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Which Type of Plane for Central Aisa?

Market Seems to Prefer Smaller Jets

Thursday 15 June 2017, by Nazar TAMASHEVSKA

In Central Asia, civil aviation is one of the rapidly expanding sectors. Which economic model should local companies adopt, especially smaller ones? The analysis of the famous consultant Richard Aboulafia in Aviation Week answers this question. Planners know only too well that long-term forecasts are the basis for effective planning activities when considering the billon-dollar infrastructure projects that are required to support the airport and airspace capacities that growth will demand.

For Aboulafia , Boeing’s long-running Current Market Outlook (CMO) has an “enviable” track record and its 20-year jetliner demand forecast “has been a reliable predictor of total deliveries”, thanks largely to the consistent long-term growth trends seen in the aviation industry. However, he notes that the market’s composition is diverging from expectations and looks set to continue this pattern. He thinks that may offer important lessons for future product-launch decisions.

Boeing’s 2007 CMO is now at its halfway mark. In this forecast, Boeing predicted that 17,650 single-aisle jets, 6,290 twin-aisle jets and 960 very large jets would be delivered by 2026. Everyone, even Teal Group, was optimistic about the market’s fondness for very large jets, so we can convert them into regular twin-aisles by multiplying that 960 figure by 1.3, a rough way of normalizing capacity. The result is 7,538 twin-aisles.

After analyzing actual figures, Aboulafia concludes: Clearly, the 2007 CMO underestimated the likely single-aisle total, by a significant margin (Teal’s forecast, which is more conservative than the manufacturers’ calls for 10,500, or 1,340 more than the CMO). Yet the 2007 CMO twin-aisle forecast shows the opposite trend. The last 10 years saw 2,890 twin-aisle jets (adjusted for very large aircraft) delivered, leaving 4,648 to be delivered over the next 10, according to the CMO.

Even the very successful 777 seems to be declining. While the 777X offers great promise, 77% of the orderbook is from the big three Gulf carriers, Emirates, Etihad Airways and Qatar Airways. Current geopolitical and economic trends in that part of the world are hardly encouraging for airline traffic or large jet demand.

The market’s behaviour over the past 10 years seems to favour Airbus’s approach, thinks Aboulafia . He recommends Boeing to create a jet with twin-aisle capabilities with single-aisle economics, which he admits to be a very difficult task.

According to the latest ICAO long-term traffic forecasts that were published in September 2016, world scheduled passenger traffic, expressed in terms of Revenue Passenger Kilometres (RPK), will grow 4.6% annually until 2032. By the year 2032, the world scheduled RPKs are expected to reach 12.4 tln, more than doubling the 6.6 tln in 2015.

The fastest growing route group is Domestic Central Southwest Asia, which is estimated to grow at around 10%. The growth rates of route groups in and between Africa, Central America/Caribbean and Middle East, are close to the global growth rate. Route groups in and between mature markets (including Europe, North America, and North Asia), have a lower estimate of growth rate.

Global freight traffic is expected to grow 4.4% annually over the same time period as passenger forecasts, and reach 400 bln Freight Tonne-Kilometres (FTKs). The Middle East has the highest forecast of annual growth outpacing global estimate by about 2.8%. The growth rate of Asia and Pacific is close to the global estimate, at 4.7%. Europe, Latin America/Caribbean, and North America will grow at a slightly slower pace than Asia and Pacific while Africa has the lowest annual growth rate of 2.1%.


View online : Halftime Of 20-Year Outlook, Market Prefers Smaller Jets

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