofitable loads and opening up new thin feeder markets at hubs. Most of the activity strengthens rather than substitutes for larger-jet service. In the21st century, air travelers will fly longer distances on more nonstops to morelocations than ever before.

20-Year Outlook—Airplanes

Economic and traffic growth, 2000–2019

Major projections for the 20-year period 2000 to 2019 are as follows:

■ Worldwide economic growth will average 3.0% per year.

■ Passenger traffic growth will average 4.8% per year.

■ Cargo traffic growth will average 6.4% per year.

Worldwide demand for commercial airplanes, 2000–2019

The world fleet will grow to 31,755 passenger and cargo jets in 2019.

The composition of the world fleet in 2019 will be

■ 15% smaller regional jets. ■ 22% intermediate-size airplanes.

■ 57% single-aisle airplanes. ■ 6% 747-size or larger airplanes.

The total market potential for new commercial airplanes is 22,315 airplanes,

or an equivalent $1.5 trillion in 1999 US dollars. Airlines will take delivery of

■ 4,195 smaller regional jets. ■ 4,730 intermediate-size airplanes.

■ 12,380 single-aisle airplanes. ■ 1,010 747-size or larger airplanes.

The Experience. For luxury and economy passengers alike, the air travel environment has changed significantly over the decades.

The Experience. For luxury and economy passengers alike, the air travel environment has changed significantly over the decades.

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Demand for Aviation Services

The world airline fleet will more than double by 2019. The world fleet is projected to grow to 31,755 airplanes by the end of the 20-year forecast period. This chapterestimates the market for those services necessary to operate the world’s airlinefleets effectively and dispose of surplus airplanes.

Scope of the Market

Airlines currently spend $330 billion in operating expenses. The International Civil AviationOrganization (ICAO) compiles the expenses of its members’ scheduled airlines, which totaled $282 billion in 1998. For 1999, we estimate that world airline expenses, includingnonscheduled airlines and airlines of non-ICAO member countries, totaled $330 billion.Extrapolated from 1998 ICAO data, the major expense categories break out as shown.

Airline operating expenses include all activities incurred to attract customers and deliver passengers and cargo to their destinations. Embedded in these activities is a set of support services necessary to operateairline fleets effectively and dispose ofsurplus airplanes. Precise identification of each activity expense is not possiblefrom the ICAO reporting system. In aggregate, support products andservices generated more revenue for their producers in 1999 than even the $70 billion market for commercial jets.Boeing estimates sales in these marketstotaled more than $87 billion in 1999.

Forces Driving the Market

The forces that drive the demand for commercial jet airplanes also drive these

commercial aviation support markets. As the world airline fleet continues to increase in size, the demand for aftermarket services to minimize functional and economic obsolescence has grown. When new airplane models are added to airline fleets, the flight decks and interior configurations in the retained fleet may need to be modified to achieve commonality.Many major systems on older aircraft require updating for operational efficiency or to meet new regulatory requirements. Growing air traffic has created costly delays for airlines. This growth in turn creates opportunities to develop innovative infrastructure and technology solutions to manage air traffic more efficiently and reduce delays. While a step removed from the aviation support services market, these improvements will help ensure continued growth in airport and route infrastructure services.

Airline Operating Expenses Totaled $330 Billion in 1999

Ticketing and marketing

14.3%

Passenger services10.7%

Station expenses11.3%

Airport charges 3.9%

ATM and ATC 2.6%Flight

crew and training8.8%

Fuel and consumables10%

Maintenance,repair,and overhaul

11.4%

Depreciation and amortization

6.1%

Administration13%

Other7.9%


Deregulation, privatization, and globalization have increased competition and forced airlines

to operate at much higher levels of efficiency. Airlines are increasingly focusing on their corebusiness of attracting and keeping loyal customers, while seeking new ways to reduce costs.Some airlines have spun off engineering and maintenance departments into profit centers while others have chosen to outsource maintenance and inventory management activities.

Airlines are drastically reducing their supplier base. They have also begun to focus their effortson better utilizing existing inventories of parts and components. Airline alliances have thepotential both to dramatically increase price leverage through the consolidation of purchasingactivities and to improve the utilization of inventories via economies of scale. In sum, airlinesare becoming better able to demand the highest quality parts and services, at the best prices,delivered “just in time,” and provided by the smallest possible number of suppliers.

Airlines are beginning to focus on total life cycle cost in addition to individual transaction cost.

As a consequence, they are looking increasingly for aftermarket suppliers that can provide“total solutions.” Total solutions embody integrated systems, processes, and infrastructure to deliver to customers all of the productsand services required to support theefficient use of their airplane fleets.

The supplier base has responded to thesepressures by moving at an acceleratingpace away from its historical extremelyfragmented structure. Consolidation hascreated “mega-suppliers,” suppliers withsubstantial breadth and depth of productand service offerings. Major players areredefining market boundaries in responseto airline demands for better solutions.Relationships between original equipmentmanufacturers (OEM) and their suppliersare changing. Increasingly, suppliers must contribute capital, access to markets, systems and subsystems integration, as well as provide high-quality, low-cost, and on-time delivery. Risk sharing and equity or revenue sharing arrangements are becoming more common.

Competition in the MR&O market is fierce. As the industry restructures, a major battleground has been the airplane maintenance, repair, and overhaul (MR&O) market. Diversified aviationservices suppliers, OEMs, and major airline subsidiaries are competing for market share. Third-party MR&O centers can offer lower costs and better turn times, and industry observersbelieve the quality of providers has improved tremendously over the past several years. On theother hand, airline maintenance subsidiaries, operating as profit centers, have become moreefficient, offer a respected “brand,” and may have an inside track with alliance partners wishingto outsource. Nonetheless, airline alliance partners have yet to pool maintenance activities, so efficiencies from economies of scale have yet to be realized. A push for pooled maintenanceby airlines with equity positions in affiliates could effect such economies of scale and drive the industry as a whole to more efficient maintenance operations.

Commercial Aviation Support Services Represented an $87 Billion Market in 1999

Airplane servicing$13.8

Heavy airplanemaintenance

$18.5

Engine repair (off wing)$8.4Airframe

component repair $12.3

Major airplane modification$1.8

Airfame and engine repair parts $8.1

Flight crew training $1.7

Airport and route infrastructureservices $21.4

Used airplane remarketing$0.7


Meanwhile, airlines are outsourcing more heavy maintenance work. As new airframes, engines, or both are brought to market, some airlines are looking to OEMs for “total support”packages. These packages cover heavy maintenance requirements and allow airlines to avoidinvestments in new facilities. Some airlines, however, have decided to contract out heavymaintenance for older airplane types, preferring to utilize in-house capabilities on airplanemodels that are likely to remain longer in their fleets.

Market Segments for Commercial Aviation Support Services

Distinct market segments exist. The segments of the commercial aviation support servicesmarket are quite diverse in terms of sales, activity scope, capital intensity, and competitiveenvironment. Nonetheless, they should grow at the rate at which the world airline fleet grows or at the rate by which fleet utilization grows, depending on the market segment. Boeing models for projecting the size of commercial aviation support markets are linked analytically to the process for forecasting the world airline fleet. This process enables estimates of marketscope to be reproducible and relativelyindependent of ad hoc surveys, which have formed the basis of many other suchestimates. Estimates of the size of thesemarkets over the next 20 years are basedon projected annual growth in passengertraffic of 4.8%, in cargo traffic of 6.4%,and on growth of the world airline fleet of over 22,000 airplanes.

Airplane servicing: Includes linemaintenance, ground support services,aircraft fueling (excluding the cost of fuel)preflight aircraft inspection, preparationfor departure, on-wing engine servicing,and engine removal or replacement. These activities take place while airplanes are in “in-service” status and are performed by airline personnel (often of another airline) or contractedout to specialist service providers. Some airlines doing this work for other airlines are trying to expand into doing more heavy maintenance work for these customers. Growth of the marketfor airplane servicing will be related to growth in the number of seats in the fleet and in thenumber of miles flown. Boeing projects the airplane servicing market to be $441 billion overthe 2000 to 2019 time period, growing to be an annual business of $32 billion by 2019.

Heavy airplane maintenance: Includes “C” and “D” checks, airframe repairs, airframe painting,incorporation of airworthiness directives and service bulletins, aging aircraft repairs, andinterior refurbishment. Heavy maintenance activities take place when airplanes are in “out-of-service” status. The in-house shops of airlines do about 75% of heavy airplane maintenancework, but outsourcing to third-party providers, including major airline engineering and main-tenance subsidiaries, is increasing. The maintenance and engineering subsidiaries of thelargest European in-house shops have led the movement toward consolidation in this market.

Commercial Aviation Support Services Markets Represent a $2.7 Trillion Opportunity1999 dollars, billions

Airplane servicing$441

Heavy airplanemaintenance

$588

Engine repair (off wing)$268

Airframecomponent repair

$394

Major airplane modification$43

Airfame and enginerepair parts $257

Flight crew training $49

Airport and route infrastructure services $622

Used airplane remarketing$20


The best predictors of the market for heavy maintenance services are the size of airplanes in the world airline fleet and the number of flight-hours the fleet produces. Although heavymaintenance expenditures vary significantly with airplane age, the average age of airplanes in the world airline fleet has remained relatively stable over the past decade. A large number of airplanes are projected to be delivered over the next 20 years compared to the numberprojected to be retired. Thus, the average age of airplanes in the world airline fleet, in sizeclasses 100 seats and above, should remain relatively stable over the forecast period. Therefore, no fleet age factor is incorporated into these market estimates. Boeing projects the heavy maintenance market to be $588 billion over the 2000 to 2019 time frame, generating annual revenues of $43 billion by 2019.

Engine repair (off wing): Includes engine breakdown and buildup and engine component repair. These activities are performed in-house at airlines or, increasingly, contracted out to repair service providers. OEMs have aggressively pursued this market. Engine repaircapabilities are being consolidated rapidly worldwide, as engine manufacturers lead theformation of joint ventures. In the typical joint venture structure, a major airline’s in-house engine shop and its top supplier or suppliers are collected into a new company that is majority owned by an engine manufacturer.

Growth of the engine repair market will be based on the total pounds of thrust in the world airline engine fleet and the number of hours these engines are flown. Boeing projects that the airplane repair market will generate sales of $268 billion over the forecast period.Annual sales should grow to about $20 billion by 2019.

Airframe component repair: Includes rotables, such as landing gear and APUs, as well as avionics components including navigation, communication, autopilot, indicating, and other electrical and electronic systems. About half of airframe component repair work is done in-house. OEMs have most of the remaining market, although there is some third-party participation.

The growth of the component repair market depends on the size mix of airplanes in the fleet and the number of flight-hours the world airline fleet generates. Boeing estimates that this market will be worth $394 billion in the 2000 to 2019 time frame with annual revenues of almost $29 billion by 2019.

Major airplane modification: Includes freighter conversions, reengining and hush-kitting,cockpit conversions, and in-flight entertainment systems upgrades. Factors driving thepassenger-to-freighter conversion market include the underlying demand for air cargo; the availability of airplane types that have the capability to be freighters as they loseattractiveness as passenger airplanes, have competitive operating economics, meet noise standards, and are available in large numbers at reasonable age profiles; and the availability of conversion programs. While virtually all heavy maintenance shops advertise that they can do major modification work, only the airframe manufacturers and the largest airline engineering and maintenance shops have the capability of engineering the modifications and providing the needed kits.


We project the major airplane modification market to grow at lower rates than other aviation support markets in the early years of the forecast for two reasons. The market forhushkits appears to have been satisfied for the foreseeable future. Also, near-term demand for widebody freighter conversions, the most lucrative segment of the conversion business, is expected to be moderate because of the volume of new 747-400Fs on order and the readyavailability of recently converted A300B4s. These factors will impact the market for majorairplane modifications in the first years of the forecast. On the other hand, growth in the market for interior modifications will continue to be largely a function of the growth in thenumber of seats in the world airline fleet. Boeing estimates the major modification market to be worth $43 billion during the forecast time period with annual revenues reaching almost$3.5 billion by 2019. Demand for airplane and/or engine modifications to reduce airplane noise levels may be revitalized when new, more stringent noise regulations are enacted. This estimate of the market for major airplane modifications may need to be increaseddepending on the nature and the timing of future noise regulations.

Airframe and engine repair parts: Includes OEM proprietary parts, vendor parts, and standards, as well as spare OEM components. Major OEMs still dominate this market, but competition from distributors of used parts has been increasing. In addition, the number of entities with parts manufacturing authority (PMA) certification has grown to account for a measurable portion of the OEM proprietary parts market. It seems thatvirtually every major player in the commercial aviation industry is forming a “dot.com” joint venture to take orders for large jetliner airframe and/or engine parts. Meanwhile, airlines are forming joint ventures with their alliance partners to pool parts inventories and streamline distribution processes, and a few US businesses have grown up rapidly around a core of parts salvaging and parts distribution.

Major drivers of the market for airframe and engine repair parts are the same as those underlying growth in the heavy maintenance, engine repair, and component repair markets. Boeing projects that the market for these repair parts will be worth $257 billion in the 2000 to 2019 time period. Annual sales are estimated to reach almost $19 billion by 2019.

Flight crew training: The vast majority of flight crew training is done in-house using airline-owned equipment-simulators, trainer aircraft, and large jetliners. Most training that is outsourced is provided by other airlines. OEMs and third parties have only a smallshare of the market. The market for flight crew training is driven by the growth of the worldairline fleet. Boeing estimates that this market will be worth $49 billion during the forecasttime period. Annual revenues are projected to be almost $3.5 billion by 2019.


Airport and route infrastructure services: Includes airport landing and associated fees as well as route facility charges paid to air traffic control operators. Historically, local or regional governments have controlled airports, and national governments have controlled ATC systems. In recent years, however, the operations of many airports have been turned over to the private sector. The trend toward airport privatization is likely to continue.

The costly delays associated with growing air traffic have led to increasing discussion about reorganizing the way ATC systems are operated. Some systems could be privatized. There is a market for innovative infrastructure and technology solutions not included here to manage air traffic more efficiently, reduce delays, and, ultimately, ensure continued growth in airport and route infra-structure services to serve expandingpassenger and cargo traffic.

Growth in the market for airport and routeinfrastructure services will be primarilyrelated to growth in airplane movements.We project that this market will generaterevenues of more than $622 billion in the2000 to 2019 time frame, and that annualrevenues will grow to $43 billion by 2019.

Used airplane remarketing: Includes salescommissions, markups, and revenuegenerated by trade-in surveys of usedairplanes. This market segment isextremely fragmented with lessors and operators selling airplanes to otheroperators, manufacturers, and brokers.The market for used airplanes tends to be counter-cyclical to the market for new airplanes. Orders of new airplanes reach a cyclical peak when the availabilityfor sale of used airplanes is low, and vice versa. Actual transactions of used airplanes seem significantly less cyclical, however, as price variation dampens the effects of cyclical demand and supply.

We project growth in the market for used airplanes to follow closely the growth of the world airline fleet. We estimate this market to be worth $20 billion over the forecast time period, generating annual revenues of almost $1.5 billion by 2019.

Overall, we expect the commercial aviation support market to be worth almost $2.7 trillion between 2000 and 2019. Annual revenues will significantly more than double to over $190 billion by 2019.

0 10 20

1999 dollars, billions30 40 50

Annual Sales of Commercial Aviation Support Services Will Grow Significantly2000–2019

Airplaneservicing

Heavymaintenance

Enginerepair

Componentrepair

Major airplanemodification

Airframe/enginerepair parts

Flight crewtraining

Airport/routeinfrastructure

servicesUsed airplane

remarketing

19992019

Infrastructure. Airports, support services, and airtraffic control have all evolved and continue to evolvehand-in-hand with commercial aviation itself.

Infrastructure. Airports, support services, and airtraffic control have all evolved and continue to evolvehand-in-hand with commercial aviation itself.

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Demand for Air Travel

This chapter contains forecasts for air travel growth. The industry is strongly cyclical. Any forecast must start by discussing where the industry is in its current cycle. The first section of this chapter suggests that the current airplane delivery cycle has reached a peak and may slow for a period to alignsupply and demand before returning to long-run growth levels. The next section uses history to develop a foundation for forecasting the future. The final section sketches the concepts behind the forecasts and presents the outlook for air travel from the year 2000 to 2019.

Current Position in the Cycle

A forecast of air travel must start with an understanding of where the industry is in its

business cycle. The business here is the airline business, and the cycle is in the growth of air travel demand. A traffic forecast first projects a return to balanced supply and demand, balanced prices and profits, and balanced growth. From that adjustment, longer-run trends determine the moredistant outlook.

The independent driver of cycles of air travel growth has been economicgrowth. The year 1999 found the worldwith recessions, booms, good patches, and crises. Financial crises hit many Asian economies in late 1997, but recovery seemed well under way in 1999.The cycles have turned up from their lowpoints. Japan was not in a crisis but hassuffered a long-term slowdown. The year1999 showed improved economic per-formance, and the expectation is forcontinued gradual improvement. Where the Asian crisis was a plunge and a quick recovery, both the decline and the recovery in Japan are beingmeasured in years. Meanwhile, Australiaand the United States in 1999 persisted in growth beyond predicted levels. Theircycles are sustaining at peak growth almost impossibly long. European economies have been slightly below trend but are pointed up, so the cycle is in a healthy position. South America suffered in 1999, and some countries are still in the middle of their slowdown. Forecasts put South America at the bottom of its downturn with expectations for an early revival for most cases.

Economic Cycles Are Different by RegionGDP growth rates, %

-5

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5

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SoutheastAsia

SouthAmerica

Europe

China

19991998199719961995


Around the world, economies dependent on oil or other commodities are recovering.Elsewhere, most countries are near trend growth. There is no persistent pattern of decline or boom for the global economy as a whole.

Economic cycles are important, but the current year’s air travel is more sensitive

to consumer confidence. In America and Europe, consumer confidence is high but not increasing. This suggests that recent excellent air travel growth may be flattening. For countries in Asia recovering from recessions, confidence is rising from low values. This rise should anticipate a return of airline revenues to levels seen before the crises. In China and South America, it is likely that consumer confidence is not strong, and travel growth may be somewhat in abeyance in the short term.

The question is not just consumer confidence, but the resulting balance between capacity

and demand. In Asia, load factors have returned, but yields are still lower than in 1997.Revenues will take time to recover. Europe seems to be at the top of a travel growth cycle, and the United States may have passed its top in 1999. On the other hand, US capacity is not in excess; US load factors exceeded long-term averages in 1998 and 1999. China is resolving an over-capacity situation, and South America hopes to recover from itsslowdown soon. In total and in spite of Asia’s woes, world air travel is at the top of a cycle and perhaps tending to slightly slowed growth. If capacity is slightly ahead of demand, it is by only a small amount, as will be seen.

In many markets, cycles of demand are

getting more difficult to read. Followingentirely different paths, Asia, Europe, and North America all ran load factorsclose to 72% for 1999. However, they were not at the same place in their traveldemand cycles. These days, airlines dis-count more, sacrificing yield to keep load factors up when demand falters. Yield is not as consistently reported as load factor, so downturns are less readilyobserved. In addition, airlines that haveservices in several parts of the globe movecapacity from suffering markets to more promising places, improving the load factor where demand would be down and reducing it where demand might be up. It is now broadly agreed that excess capacity on the Atlantic in 1999 was airplanes divertedfrom planned Asian growth by European and US carriers. The year 1999 saw the Atlanticmarket in a good state of demand growth, but in a poor position in terms of profits.

63

66

69

72

1999199819971996199519941993

Load Factors Coincide at 72 PercentLoad factor, %

North Americanairlines

Europeanairlines

Asia-Pacificairlines


The airplane delivery cycle happens at a later time than the air travel demand cycle.

The match of capacity to demand leads to airline profits, and profits lead to airplane orders. These steps spread out over one or two years. For the airplane cycle, overallconditions can be observed in the orders for new airplanes and the prices and availability of used ones. When travel demand falls short of airplane supply, airlines adjust in many ways. Yields fall to stimulate traffic, load factors may fall, services are reduced by loweringutilization, and airplanes are retired. When demand grows ahead of supply, the oppositeshappen. Airlines hold on to older airplanes, airplanes fly more hours, load factors rise, yields increase, and profits accrue.

In 1999, the cycles for twin-aisle and single-aisle airplanes had different causes. There was an excess of twin-aisle long-haul airplanes because airplanes were delivered in Asia during1998 and 1999 while airline revenues were declining. This was apparent in the increasedavailability of used models, in declining lease rates, and in lower ratios of hours flown to fleet counts. Adjustments of fleets since 1998 are causing these measures to begin to ease and planned fleets look to approach balance with demand by the year 2000.

On the other hand, there is no excess of single-aisle airplanes even though 1998 and 1999 saw large increases in deliveries. Excellent regional travel growth in the United States and Europe hascompensated for shortfalls in Asia. More important, single-aisle airplanes are in the middle of a purely technicalkind of cycle. The large US system has just completed a reequipment boomdriven by the need to retire noisier Stage 2 airplanes before 2000. At thesame time, the generation of airplanesthat was due for retirement between 1998 and 2000 was large, and the gen-eration due to retire between 2001 and2003 is unusually small. This technicalcycle for single-aisle airplanes created a boom in single-aisle deliveries in 1998 and 1999 and will be a moderating influence in 2000 and 2001. Any slowing will be not at all like the mid-1990s decline, which followed years of deliveries in excess of needs. The single-aisle airplane delivery peak in 1999 is divorced from travel demand cycles.

Capacity growth is a better measure than airplane counts and shows the demand balance more clearly. When measured in seats delivered instead of airplanes, the current twin-aisle and single-aisle cycles nearly cancel out. The long-term trend for annual deliveries of airplane capacity is just above 6% of the existing fleet. Deliveries in 1998 and 1999 exceeded the norm by only a moderate amount, and the dip in thesubsequent two years should fall very near the trend. A cycle in airplane deliveries isunderway, but it is mild and is not a result of mismatched capacity and demand.

1985 1990 1995 2000e

Seat Deliveries Trend Is About 6 Percent of FleetDeliveries of seats, in 1,000250

200

150

100

50

0

10

8

6

4

2

0

Deliveries as % of in-service fleet

SeatsPercentage


Looking at airplanes rather than seats, forecasts are for a mild decline in single- and twin-aisle deliveries in 2000 and 2001 from the high in 1999. These moves should play out existing cycles and achieve a balance between demand and supply. The traffic forecastbelow and the corresponding fleet needs in the next chapter, represent the long-run trendsfollowing the current cycle’s resolution. Future airline cycles will start with economic events.These events are usually unpredictable disruptions striking an economy that is imperfectlybalanced. The long-run outlook reflects the likelihood of such events in its averages but does not predict the timing.

Trends From History

History is important. This section reviews the growth of the airline industry. History isimportant because forecasts for the future depend on understanding the story told by the past. Trends in fleets and in network growth from the mid-1980s continued through the 1990s, in spite of large unforeseen changes in global conditions. These trends will likely persist as airlines move into the new century.

History for today’s industry starts in the middle 1980s. Fleet growth before this point was dominated by airlines adjusting fleet mix, route development, and traffic to the new availability of big,efficient, twin-aisle airplanes. By 1985,the world’s fleet was in balance withmissions and route authorities. Sincethen, airlines have been able to choosefrom a complete spectrum of airplanesizes for all but the longest markets. Thus, fleet additions since 1985 largelyrepresent continuing needs and are notdistorted by a major reequipment cycleand new airplane capabilities.

Air travel has doubled since 1985. Annualaverage growth of 5.1% per year varied byregion. Some regions have shown annualRPK growth as high as 12% while others fell below 4%. History shows that where economies grow, travel grows. Growth is somewhat faster where the initial travel is unusually low for the level of wealth. Otherwise, there is considerable variation in growth from market to market and year to year.

Travel growth outpaces economic growth. Historically, the growth of RPKs has been higher than the growth in GDP. This difference has led researchers to suggest that travelgrowth is just under twice the economic growth. However, the evidence suggests that thepattern is somewhat different. Travel growth is much closer to being equal to economicgrowth plus two percentage points.

Growth Varies by RegionAnnual growth by domicile, 1986–1999

0 2 4

Percentage

6 8 1210

GDPRPK

WORLD

Middle East

Africa

Europe

South America

Central America

Northeast Asia

North America

Oceania

Southwest Asia

Southeast Asia

China


Travel growth may be divided into two parts. The first part is growth one-for-one with economic growth. World economies have grown 2.5% a year since 1985, and thisexplains a 2.5% growth in travel. The second part of travel growth is growth stimulated by lower fares, growing international trade, and more services. This stimulation happens whether economies are growingor not. The distinction between growthinspired by economic developments and growth stimulated by other means is important in anticipating where travelgrowth might be approaching maturity or beginning to slow. At present, thetrends are changing slowly if at all.

Travel responds more strongly to economic

changes in the short term than in the long

term. Declines in GDP cause fallingconsumer confidence and much lower air travel demand. As confidence returns,there is a corresponding short-term surgein travel. These movements happen in a matter of a season or a year and are not the basis for long-term growth trends. Exaggerated short-term responses can confound longer-term calibrations. Over the long term, consumer confidence is average.

Economic growth causes a simple proportional increase in travel growth over the long term.

Over time frames long enough to smooth out cycles, 2% GDP growth causes 2% travelgrowth, and 9% GDP growth causes 9% travel growth. As a result, air travel share of GDP is just as high for low-incomecountries as it is for high-incomecountries. Apparently, poor countriesfind air travel an essential good forcommerce and governance, while richcountries use it for more leisure travel.Whatever the explanation, rich countriesdo not spend a higher share of their GDPon air travel than poor countries.

1975 2000199519901985198010

15

20

25

30

Travel Share of GDP Grows With TimeASK/GDP index

1997 per capita GDP, US dollars in 1,000

0 10 20 30 40 50

80

60

40

20

Travel Share of GDP Is Independent of Income ASK/GDP index


Air travel growth surpasses growth in a country’s economy. Air travel growth in excess of GDP isstimulated by three factors. The travel share rises over time as fares decline, trade increases,and services increase. This additional growth occurs in fast-growing and mature economiesalike. It occurs even where GDP growth is stagnant.

Lower fares are one of the causes of

extra growth. The cost of air travel hasdeclined steadily. Fares have been declin-ing at just below 1% a year, after adjustingfor inflation. Most of this decline has beenin leisure fares. Unrestricted fares com-monly used for business travel have notshared equally in the savings. A moreaccessible measure than fares is the ratioof overall revenues to total distancestraveled — the “yield.” The trend since1985 has been for yield declines of 1.9%per year, after adjusting for inflation.However, yield overstates reductions infares. Long trips cost less per kilometerthan short trips, and trips have grownlonger by 1.8% a year. Also, the market mix has moved to more low-fare travel at higher load factors. Thus, some of thechanges in the yield statistic happenwithout fares changing at all. The distanceand mix effects on yield are matched by reduced costs, so not all yield declines represent a cost challenge to the airlines. Airline costs for comparable flights are declining at just under 1% a year. This is the rate at which fares are going down. A value of 1% is the kind of sustained productivity improvement economists might expect from an industry that is more like a service industry than manufacturing.

Growing world trade is a second reason travel growth exceeds economic growth.

International trade has grown at nearly twice the rate of world GDP. Countries where trade is a large part of the economy tend to have high travel shares. Countries with fast-growing trade have above-average growth in travel. Such statistics support what might be thought of as common sense. Growing global trade regimes have played a part instimulating air travel growth.

0.70

0.80

0.90

1.00

2000199519901985

Fares Decline Slower Than Yield StatisticIndex

Fares(estimated)Trend

(–1.9% / year)

Yield(data)


The third part of air travel growth beyond economic growth comes from more flights.

Increased numbers of flights have stimulated travel. Certainly, airlines have added new departure times in existing markets. In addition, huge numbers of new nonstop routes have opened up. Long-haul routes have grown 88% as fast as ASKs, and short-haul routes have grown 75% as fast. New markets take a special effort to forecast, but history shows they are a major part ofaccommodating growth. Furthermore,newer frequencies often bypass tradi-tional hubs and gateways. This makes for not only more routes, but longerroutes. More long flights mean fewerconnecting trips, which is both betterservice and a savings in cost.

Increased frequencies have been asimportant to travel growth as reducedfares. If airlines had used larger air-planes, rather than added frequencies, to accommodate the doubling of travelbetween 1985 and 1999, costs would have fallen a further 1% a year. However, the new flights created at least as much new value as their extra cost. If these flights had not been valuable, the airlines would have suffered losses and withdrawn. Better service makes air travel cheaper in terms of the traveler’s time and total expense, and that value is rewarded in the marketplace.

Increased frequencies are coupled with a gradual movement toward smaller

airplane size. Average airplane capacities have declined in all flows except the transpacific, where only the largest airplanes could cover the distances. Even with the Pacific included, world long-haul flows are using airplanes 10 seats smaller in 1999 than they used in 1985. The pattern of higher frequencies, longer distances, and slightly smaller airplanes is persistent and pervasive throughout the period and over various groupings of interregional travel flows. Steps down in size often occur during transitions from regulated environments. However, even US markets, which were fully deregulated by 1985, continue to show no growth in average airplane size. As people grow wealthier, they appear more willing to favor timely and direct services over minimum cost.

0

1

2

3

1999199519901985

New Routes Rise With Growth1985 = 1.0

Route kmASK


In summary, history shows a trend of travel growth above the growth of the world’s economies.

Air fares continue to go down, flying continues to get more direct, and growing tradecontinues to drive more travel. History has two surprises. First, airplane size by market is either flat or falling. And second, countries with low incomes require the same amount of air travel as a share of their GDP as higher-income countries. The forecast in the nextsection respects these trends. There is no evidence that they are changing.

Future Growth

Traffic forecasts start by finishing the current cycles. There really are two cycles. The drivingcycle is the cycle of economic activity and traffic, which is part of the traffic forecast here. The following cycle is the cycle of airplane purchases and the balance of fleet capacity withtravel needs that is contained in the next chapter. This section outlines the methods andresults for the forecast for travel growth. These methods are applied after adjusting for the starting position in economic and travel cycles characterized above. For example, travel within Asia and travel across the Atlantic during 1999 were stimulated by fares below long-run trends. Forecasts for traffic growth must allow for a period where thepassenger counts rise more slowly as fares return to normal levels. After short-termimbalances have played themselves out, traffic forecasts for the longer term are a smooth projection from historical trends.

Travel growth for a country averages 1.7% above the forecasts for economic growth.

This overall trend is modified by adjusting demand for the current position in the cycle, by a mild trend toward world norms in terms of travel share of GDP, by growth momentum,and by special regional considerations such as new high-speed rail competition. The result of all this is that the world travel share overall is expected to continue to grow very close to historical trends.

The basic forecast has three simple steps. First, forecast economic growth by country. Next, forecast the travel share of the economies based on past values, world trends for increase, and the tendency for lagging countries to catch up to world norms. Finally,calculate growth of interregional flows based on the travel growth values of the countries at each end. The detailed results of these steps are expressed as RPK growth rates for 51 world interregional flows.

Travel growth is based on a forecast of 3.0% for world economic growth. Economic growth of each country is driven by the growth of its population and workforce and by increases in productivity and investment. Interruptions from events such as drought, war, or recessions explain why long-run averages are below the capabilities of demo-graphics and productivity. Although they are rare, severe disruptions and changes in direction also occur.


Recent financial crises in Asia went beyond a recession; they halted some ongoing business activities and precipitated institutional changes. The short-term result was a severe economic contraction. The long-term result is a change in the regime of growth and reconsidered forecasts for long-term performance.

The regional economic growth forecasts that underlie the traffic fore-casts call for top growth rates for Chinaand Southwest Asia. For China, the next20 years are not expected to equal theperformance of the recent past. Risingincomes call for rising complexity infinancial and social structures, andeconomic growth will slowly allow thesestructures to develop. Southeast Asia had very strong growth before the recentcrises, but the outlook for the future isalso somewhat reduced in spite of changesin structure that remove some investmentdifficulties. The benefits of entering world trade and moving employment to trade industries have been gained already, and long-run development must depend more on internal consumer markets. Meanwhile growth rates for developed economies are all expected to be similar. European growth is expected to return to levels enjoyed in the decade of the 1980s. North America is expected to come off its 1990s pace and arrive at a similar level. NortheastAsia growth is expected to be somewhatslower because Japanese demographicsimply low work-force growth.

Growth in travel share of GDP adds to

economic growth. The scatter of travelshares across countries becomes slightlyless scattered as a future projection. This conforms to past trends. Countrieswith high travel shares have tended tohold their values while the world caughtup; whereas, countries with low shareshave tended to grow faster to catch up to the world. Low travel shares are often a result of limitations on route development, high ticket prices, political restrictions, or lagged development against a background of high economic growth. Travel grows as these constraints are removed.

1975 20202000 2005 2010 2015199519901985198010

20

30

40

Travel Share of GDP Will Continue to GrowASK/GDP index

Economic Forecasts Compare to PastAnnual GDP growth by domicile region, %

0 2 4

Percentage

6 8 10

1986–19992000–2019

China

Southwest Asia

Southeast Asia

CIS Region

Central America

South America

Africa

Middle East

Europe

North America

Oceania

Northeast Asia


Southwest Asia and Northeast Asia both should grow well above economic levels because both regions suffer from low initial travel levels for their economic size. Prices have been high, and competitive entry has been difficult in some of these markets. Asmarkets liberalize, a growth spurt can be expected. Europe too has markets that will benefitfrom the continuing liberalization, and this explains the expectation for continued strongtraffic growth there. On the other hand, travel levels for China and Southeast Asia caught up with their fast-growing economies in the 1990s and may not set quite as fast a pace in traffic growth as they have in the recent past.

A region’s travel growth is not focused uniformly on all markets. In general, countries with high economic growth will develop local travel fastest, while mature economies may express much of their growth to distant developing regions. Historically, the growth inregional flows has often come in spurts. Transition to liberalized competition will oftenprovoke spectacular travel growth in the short term as airlines vie for market position. Over the longer run, growth of travel flows between regions is a combination of the growth rates of the countries at each end of the flow. Appendix A presents the growth for the 51 significant flows among the 12 major regional divisions of the world. The forecasts for growth over 20 years vary between 2% and 9%.

Air travel continues to be a growth industry. Travel will grow faster than economies grow. Some of this growth is due to lower costs and lower prices. Some growth is more servicescreating more value. Some is the continued expansion of world trade. Overall, RPKs are expected to grow at 4.8% a year over the next two decades. The growth in airplane seats needed is somewhat less, as airlineslearn to operate at load factors similar to ones seen in the best markets in 1999and as airplane work rates continue toimprove throughout the world. The onlynegative trend is in the cost in time andmoney of using airports. This dampensshort-haul markets but has little effect on longer-haul routes. The next chapterdevelops the traffic forecast into a forecastof airplane fleets and the mix of sizes thatwill be required to serve this growth.

Traffic Forecasts Compare to Past Annual RPK growth by domicile region, %

0 2 4

Percentage

6 8 10 12

China

Southwest Asia

South America

Northeast Asia

Southeast Asia

Africa

Central America

CIS Region

Europe

Middle East

Oceania

North America

1986–19992000–2019

The World Around Us. Today’s free flow of ideasand information stimulates our global curiosity,inspiring us to further extend our physical reach.

The World Around Us. Today’s free flow of ideasand information stimulates our global curiosity,inspiring us to further extend our physical reach.

Dem

and

for A

irpla

nes

Dem

and

for A

irpla

nes



Demand for Airplanes

The market includes airplanes for growth and for replacement. This chapter develops the traffic forecast into a forecast of airplane fleets. It includes jet airplane capacity to meet the projected growth in passenger and cargo demand, plus the replacementmarket for older in-service airplanes. The forecast simulates airline strategies thatselect the mix of airplane sizes that will be required to serve this growth.

The 20-Year Forecast

The market for airplanes is $1.5 trillion over 20 years. World air travel is projected to grow annually at 4.8% and air cargo at approximately 6.4% during the long-run forecast period. The world fleet is expected to more than double, with total fleet size growing to 31,755 by 2019. Two-thirds of the fleet operating today is projected tostill be in operation 20 years from now. Inthe two decades, 22,315 commercial jets —21,512 passenger airplanes and 803 newfreighters — are forecast to enter service toaccommodate traffic growth and replacecapacity lost as airplanes are removed from commercial airline service.

Airplanes are replaced in stages. Airplanesoften remain in service significantly longerthan their first operator flies them. Newairplanes enter the fleet while older air-planes pass through a series of replacement stages. Significant variation exists among airlines as to replacement timing. The forecast is based upon information from airlines whenever possible.The table below summarizes guidelines used to remove airplanes from the active commercial fleetwhen airline information is not available.

One-third of today’s capacity will need to be

replaced. The tally of airplanes added andremoved is a straightforward exercise.Defining the number of airplanes attribut-able to growth and those attributable toreplacement is not. The reason is thatairplanes are not replaced jet-for-jet, but rather seat-for-seat.

The 4,230 airplanes removed from the system will be replaced by some airplanes of equal size, but also by both smaller and larger airplanes. For example, an airline might “replace” its 727-200s(156 seats) with 757-200s (201 seats). Only a portion of each 757-200 actually serves as replace-ment; the rest contributes to growth. Based upon an estimate of the amount of capacity removed from the world fleet, approximately one-fourth of the $1.5 trillion market for new commercial jets can be thought of as replacement for older in-service airplanes, and the remaining three-quarters for accommodation of both passenger and cargo traffic growth.

Single-Aisle Airplanes Dominate Future Deliveries2000–2019

Smaller regional jets

Single-aisle

Twin-aisle

747 and larger

Delivery dollars*$1.50 trillion

Number of airplanes22,315

40%

6%

41%

13%

55%

21%19%

5%

* In 1999 dollars

Guidelines for Replacement in Commercial Airline Fleets

1. Information from airlines

2. Airplanes designed Before 1980 After 1980Single-aisle 25 years 28 yearsTwin-aisle 28 years 31 years

3. Freighters: 35 years or older

4. Extended service lives (hushkits): 5 to 10 years


Regional jets will meet the needs of an evolving market. The 2000 Current Market Outlook

includes a significantly larger forecast for regional jets than in the past. The 1999 fleet of 900 small and intermediate regional jets is projected to increase to 4,870 jets in 2019. In the United States, regional jets with less than 70 seats are currently transforming com-muter affiliates from small-market feeders into full strategic partners. US regional airlines are operating smaller regional jets on new nonstop flights. They are serving to extend thegeographic reach of Major airline hubs, augment larger jet operations in off-peak hours, replace Major airline larger jets on thin routes, and substitute for prop flights.

Such applications of regional jets are leading to continued market fragmentation in the US domestic markets, allowing airlines to provide additional frequencies for business travelers at off-peak times of day. Consequently, these new services are carrying a high proportion ofbusiness travelers, which enhance yieldsand profitability. Until the “scope clauses”of US Major airlines’ pilot contracts aremodified, demand for regional jets will be skewed toward small regional jets with 70 or fewer seats.

Few scope clauses in Europe are asrestrictive as those in the United States,nor are they EU-wide, thus creating thepotential to make regional jets an evenmore powerful strategic force. Connecthubs are generally much less developedthan in the United States. Populationdistribution, slot limitations, and the relatively embryonic state of the single market impose limits on the ability of airlines to build US-style hubs. The regional jet’s role in Europe is more linked to hub bypass and point-to-point strategies. European airlines with relatively favorable scope clauses are likely to employ regional jets to gain advantage over competitors with more restrictive scope clauses.

The largest demand is for small airplanes. The current world fleet of 10,110 single-aisle airplanes plus regional jets is expected to grow to 22,950 airplanes by the year 2019. Airlines are expected to continue to purchase large numbers of these smaller airplanes so they can offer more frequencies in domestic service and on short-range international routes.

Demand for mid-size airplanes is growing the fastest. Intermediate-size airplanes will be the fastest-growing segment of the commercial airplane market for two reasons. First, some mid-size types are now capable of serving long-range intercontinental markets that once were restricted to long-range 747s. Second, airlines can take advantage of lower operating economics for the intermediate-size airplanes to replace older 747s.

Over the next 20 years, the share of intermediate-size airplanes will increase from 19% to 22% of the world fleet. A total of 4,730 deliveries in this size category are forecast over the 20-year period.

30,000

20,000

10,000

0 1999 fleet

Retained

13,670

Airlines Will Require 22,315 AirplanesNumber of airplanes

2019 fleet

9,440retained

22,315added

31,755


Almost three-fourths of future deliveries will be single-aisle and regional jets. The mix of future airplane deliveries over the next 20 years is considerably different when measured by the number of airplanes rather than by airplane investment. In terms of investment dollars, the combined investment in single-aisle plus regional jets is more than that of intermediate-size airplanes. Investment in large air-planes is expected to reach 13% of the totalinvestment in new airplanes from 2000 to2019. In terms of airplane deliveries, 19%of the airplanes required over the next 20years will be smaller regional jets, and 55%will be the remaining single-aisle airplanes.Twenty-one percent of the market will beintermediate-size airplanes. Just 5% of allfuture deliveries will be large airplanes.

The market for very large airplanes is small.

Summing the projected requirements for 747-and-larger airplanes in all major travelmarkets reveals a total need for 1,010 airplanes over the next 20 years. Within this size category, about two-fifths of the requirement — or approximately 410 passenger jets — is for airplanes of the size of the 747-400. About one-quarter of the requirement is for freighters.

The market for airplanes larger than today’s 747-400 becomes significant only during the second decade of this forecast. By the end of the forecast period, most intercontinental routes will have at least daily service, and traffic volumes will support an airplane larger than the current 747. If airport capacity constraints are more severe, airlines may employ more of these airplanes. The projected requirement for airplanes of 500 seats or greater, however, is estimated at only 330 passenger jets over the study period.

The world fleet will more than double by 2019. The world fleet will reach 31,755 airplanes by the end of the 20-year forecast period. By 2019, smaller regional jets will represent 15% of the world fleet versus 7% today. The remaining single-aisle airplanes will represent 57% versus 67% of today’s world fleet. The percentage of intermediate-sizeairplanes will increase from 19% to 22% in 2019. The proportion of large airplanesis expected to gradually decline from 7% to 6% over the entire forecast period.

Strong regional differences exist in demand.

Airplane demand and size requirementsvary from region to region. North America,with its large number of experiencedtravelers and its need to replace an agingfleet, will require the most airplanes over the next 20 years.

2019

31,755airplanes

The World Fleet Will More Than Double Over the Next 20 Years

1999

13,670airplanes

57%

6%

15%

22%

67%

7% 7%

19%

Smaller regional jets

Single-aisle

Twin-aisle

747 and larger

Europe

Deliveries Vary by Region1999–2019

Number of airplanes 1999 delivery dollars, billions

* Includes Southwest Asia

NorthAmerica

Restof

World

8,000

6,000

4,000

2,000

0

600

450

300

150

0Asia- Pacific*

EuropeNorthAmerica

Restof

World

Asia- Pacific*

747 and larger

Twin-aisle

Single-aisle

Smallerregional

jets


Deliveries to North American airlines are expected to total 7,835 airplanes over the decade.European airlines are projected to take delivery of 6,800 airplanes. Asia-Pacific airlines willrequire delivery of 5,215 airplanes from now until 2019, and the airlines of the rest of the world will receive 2,465 airplanes.

Airplane deliveries to North American airlines are expected to be worth $430 billion over the next 20 years. Compared with other regions, a larger proportion of North Americandeliveries will be regional jets. Regional jets and single-aisle airplanes together account formore than 85% of the 7,835 deliveries. The value of the 6,800 airplane deliveries to Europeanairlines will total more than $400 billion. More than 80% will be single-aisle airplanes andregional jets. Airplane investment by Asia-Pacific airlines is expected to exceed $500 billion.Asia-Pacific carriers are projected to take delivery of more than three times the number of large airplanes as the airlines of North America. Airlines of the rest of the world are expected to invest $160 billion in new airplanes between 2000 and 2019.

The Freighter Forecast

Historic all-cargo fleet growth is impressive. Pioneering freighters such as the 707 and the DC-8 featured unprecedented air-freight speed and dependability. Still, in 1970, the pure jet freighter fleet numbered less than 100 airplanes. Widebody freighter service allowed a further improvement in efficiency andproductivity during the 1970s with the in-troduction of the 747 and the DC-10. Sincethen, the fleet has more than doubled every10 years to nearly 1,700 airplanes today.

Traffic rebounded in 1999. The air cargomarket recovered from the 1997 Asiancrises more quickly than forecastersanticipated. One contributing factor torecovery was the Asian ability to maintainstrong exports during the worst of thecrises because European and NorthAmerican economies remained robust.However, the level of Asian exports resulted in some dramatic directional traffic imbalances and yield disparities. Currently, increases in Asian inbound tonnage and successful rate hikesimposed by most major carriers are starting to relieve these imbalances.

World air cargo will grow faster than economic growth. Detailed market analysis in the Boeing World Air Cargo Forecast projects annual world air cargo growth of 6% to 7% over the next 20 years — approximately double the forecasted economic growth. This growthreflects continuing fundamental changes in global trade patterns such as supply chaininnovations, “just-in-time” production and distribution, and e-commerce sales. Othersignificant air cargo industry developments include service innovations and improve-ments, partnerships and alliances, and a proliferation of ACMI (airplane, crew, maintenance, insurance) and related services.

1970 1980 1990 1999

The Jet Freighter Fleet Has More Than Doubled Every 10 YearsNumber of airplanes2,000

1,500

1,000

500

0

LargeMediumSmall

Widebody

Standard-body


The forecast methodology is integrated and “bottom up.” The Cargo Forecast is developed in conjunction with the Current Market Outlook. First, regional forecasts from the CargoForecast are used to project air cargo traffic demand by domicile and as the basis fordetermining lift requirements. Next, Outlook research is used to obtain current and future lower hold capacities and under-lying airline-specific passenger-airplaneforecasts. Passenger baggage is subtractedafter applying load factor assumptions.The remaining lift defines the requiredfreighter fleet. This lift supplies the dif-ference between air cargo traffic (demand)and the portion carried in passenger-airplane lower holds (supply).

The Cargo Forecast analysis begins at the regional domicile level for each airline.Analysis considers current and changingvariables such as individual airline marketstrategies, services, fleet type, load factors,market share, airplane size, work rate, and freighter retirements. Maintaining total air cargo lift in balance with traffic, along with all these considerations, serves to form an exhaustive bottom-up freighter fleet forecast.

The air cargo industry will increasingly rely on freighters for lift. Freight customers increasingly expect faster, more timely, and more reliable service. Passenger-jet lower holdcapability is limited by high passenger load factors that leave less space for revenue cargo. Air cargo traffic growth should exceed passenger growth by more than 1 percent annually,which will further impact this situation. Additionally, many passenger aircraft alreadyoperate at payload and range limits, putting even more cargo on freighters. As a result, by 2019 it is anticipated that freighterswill provide as much as 44% of the totalair cargo capacity, an increase of 4percentage points or 10% from thecurrent share.

The freighter fleet will double over the next

20 years. Growth in air cargo is expectedto exceed passenger traffic increases forevery major regional market. Takingretirements into account, more than2,600 airplanes will be added to thefreighter fleet by 2019.

Freighter Fleet Forecast Methodology

“World Air Cargo Forecast”Projected Traffic

“Current Market Outlook”Passenger/Combi Airplane

Forecast

Freighter Airplane Requirement

Minus

Equals

LiftDemand

Lower-Hold LiftSupply

Needed Freighter Lift Supply

Widebody Freighters Dominate a Future FleetThat Nearly Doubles 2019

31%

15%

28%19%

12%26%

29%

40%

3,200freighters

1999

1,680freighters

Small*

Medium std-body*

Medium widebody*

Large*

* Freighter Size Categories Small: < 30 tons Medium standard-body: 30–50 tons Medium widebody: 40–65 tons Large: > 65 tons


Annual additions dating back to 1970 of 90 to 100 freighters will accelerate to approximately 130 every year over the forecast period. Widebody freighters, currently one-third of the fleet, will supply more than 65% of these additions and end the periodcomprising over half the fleet. This direction is consistent with the trends of increasedshipment weights and load factors, resulting in an average freighter airplane payloadincrease of 25% fleetwide. Carriers have begun to make replacement decisions based on such growth, for example, transitioning from 727Fs to 757Fs and 707F/DC-8Fs to medium widebody freighters.

There are also significant increases in the world’s fleet of small-size freighters, and nearly 800 units will be added by 2019 to serve important feeder and niche markets.Wide availability of commonly configured 737-300 passenger airplanes, which have payload, range, and conversion potential,will make this model type predominantin the small-size category.

The conversion market will grow. Two ofthe factors resulting in a larger share ofconverted freighters for the world’s fleetare the increasing availability of desir-able, affordable airplanes and renewedfocus and corporate emphasis on themodification business by the two majorairplane manufacturers. As with produc-tion models, breadth of product family isimportant, and both manufacturerscontinue to expand their offerings.

Nearly 70% of the more than 2,600 freighter fleet additions during the next 20 years,satisfying both market growth and replacement needs, will come from modified passengerand combi airplanes. Half of these conversions will be from widebodies into freighters.Within the large-size (747F) category, operators tend to rely more on production freighters, and 45% of additions will be new airplanes.

800 new production freighters will enter the fleet by 2019. Although new aircraft will comprise only 30% of the world freighter fleet by 2019, airlines increasingly choose the technical advantages, reliability, and fuel efficiency of new aircraft. Forty-five percent of these will be in the large category, one-third will be medium sized, and 22% will be small sized. The value of these new freighters totals $105 billion.

3,000

2,000

1,000

Nearly 70% of Added Freighters Come From ConversionsFreighter aircraft, units

0 1999 2019

Current/retained fleet

Modifiedfreighters

Productionfreighters

The Airplane. Commercial aviation, an inventionof the 20th century, takes us into the 21st centurywith unprecedented capability and reliability.

The Airplane. Commercial aviation, an inventionof the 20th century, takes us into the 21st centurywith unprecedented capability and reliability.

Appe

ndic

esAp

pend

ices


World Traffic by Regional Flow, RPKs in billions Appendix A


1985 1990 1995 1996 1997 1998

Africa–Africa 13.540 14.689 14.775 15.335 16.578 17.340Africa–China 0.181 0.311 1.274 1.834 1.900 1.599Africa–Europe 43.037 47.732 57.178 66.897 75.259 79.248Africa–Middle East 5.156 7.394 6.479 6.973 7.490 8.187Africa–North America 1.220 1.298 2.640 3.126 4.599 4.201Africa–Oceania 0.354 0.686 1.192 1.633 1.883 1.815Africa–South America 0.985 1.000 1.373 1.765 1.464 1.274Africa–Southeast Asia 0.280 0.909 3.226 3.623 3.406 3.437Africa–Southwest Asia 0.751 0.818 1.025 1.585 1.458 1.577

Central America–Central America 12.820 14.306 18.267 17.858 18.409 19.440Central America–Europe 17.868 27.647 44.193 47.507 51.720 56.737Central America–North America 43.339 63.714 71.097 72.625 73.441 77.901Central America–South America 3.287 3.499 4.271 4.595 5.269 6.608

China–China 8.436 18.254 57.509 61.156 61.679 62.270China–Europe 9.577 16.927 26.611 29.352 32.407 34.157China–Middle East 1.989 2.035 1.432 1.370 1.734 1.807China–North America 7.807 13.434 21.630 24.143 27.094 29.670China–Northeast Asia 6.754 10.916 15.998 17.343 18.037 16.738China–Oceania 3.002 5.810 9.234 10.674 11.102 11.435China–Southeast Asia 8.081 14.489 23.032 27.200 28.532 26.764China–Southwest Asia 0.776 1.145 1.309 1.799 1.696 1.749

CIS Region–CIS Region 175.814 224.240 63.395 50.764 44.489 37.816CIS Region–International 15.863 24.098 33.918 39.483 42.595 44.511

Europe–Europe 170.048 258.346 306.836 324.374 353.176 384.229Europe–Middle East 43.436 41.512 44.920 47.897 51.861 54.869Europe–North America 158.599 230.688 278.895 296.434 324.061 351.578Europe–Northeast Asia 17.025 29.347 46.550 54.561 58.381 59.665Europe–South America 12.250 22.309 32.930 37.211 40.262 46.260Europe–Southeast Asia 26.600 46.386 65.884 72.032 81.483 82.868Europe–Southwest Asia 11.859 17.470 20.666 23.353 22.697 24.354

Middle East–Middle East 17.685 19.462 20.713 21.789 22.373 23.871Middle East–North America 5.012 6.560 10.309 11.258 11.548 14.587Middle East–Northeast Asia 0.069 0.071 0.328 0.814 0.877 0.307Middle East–Southeast Asia 15.136 10.980 20.584 20.442 20.832 20.061Middle East–Southwest Asia 14.505 16.583 23.194 23.762 24.261 25.934

North America–North America 470.633 589.055 671.918 722.119 755.747 776.664North America–Northeast Asia 46.880 95.162 121.512 129.111 139.994 129.993North America–Oceania 11.008 18.972 25.203 25.916 26.067 27.813North America–South America 14.460 19.615 35.885 38.339 43.015 46.217North America–Southeast Asia 8.013 15.324 25.886 25.981 30.705 28.540

Northeast Asia–Northeast Asia 32.273 50.016 67.404 71.708 75.382 74.353Northeast Asia–Oceania 6.055 12.879 31.823 35.322 36.383 25.322Northeast Asia–Southeast Asia 15.998 32.512 44.335 47.832 50.703 45.734Northeast Asia–Southwest Asia 0.464 0.560 0.616 0.623 1.031 1.160

Oceania–Oceania 18.614 26.241 42.671 44.547 45.808 46.511Oceania–South America 0.115 0.688 0.641 0.757 0.756 1.020Oceania–Southeast Asia 12.233 24.286 33.065 36.769 38.936 36.989

South America–South America 29.477 33.841 39.670 42.248 46.600 51.959

Southeast Asia–Southeast Asia 17.665 29.881 53.811 58.223 61.136 48.909Southeast Asia–Southwest Asia 5.658 5.804 8.104 8.873 9.540 9.588

Southwest Asia–Southwest Asia 10.471 11.602 15.205 16.117 16.130 15.775

World total 1573.158 2181.501 2570.614 2747.058 2921.984 3001.416

Appendices

World Traffic by Regional Flow, RPKs in billions

Appendices 41

2000–2009 2000–20191999 2004 2009 2014 2019 %/year %/year

Africa–Africa 18.034 26.729 38.028 49.236 63.192 7.7 6.5Africa–China 1.839 2.211 2.878 3.337 3.777 4.6 3.7Africa–Europe 91.135 118.496 157.847 201.522 249.416 5.6 5.2Africa–Middle East 8.923 10.098 13.061 16.055 19.577 3.9 4.0Africa–North America 4.873 6.279 8.040 9.631 11.446 5.1 4.4Africa–Oceania 2.069 2.803 3.486 4.058 4.646 5.4 4.1Africa–South America 1.402 1.981 2.990 4.016 5.227 7.9 6.8Africa–Southeast Asia 3.248 4.554 6.358 7.834 9.400 6.9 5.5Africa–Southwest Asia 1.530 2.072 3.002 4.133 5.586 7.0 6.7

Central America–Central America 21.384 28.866 42.712 59.636 81.043 7.2 6.9Central America–Europe 61.162 73.726 94.100 119.968 149.349 4.4 4.6Central America–North America 80.238 99.782 124.761 153.407 188.591 4.5 4.4Central America–South America 6.046 8.825 12.449 16.990 22.792 7.5 6.9

China–China 63.827 104.587 170.576 249.521 362.159 10.3 9.1China–Europe 36.719 44.443 59.598 76.635 96.350 5.0 4.9China–Middle East 1.753 1.986 2.541 3.070 3.691 3.8 3.8China–North America 31.331 38.043 48.719 60.182 75.081 4.5 4.5China–Northeast Asia 17.743 22.799 33.667 47.668 65.338 6.6 6.7China–Oceania 11.149 14.306 17.351 19.969 23.014 4.5 3.7China–Southeast Asia 26.898 33.424 45.334 57.290 71.810 5.4 5.0China–Southwest Asia 1.224 2.683 3.786 5.041 6.624 12.0 8.8

CIS Region–CIS Region 38.194 39.152 53.771 70.282 91.412 3.5 4.5CIS Region–International 42.063 52.838 73.664 97.780 127.479 5.8 5.7

Europe–Europe 413.046 526.603 686.967 885.185 1097.171 5.2 5.0Europe–Middle East 60.355 73.471 94.638 118.007 142.888 4.6 4.4Europe–North America 389.197 454.239 552.764 664.332 787.555 3.6 3.6Europe–Northeast Asia 59.963 82.017 116.861 164.235 217.374 6.9 6.7Europe–South America 51.118 62.601 87.708 118.805 155.899 5.5 5.7Europe–Southeast Asia 89.912 111.182 149.334 190.584 235.698 5.2 4.9Europe–Southwest Asia 24.719 35.537 49.270 66.615 87.262 7.1 6.5

Middle East–Middle East 25.303 27.555 35.818 45.314 57.516 3.5 4.2Middle East–North America 17.213 18.516 22.701 27.055 31.816 2.8 3.1Middle East–Northeast Asia 0.415 0.716 1.031 1.481 2.067 9.5 8.4Middle East–Southeast Asia 20.462 22.321 28.483 34.339 40.631 3.4 3.5Middle East–Southwest Asia 27.490 31.772 42.503 54.780 69.103 4.5 4.7

North America–North America 810.061 915.987 1041.640 1204.813 1410.527 2.5 2.8North America–Northeast Asia 137.402 168.173 229.670 312.762 414.513 5.3 5.7North America–Oceania 29.816 33.087 37.533 42.526 48.661 2.3 2.5North America–South America 45.431 62.042 84.073 108.396 139.211 6.3 5.8North America–Southeast Asia 32.822 40.011 50.297 62.368 76.649 4.4 4.3

Northeast Asia–Northeast Asia 78.666 101.958 157.857 239.441 339.496 7.2 7.6Northeast Asia–Oceania 22.284 35.032 45.993 60.057 76.351 7.5 6.4Northeast Asia–Southeast Asia 46.878 64.333 95.173 134.974 183.641 7.3 7.1Northeast Asia–Southwest Asia 1.276 1.569 2.374 3.527 4.993 6.4 7.1

Oceania–Oceania 47.209 57.480 63.322 70.652 79.235 3.0 2.6Oceania–South America 1.275 1.302 1.688 2.145 2.688 2.8 3.8Oceania–Southeast Asia 41.613 47.653 59.233 70.701 83.944 3.6 3.6

South America–South America 52.218 76.374 121.027 174.582 246.105 8.8 8.1

Southeast Asia–Southeast Asia 51.354 68.662 97.439 128.576 166.616 6.6 6.1Southeast Asia–Southwest Asia 9.780 13.277 19.085 26.049 34.952 6.9 6.6

Southwest Asia–Southwest Asia 15.696 25.929 40.055 59.426 86.097 9.8 8.9

World total 3175.760 3900.082 5033.259 6408.989 8055.662 4.7 4.8


Passenger and Freighter Fleet Development Appendix BYear-end 2000–2019 Removed Year-end

Seat category* 1999 new deliveries from service 2019

Single-aisleSmall and intermediate regional jets 893 4,194 218 4,86990–120 and large regional jets 2,433 3,049 1,395 4,087121–170 4,744 6,663 1,817 9,590171–240 942 2,483 336 3,089

Twin-aisleSmall 1,209 2,055 494 2,770Intermediate 963 2,322 316 2,969Large 810 746 372 1,184

Total passenger airplanes 11,994 21,512 4,948 28,558

Year-end 2000–2019 Removed Converted to Year-end1999 new deliveries from service freighter 2019

FreighterSmall 670 178 516 597 929Medium 688 266 383 809 1,380Large 318 359 189 400 888

Total freighter airplanes 1,676 803 1,088 1,806 3,197

Total 13,670 22,315 6,036 31,755

* Categories based on 36-/32-inch mixed-class configuration (includes freighter and combi airplanes in appropriate passenger category; the twin-aisle and the large categories also show typical three-class configurations).

Sales of Commercial Aviation Support Services1999 2019 2000–2019

1999 dollars, in billions annual sales annual sales cumulative sales

Airplane servicing 13.8 32.3 441

Heavy airplane maintenance 18.5 43.0 588

Engine repair (off wing) 8.4 19.6 268

Airframe component repair 12.3 28.8 394

Major airplane modification 1.8 3.5 43

Airframe and engine repair parts 8.1 18.8 257

Flight crew training 1.7 3.4 49

Airport and route infrastructure services 21.4 43.0 622

Used airplane remarketing 0.7 1.4 20

Total 86.7 193.8 2,682

Appendices 43

World Airline Fleet Distribution1999 year-end 2019 year-end

Seat category* Models Units Percent Units Percent

Single-aisle F 28 906 6.6 4,869 15.3Small and intermediate F 70regional jets Bac 1-11

RJ70/RJ85; BAe 146-100/-200Regional jets from Bombardier, Embraer, and Fairchild

90–120 and large 727-100 2,820 20.6 4,224 13.3regional jets 737-100/-200/-500/-600

717-200DC-9MD-87F 100RJ100/BAe 146-300CaravelleConcordeA318Regional jets from Bombardier, Embraer, and Fairchild

121–170 737-300/-400/-700/-800 5,014 36.7 10,382 32.7727-200720A319/A320Trident-3MercureMD-81/-82/-83/-88/-90DC-8-10/-20

171–240 737-900 1,371 10.0 3,476 10.9757707-300B/CA321DC-8-30/-40/-50/-60/-70

Twin-aisle 767 1,381 10.1 3,658 11.5230–310 A300(181–249) A310

A330-200

311–399 777-200/-300 1,157 8.4 3,415 10.7(250–368) A330-300

A340L-1011DC-10MD-11

Large 747 1,021 7.5 1,731 5.5747 and larger 747X(>400) A3XX

Total 13,670 100.0 31,755 100.0



Delivery Distribution, history 1952–19991999 dollars

Seat category* Models (billions) Percent Units Percent

Single-aisle F 28 30.0 3.0 1,326 7.4Small and intermediate F 70regional jets Bac 1-11

RJ70/RJ85; BAe 146-100/200Regional jets from Bombardier, Embraer, and Fairchild

90–120 and large 727-100 111.1 11.2 4,165 23.2regional jets 737-100/-200/-500/-600

717-200DC-9MD-87F 100RJ100/BAe 146-300CaravelleConcorde

121–170 737-300/-400/-700/-800 243.6 24.5 5,981 33.4727-200707-120/-220720A319/A320Trident-3MercureMD-81/-82/-83/-88/-90DC-8-10/-20

171–240 757 126.5 12.7 2,250 12.5707-300B/CA321DC-8-30/-40/-50/-60

Twin-aisle 767 143.8 14.4 1,569 8.8230–310 A300(181–249) A310

A330-200

311–399 777-200/-300 164.0 16.5 1,400 7.8(250–368) A330-300

A340L-1011DC-10MD-11

Large 747 175.8 17.7 1,236 6.9747 and larger(>400)

Total 994.8 100.0 17,927 100.0


Appendices 45

Delivery Distribution, future 2000–20191999 dollars

Seat category* Models (billions) Percent Units Percent

Single-aisle RJ70/RJ85 84.7 5.7 4,194 18.8 Small and intermediate Regional jets from Bombardier, regional jets Embraer, and Fairchild

90–120 and large 737-600 102.9 6.9 3,051 13.7 regional jets 717-200

A318RJ100Regional jets from Bombardier, Embraer, and Fairchild

121–170 737-700/-800 328.8 22.0 6,839 30.6 MD 90A319/A320

171–240 737-900 160.3 10.7 2,490 11.2 757A321

Twin-aisle 767 242.9 16.2 2,314 10.4 230–310 A300(181–249) A310

A330-200

311–399 777-200/-300 376.2 25.1 2,417 10.8 (250–368) A330-300

A340MD-11

Large 747-400 201.1 13.4 1,010 4.5 747 and larger 747X(>400) A3XX

Total 1,496.9 100.0 22,315 100.0

* Categories based on 36-/32-inch mixed-class configuration (includes freighter and combi airplanes in appropriate passenger category; the twin-aisle and the large categories also show typical three-class configurations)


Results by Region of the World Appendix CAfrica Asia-Pacific Europe

2000–2019 2000–2019 2000–2019

Traffic Growthto/from: %/year %/year %/yearAfrica 6.5 5.1 5.2Asia-Pacific 5.1 6.7 5.7Europe 5.2 5.7 5.0Middle East 4.0 4.3 4.4Latin America 6.8 3.8 5.1North America 4.4 5.0 3.6

Airplane DeliveriesNumber of airplanesSingle-aisle and regional jets 358 2,626 5,496 Twin-aisle 103 1,975 1,128 747 and larger 18 613 173

Total 479 5,214 6,797

Delivery dollars, billions (1999)Single-aisle and regional jets 14.9 116.1 222.6Twin-aisle 13.6 267.1 144.2747 and larger 3.3 123.0 34.5

Total 31.8 506.2 401.3

Middle East Latin America North America2000–2019 2000–2019 2000–2019

Traffic Growthto/from: %/year %/year %/yearAfrica 4.0 6.8 4.4Asia-Pacific 4.3 3.8 5.0Europe 4.4 5.1 3.6Middle East 4.2 3.1Latin America 7.7 4.9North America 3.1 4.9 2.8

Airplane DeliveriesNumber of airplanesSingle-aisle and regional jets 223 1,238 6,633Twin-aisle 286 230 1,009747 and larger 12 194

Total 521 1,468 7,836

Delivery dollars, billions (1999)Single-aisle and regional jets 11.3 49.5 264.4Twin-aisle 36.9 29.8 127.5747 and larger 2.2 38.2

Total 50.4 79.3 430.1

Appendices 47

Results by Country, 2000–2019 Appendix DInvestment*

Category 1999 dollars, billions Airplane deliveries*

United States 395 7,190

China 137 1,790

Japan 121 990

United Kingdom 74 1,060

Germany 65 1,070

France 58 870

Australia, Canada, Singapore, South Korea 30–50 240–650

Brazil, India, Italy, Netherlands, Spain, Taiwan 20–30 200–500

Argentina, Belgium, Malaysia, Mexico,Pakistan, Saudi Arabia, South Africa, Switzerland, Thailand, Turkey 10–20 100–360

Austria, Denmark, Egypt, Finland, Greece, Indonesia, Ireland, Israel, New Zealand, Norway, Philippines, Poland, Sweden, United Arab Emirates 5–10 40–210

Algeria, Bahrain, Bangladesh, Brunei, Chile, Colombia, Cuba, Cyprus, El Salvador, Fiji, Hungary, Iceland, Jamaica, Kenya, Kuwait, Lebanon, Luxembourg, Malta, Mauritius, Morocco, Portugal, Qatar, Sri Lanka, Trinidad and Tobago, Tunisia, Venezuela, Vietnam 1–5 10–110

*Totals shown are per country in each category.


Market Outlook Regions Appendix E

North America

Central America

South America

Europe

Africa

Middle East

CIS Region

Southwest Asia

China

Northeast Asia

Southeast Asia

Oceania

Market Outlook regions have been formed to best illustrate major world traffic flows.They do not always exactly match political or geographic regions.

Asia-Pacific

Appendices 49

ACMI Variation of a wet-lease arrangement in which aircraft, crew, maintenance, and insurance are supplied by the lessor

ASK Available seat-kilometers — the number of seats an airline provides multiplied by the number of kilometers they are flown; a measure of airline capacity

ATK Available ton-kilometers — the number of tons capable of being carried multiplied by the number of kilometers they are flown

CIS Commonwealth of Independent States — states of the former Soviet Union

GDP Gross domestic product — the total output of goods and services produced within a country; the broadest measure of economic output with the exception of GNP (gross national product), which includes a country’s nationals who work in other countries.

Load factor Revenue passenger-kilometers divided by available seat-kilometers

Route km The total distance between all airport pairs served at least once a week nonstop

RPK Revenue passenger-kilometers — the number of passengers multiplied by the number of kilometers they fly

RTK Revenue ton-kilometers — the number of tons carried multiplied by the number of kilometers they are flown

Scope clause Provisions in US Major airlines’ pilot contracts that impose limits on the operation of jet airplanes used by regional “partner” airlines. Limits on seat count (generally 70 seats or less), weight, cruise speed, or ratio of regional jets to standard jets are the most common provisions.

Stage 2 and A measure of noise; newer Stage 3 airplanes are quieter and Stage 3 are allowed to operate into more airports.

Travel share A ratio measuring the portion of GDP that a country devotes to air travel

Yield Revenues divided by revenue passenger-kilometers; it represents an aggregate of all the airfare and airline charges and is measured on a per-kilometer basis.

Glossary Appendix F


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World demand for commercial airplanes and aviation support ... · future of commercial airplanes and aviation support services. The sources used in the preparation of the Outlook