Monday, July 9, 2007

Commercial Aircraft Market Forecast

Information and data source - Bombardier, IATA, EIA

In spite of the financial turbulence felt across the globe, the fundamental s driving the aviation industry remains secure over the long-term. Over the next 20 years, Bombardier forecasts demand of 12,400 aircrafts in the 20 to 149 seat market.  The revenue generation from this segment is pegged at USD 588 B.

US Information Energy Administration predicts the price of oil will average USD 109 per barrel. Projected increase in fuel prices, downward yield pressures, and environmental concerns will shift aircraft demand to larger capacity, more fuel efficient types. Manufacturers will work with airlines to develop new aircraft that optimize economics and performance for the capacity segments they serve.

The International Air Transportation Association (IATA) predicts airline revenues will continue to decline, with net losses for the industry of USD 9.0 billion by end of 2009. IATA predicts by end of 2009, US airlines will incur a loss of USD 1 B and losses for Asia Pacific and European airlines are expected to be the highest in spite of relatively lower fuel prices in the near term.

The 20 to 149-seat market is subdivided into three segments:

20 to 59-seat segment - will experience low demand for new aircraft, but will have a healthy secondary market demand. This segment is expected to migrate to developing markets with growth of the regional aircraft industry. This segment will primarily be used in providing direct services to secondary airports and will feed mainline carriers at primary airport.

The 60 to 99-seat segment - is in a growth phase. This segment is expected to generate USD 220 B. The numbers of jet liners are expected to triple (from 2100 to 5800 in 20 years). This increase will be influenced by mainline carriers as they evolve to permit improved network capacity optimization.

100 to 149-seat segment - represents the next large growth opportunity. New technology aircraft designed specifically for this segment will enter into service during the next five years. Over the next 20 years, 6,300 aircraft will be delivered generating manufacturing revenues of more than USD 362 B in this segment.

Bombardier Commercial Aircraft expects 12,400 deliveries of 20 to 149-seat aircraft over the next 20 years. Half of the existing fleet is anticipated to retire thereby causing a net increase by 48% to 17,000 from 11,500 units.

Information and data source - Bombardier Commercial Aircraft, IATA, EIA
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