Growing Horizons Global Market Forecast 2017 - 2036 John Leahy - PowerPoint PPT Presentation

Growing Horizons Global Market Forecast 2017 - 2036 John Leahy Chief Operating Officer, Customers

Global Market Forecast 2017: Highlights vs. % change World Fleet Forecast 2016 2036 GMF16 2016-2036 RPK (trillions) 7.0 135% 16.5 +3.1% Passenger Aircraft Fleet 18,890 40,120 +6.4% 112% New passenger aircraft 34,166 +1,741 deliveries 50% Dedicated Freighters 1,610 2,410 +14.2% New freighter aircraft 733 +88 deliveries Total New Aircraft Deliveries 34,899 +1,829 Notes: Passenger aircraft (≥ 100 seats) | Jet freight aircraft (>10 tonnes) 2 Source: Airbus GMF 2017

20-year demand for almost 35,000 new passenger and freighter aircraft 24,807 single-aisle aircraft +1,277 vs GMF 2016 5.3 8,686 twin-aisle aircraft $US trillion +626 1,406 very large aircraft -74 34,899 new aircraft +1,829 Notes: Passenger aircraft (≥ 100 seats) | Jet freight aircraft (>10 tonnes) 3 Source: Airbus GMF 2017

Single-aisle represent 71% of units, and widebodies represent 54% of value Number of aircraft 30,000 24,810 25,000 20,000 15,000 8,690 10,000 5,000 1,410 0 Single-aisle Twin-aisle Very Large Aircraft % units 71% 25% 4% % value 46% 44% 10% Notes: Passenger aircraft (≥ 100 seats) | Jet freight aircraft (>10 tonnes), Rounded figures to the nearest 10 4 Source: Airbus GMF 2017

Fleet in service evolution Number of aircraft* 45,000 40,000 35,000 22,030 Growth 30,000 20-year 34,900 25,000 new deliveries 20,000 15,000 12,870 Replacement 20,500 10,000 5,000 7,630 Stay - Beginning 2017 2036 New Deliveries Notes: Passenger aircraft (≥ 100 seats) | Jet freight aircraft (>10 tonnes), Rounded figures to the nearest 10 5 Source: Airbus GMF 2017

2016 was a good year Number of countries 142 countries 81% of world population 90 78 88% of world GDP 80 70 64 60 50 42 40 30 20 20 10 0 <0% [0% - 5%] [5% - 10%] >10% % - ASK growth 2015-2016 6 Source: ICAO, OAG, IHS Economics, Airbus GMF

World load factors remain at record levels World passenger load factor - % 85% 80% 80% 75% 70% 69% 65% 60% 1996 2001 2006 2011 2016 7 Source: ICAO, OAG, IHS Economics, Airbus GMF

Air transport growth is highest in expanding regions Yearly RPK growth 2016 - 2036 Emerging/Developing China India 6.4 Middle East +5.8 % Rest of Asia Africa CIS billion people Latin America in 2016 Central Europe Advanced Western Europe 1 +3.2 % Israel North America Japan billion people Singapore in 2016 South Korea Australia/New Zealand 8 Source: IHS Economics, Airbus GMF 2017

Middle Class to almost double over the next 20 years People in Middle Class* (million) Forecast 6,000 4,950 5,000 3,900 4,000 2,900 3,624 Emerging countries 3,000 2,695 1,950 2,000 1,822 1,350 981 Developing countries 501 456 1,000 322 216 144 73 Advanced countries 850 865 859 828 781 0 1996e** 2006 2016 2026 2036 World Population (M.) 5,820 6,600 7,430 8,200 8,900 39% 47% % of world population 56% 23% 30% Rounded total to nearest 50 * Households with yearly income between $20,000 and $150,000 at PPP in constant 2016 prices 9 ** Estimate for 1996 split by region Source: Oxford Economics, Airbus GMF

Almost 50% of world’s private consumption to come from emerging markets World private consumption (trillion 2010 $US) 90 Forecast 80 70 60 46% 50 Emerging/Developing countries 40 34% 30 23% 54% 20 Advanced countries 66% 10 77% 0 1996 2000 2004 2008 2012 2016 2020 2024 2028 2032 2036 10 Source: IHS Economics, Airbus GMF

~60% of international tourists to be transported by air in 2036 International tourist arrivals (million) 2,600 >2.4bn tourists Forecast 2,400 2,200 2,000 1,800 Tourism by surface (Road , Water, Rail) 1,600 1,400 >1.2bn tourists 1,200 Tourism by Air 1,000 800 600 400 200 0 2006 2011 2016 2021 2026 2031 2036 Share of tourists travelling by air 54% 62% 48% 51% 57% 59% 61% 11 Source: UNWTO, Sabre GDD, Airbus GMF

Low Cost Carrier market penetration has increased significantly since 2006 Low Cost Carrier seats offered on domestic and intra-regional flights (million) Europe-CIS North America x2.6 38m x1.2 25m Asia-Pacific Middle East x4.8 >39m 2006 2016 2006 2016 x16.4 4m 2006 2016 Africa Latin America 2006 2016 x5.7 0.6m x3.9 9m 2006 2016 2006 2016 Source: OAG – September of each year, Airbus GMF 12

~30% of the people from emerging countries took a flight in 2016… 2016 trips per capita 10 Africa Asia/Pacific CIS Europe 1 Latin America United States , 2016 1.8 trips per capita Middle East North America Bubble size proportional to population China , 2016 0.4 trips per capita 0.1 India , 2016 India , 2016 0.1 trips per capita 0.1 trips per capita 0.01 0 10 20 30 40 50 60 70 80 2016 real GDP per capita (2010 $US thousands at Purchasing Power Parity) 13 Source: Sabre, IHS Economics, Airbus GMF 2017

… in 2036, it will be 83% 2036 trips per capita 10 Africa Asia/Pacific CIS Europe United States , 2036 1 Latin America 2.5 trips per capita China , 2036 Middle East 1.3 trips per capita North America Bubble size proportional to population India , 2036 0.4 trips per capita 0.1 0.01 0 10 20 30 40 50 60 70 80 2036 real GDP per capita (2010 $US thousands at Purchasing Power Parity) 14 Sources: Sabre, IHS Economics, Airbus GMF 2017

Air travel has proved to be resilient to external shocks World annual traffic (trillion RPKs) Asian WTC Financial Crisis Attack SARS Crisis Oil Crisis Oil Crisis Gulf Crisis 8 7 +60% 6 x2 growth over the last 10 years 5 since 9/11 4 3 2 1 0 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 15 RPK = Revenue Passenger Kilometre Source: ICAO, Airbus GMF

Traffic doubles every 15 years World annual traffic (trillion RPKs) Airbus GMF 2017: 4.4% growth p.a. 18 ICAO total traffic 16 x2 14 12 10 8 x2 6 x2 4 2 0 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031 2036 16 RPK = Revenue Passenger Kilometre Source: ICAO, Airbus GMF 2017

Asia-Pacific continues to grow in importance Traffic by airline domicile (trillion RPKs) Share of Share of 20-year 0 1 2 3 4 5 6 7 2016 RPKs CAGR 2036 RPKs Asia-Pacific 2016 traffic 2017-2036 traffic 30% 5.6% 38% Europe 26% 21% 3.4% North America 22% 16% 2.6% Middle East 10% 6.1% 13% Latin America 5% 4.5% 5% CIS 4% 4.0% 4% 3% 3% Africa 5.3% 17 Source: Airbus GMF 2017

Domestic Chinese traffic to become number one Annual traffic per leg flow Domestic PRC x3.6 Domestic USA x1.5 Western Europe - USA x1.8 Intra-Western Europe x1.6 x2.5 Western Europe - Middle East Domestic Asia Emerging x3.7 Middle East - USA x4.5 Indian Subcontinent - Middle East x3.4 Domestic India x5.4 2016 PRC - USA x3.6 Asia Emerging - Middle East x3.4 2036 Asia Emerging - PRC x3.8 Western Europe - PRC x2.2 Central Europe - Western Europe x2.6 Western Europe - South America x2.0 Asia Developped - Asia Emerging x2.5 Asia Developped - PRC x3.0 Domestic Brazil x2.6 Intra-Middle East x3.1 South America - USA x2.3 0.0 0.5 1.0 1.5 2.0 Trillions RPKs 18 RPK = Revenue Passenger Kilometre Source: ICAO, Airbus GMF 2017

Trend towards densification, especially for Low Cost Carriers All Airlines average single-aisle aircraft capacity per flight LCCs average single-aisle aircraft capacity per flight 170 170 165 160 156 160 155 150 150 150 143 143 140 140 130 130 120 120 110 110 100 100 2006 2011 2016 2006 2011 2016 19 Note: Aircraft capacity above 100 seats and below 210 seats Source: OAG – September of each year, Airbus GMF

A320 Family cabin enablers can raise A320 Family seat counts by up to 10% Space-Flex New doors rating Airbus Slim-line Smart-Lav Cabin-Flex seats New rear galley Increased exit limit New lavatory configuration design A321neo new door configuration A319 156  160 seats A320 180  189 seats A321 220  240 seats 20

A320 deliveries above 180 seats (% total deliveries) Densification 60% trend 50% 40% Airlines are choosing cabin 30% enablers to increase seat count beyond 180 20% seats 10% 0% 2014 2015 2016 2017 2018 Source: Airbus 21

A320 Family deliveries A319 A320 A321 100% Upsizing 13% 16% 18% 21% 31% 37% 80% 41% The single-aisle 60% market continues to move towards 74% 73% 73% higher capacity 71% 40% 62% aircraft 57% 59% 20% 13% 11% 8% 8% 7% 5% 0% 1% 2010 2011 2012 2013 2014 2015 2016 Source: Airbus, End December 2016, includes NEO 22

A321 – growing in popularity 65 65 % of net orders 41 41 % of deliveries of Airbus single aisles in 2016 were A32 A321 s 23

Capacity Range Fuel per seat A321neo vs. 737 MAX 10 +10 seats +1,000nm 10% lower A321neo Up to 240 seats & 4,000nm range with unbeatable fuel efficiency 24

A330neo … beats the 787 on comfort, fuel and economics at $2 $20m 0m to $2 $25m 5m lower capital cost 25

A350 XWB 25% lower • operating cost • fuel burn • CO 2 emissions Compared to previous generation 26

10% of all Heathrow passengers In 2016, 10% of all passengers at London Heathrow travelled on 54 daily A380 flights* * Inbound and outbound 27