Airbus GMF 2016-2035: Mapping Demand - Full Book

Global Market Forecast
Mapping
Demand
2016 / 2035
Mapping Demand 003
Introduction
As long as 2000 years ago, the Romans mapped
their world showing towns, cities and the
transportation links between them.
They understood that efficiently connecting
their population centres meant that a higher
level of society and wealth creation was possible.
They also understood the need to communicate
this graphically for people to access and use
the knowledge they contained.
Today, in aviation and in the GMF we still use

maps, in all their forms, to find our way and to
communicate knowledge. What is also as true
today as it was 2000 years ago is that major cities
need and benefit from the enhanced connectivity
good transportation links bring.
In those days all roads pretty much did lead to
Rome. Today, it is aviation that links worlds major
urban centres and in particular the aviation
mega-cities who benefit from the connectivity
aviation delivers. It is these benefits that also make
aviation resilient to the perturbations our industry
sometimes faces.
We hope that you find the 2016 Global

Market Forecast informative and useful.
We seek to improve our analyses continually,
and your questions, challenges and suggestions
help us advance towards that goal.
Dont forget you can download our App
in several formats from tablet to smartphone.
It complements the forecast and includes
our thoughts in an interactive format.
004 Mapping Demand
Executive Demand Network Demand for

summary for air travel & traffic passenger
007 015 forecast aircraft
023 033
Demand Freighter Services Methodology &

by region forecast forecast summary data
043 099 107 115
045 Asia-Pacific
053 Europe
061 North America
067 Middle East
075 L atin America
& Caribbean
083 Commonwealth
of Independent States
091 Africa
Mapping Demand 005
Executive
summary
Mapping Demand 007
Mapping Demand 009
Strong and resilient passenger traffic growth

Air traffic (RPK) doubles every 15 years
s air transport develops, new drivers become
A
more significant
D
emand for 33,070 new aircraft by 2035:
~32,430 passenger aircraft and 650 freighters
4
0% of passenger aircraft demand needed for
replacement, and 60% for growth
S
ingle-aisle represent 71% of units, and wide-
bodies represent 54% of value
LA demand largely concentrated on Aviation
V
Mega-Cities and network efficiencies will
facilitate new VLA destinations
010 Mapping Demand
Passenger fleet Freighter fleet

2015 2015
18,020 1,560
2035 2035 Demand for
37,710 2,110
33,070
New pax & Freight
19,690 550 aircraft
2016-2035
Passenger Passenger Traffic
traffic growth deliveries & pax fleet
next 20 years (> 100 seats)
4.5% CAGR 2016 - 2035
32,425
Freight traffic
growth New freighters
4.0% CAGR 2016 - 2035
645
Passenger & Value of Demand
New freighter
deliveries
2016 - 2035
$5.2 trillion
New pax & Freight
33,070 aircraft
Mapping Demand 011
AIR TRAVEL HAS PROVED TO BE RESILIENT TO EXTERNAL SHOCKS

Source: ICAO, Airbus GMF 2016
RPK = Revenue Passenger Kilometer
World annual traffic (trillion RPK)

Oil Oil Gulf Asian WTC Financial
Crisis Crisis Crisis Crisis Attack SARS Crisis
7.0
~0.4
6.0 trillion
RPK
5.0
4.0 x2
3.0
2.0 ~0.4
trillion
RPK
1.0
0,0
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
DEMAND FOR SOME 33,000 NEW PASSENGER AND FREIGHTER AIRCRAFT

Source: Airbus GMF 2016
Note: Passenger aircraft 100 seats, Freighter aircraft 10 tonnes
Fleet in service evolution: 2016-2035

40,000 39,820
35,000
30,000 20,240 Growth

25,000 33,070
19,580 New
20,000 aircraft
15,000
12,830 Replacement
10,000
5,000
6,750 Stay in service
0
Beginning 2016 2035
012 Mapping Demand
New Deliveries
33,070
GMF
2016-2035
20-year new deliveries of passenger and freighter aircraft

25,000
23,530
20,000
15,000
10,000
8,060
5,000
1,480
0
Single-aisle Twin-aisle Very Large Aircraft
% units 71% 24% 5%
% value 46% 43% 11%
SINGLE-AISLE: 71% OF UNIT; WIDE-BODIES: 54% OF VALUE

Passenger aircraft ( 100 seats) and jet freight aircraft (10 tonnes)
Mapping Demand 013
2016 2026 2016 SHARE OF 2016-2035

2025 2035 2035 NEW DELIVERIES
AFRICA 447 544 991 3%
ASIA-PACIFIC 5,157 8,082 13,239 40%
CIS 448 753 1,201 3%
EUROPE 3,108 3,400 6,508 20%
LATIN AMERICA 1,319 1,226 2,545 8%
MIDDLE EAST 1,170 1,195 2,365 7%
NORTH AMERICA 2,381 3,198 5,579 17%
FREIGHTERS 364 282 646 2%
WORLD 14,394 18,680 33,074 100%
NEW AIRCRAFT DEMAND

PASSENGER AND FREIGHTERS
32,428 New 646

Deliveries
33,074
Passenger Freighter
Fleet Converted Fleet
1,234
Remarketed
& stay
in service
5,280 Retired
11,505 1,329
12,834
DEMAND FOR MORE THAN 33,000 NEW AICRAFT

Passenger aircraft ( 100 seats) and jet freight aircraft (10 tonnes)
Demand for
air travel
Mapping Demand 015
016 Mapping Demand
DRIVERS FOR AIR TRANSPORTATION

GO BEYOND GDP
_
Whilst GDP remains significant, with this rate than both the
an important driver variable even replacing wider economy and
for air transport, GDP in our model for other significant
its relationship to the Chinese and Indian sectors such as
aviations growth has domestic markets automotive, financial
evolved over time. This this year. Working services and health
is apparent at a global age population is also care. Last year
level, but is driven by becoming a more was no exception.
activity at a regional significant driver. International tourist
or country level, for arrivals reached
example we have seen
O
ther factors include: nearly 1.14 billion
a strong move away - Urbanisation, which and visitor spending
from GDP in the US helps to drive wealth, more than matched
domestic market in the including private that growth. Visitors
last year where yield consumption. from emerging
has played a more - The Growing economies now
significant role. It is middle classes, represent a 46%
clear that GDP is not particularly in share of these
the only factor that developing international
drives air traffic growth, aviation markets. arrivals (up from
in fact in our traffic - Liberalisation, 38% in 2000),
forecasting, Airbus either through bi- proving the growth
uses as many as 15 lateral agreements, and increased
different explanatory agreements across opportunities for
variables. trading blocks travel by the people
e.g. ASEAN. in these new
From the the word - Immigration markets. The World
cloud in this chapter procedure Tourism Organisation
you can see many simplification, forecasts that global
of these different extension of visa tourism arrivals will
variables, with their waver programmes, reach 1.6 billion
size representing visa simplification, by 2020.
the number of times for example recent - Airline business
they have been used agreements between models, with greater
across the more China and the US liberalisation and
than 100 traffic flows and Australia. tourism, opportunity
modelled in the Airbus - Tourism, according for airlines will grow,
traffic forecast. to the WTTC (World including for the Low
Travel & Tourism Cost Airlines, offering
Private Council). Recent
consumption, a low fare service
years have seen quickly when new
component of GDP, Travel & Tourism
is becoming more opportunities present
growing at a faster themselves.
Mapping Demand 017
2015 results
Real GDP
2.5%
Air traffic
6.8%
THE RELATIONSHIP BETWEEN PASSENGER TRAFFIC
AND GDP EVOLVES OVER TIME
Source: ICAO, IHS Economics, Airbus
Air traffic growth to real GDP economic growth ratio

Real GDP
Growth (%) Air traffic (RPKs)
14
12
10
8
6
70s: 3.1%
4
10s: 2.2%
2 80s: 1.9%
0 90s: 1.8% 00s: 1.4%
-2
-4
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
PASSENGER TRAFFIC AND ECONOMIC GROWTH APPEAR

LESS CORRELATED IN SOME MARKETS
Source: IHS Economics, US Bureau of Transportation Statistics, Airbus
Real GDP (right axis)

Domestic traffic and real GDP growth in the USA (%) RPKs* (left axis)
10 5
year-on-year growth rate, quarterly
5 3
0 1
Forecast
-5 -1
-10 -3
-15 -5
2008-Q1 2009-Q1 2010-Q1 2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 2017-Q1
*Revenue Passenger Kilometers
018 Mapping Demand
TRAFFIC VARIABLE WORD CLOUD
GDP Working Age

Population
PRIVATE
Crude Oil Price
Labor Force
CONSUMPTION Unemployment
IMPORTS
Domestic Investment
EXPORTS
Disposable personal income
TOTAL POPULATION
Government Consumption Urban Population
Industrial Production Index Fixed Investment
EMPLOYMENT
Nominal Change in Inventory
AIRLINE BUSINESS MODELS

& STRATEGIES
FUEL PRICE
AIR FARES
BILATERAL AGREEMENTS
LIBERALISATION
TOURISM TRENDS
Mapping Demand 019
MORE THAN TWO THIRDS OF THE WORLDS POPULATION WILL BE URBAN IN 2050
Source: UN Population Division, Airbus
Rural
World population and share Urban

of urban agglomeration evolution (billion) Urban share
%
10 80
History Forecast
70
8
60
50
6
40
4
30
20
2
10
0 0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
020 Mapping Demand
MIDDLE CLASS* TO ALMOST DOUBLE OVER THE NEXT 20 YEARS

*Households with yearly income between $20,000 and $150,000 at PPP in constant 2015 prices
Sources: Oxford Economics, Airbus
Middle Class*
(millions of people)
5,000 4,830
History Forecast
4,000
3,776
3,000 3,528
2,792
2,602
2,000 1,867 1,738
911
1,000 310 441
130 206
826 848 864 861

0
2005 2015 2025 2035
World population
6,530 7,350 8,150 8,850
% of world population
29% 38% 46% 55%
Other countries Emerging countries Mature countries

Mapping Demand 021
INTERNATIONAL TOURIST ARRIVALS EXPECTED TO REACH

1.6 BILLION PEOPLE BY 2020
Source: World Tourism Organisation, Airbus
billion tourists
arrivals expected
by 2020
International tourist arrivals (million)

1,800
History Forecast
1,600
1,400
47%
1,200
1,000
800
600
400
200
0
1995 2000 2005 2010 2015 2020
Network
& traffic
forecast
Mapping Demand 023
024 Mapping Demand
PASSENGER TRAFFIC
TO CONTINUE TO GROW
_
Air traffic experienced T
his resilience can
its highest growth also be seen through
over the last five our long-term traffic
years in 2015, with forecast models,
a 6.8% increase in where we see some
Revenue Passengers positive evolution in
Kilometres (RPKs) traffic drivers,
as compared to 2014, as explained previously.
according to ICAO
figures, which were F
or the next 20 years,
preliminary at the the Airbus GMF
time of writing. forecasts a 4.5%
global annual air
This represents an traffic growth.
impressive 3.5 billion In our forecast the
passengers carried first decade will enjoy
by air in 2015. a 5.0% increase
per year, with 4.1%
Air passengers have average annual growth
benefited from lower for the last decade, a
oil prices recently, lower figure but growth
with airlines able to
choose between
in those years based, Air transport is
on absolute traffic
stimulating the market numbers, higher than
a growth market
through today.
lower yields and Almost
60%
therefore ticket O
ur GMF 2000
prices and increasing forecast continues to
margins. track the long term
trend, and our latest growth over
Air traffic continues forecast, despite
to prove its the last ten years
significant market
resilience to slow perturbations in the
economic growth years following its Almost double
by outperforming production.
global GDP, since 2001
demonstrating the
worlds appreciation
of the benefits aviation GMF long
brings. term validity
GMF 2000
long term forecast
is still in line with
our latest forecast
Mapping Demand 025
AIR TRAVEL HAS PROVED TO BE RESILIENT TO EXTERNAL SHOCKS

World annual traffic (trillion RPK)

Oil Oil Gulf Asian WTC Financial
Crisis Crisis Crisis Crisis Attack SARS Crisis
7
5
+59%
4
+98%
3
0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
AIRBUS GMF PREDICTING LONG TERM DEMAND

History
GMF 2000 forecast
World annual traffic (RPKs - trillions) GMF 2016: 4.5% growth p. a.
18
16
14
12
10
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
026 Mapping Demand
ASIAN TRAFFIC SET TO GROW STRONGLY

Billion RPK (legs)
2015
2035
North America
3.4%
Latin America
4.4%
Mapping Demand 027
TRAFFIC FORECAST
_
Asia-Pacific will Domestic China The three major
lead world traffic by will become the flows connecting
2035, with a three fold largest traffic flow Western Europe
increase in the traffic before the end of are all expected to
serving this region by the forecast period, develop: Western-
the end of the forecast supplanting Domestic Europe USA,
period. USA. By the end of Intra-Western Europe
our forecast period, and Western-Europe
Traffic between Domestic Chinese Middle East forecast
emerging countries traffic is forecast to to grow 1.7, 1.7 and
is forecast to grow almost quadruple. 2.6 times respectively.
at 6.3% per annum, Domestic USA traffic
and will represent a will increase by 50% Amongst the
growing share of air from its already high Top 20 traffic flows,
traffic, from 28% of base. 50% will involve
world traffic in 2015 Asia-Pacific and
up to 39% by 2035. 25% will involve
the Middle East.
4.5%
CIS
Europe
3.4%
6.2%
Middle East
Africa Asia-Pacific
5.4% 5.5%
028 Mapping Demand
TRAFFIC BETWEEN EMERGING MARKETS TO REPRESENT

A HIGHER SHARE OF WORLD TRAFFIC
(%)
100
90 CAGR
80 42% Advanced-Advanced 28%

70
60
CAGR
50
30% Advanced-Emerging 33%
40
30
20 CAGR
28% Emerging-Emerging 39%
10
0
2015 2035
TOP 20 FASTEST GROWING

FLOWS OVER THE NEXT 20 YEARS
North Africa - PRC x6.2
Middle East - South America x5.9
Sub Sahara Africa - PRC x5.8
Domestic India x5.6
Indian sub-continent - PRC x4.9
Middle East - USA x4.7
Canada - Middle East x4.7
Asia emerging - Indian sub-continent x4.1
Sub Sahara Africa - Middle East x4.0
Middle East - South Africa x3.9
Middle East- Russia x3.8
Asia emerging - PRC x3.8
Indian sub-continent - Japan x3.7
Asia advanced - Indian sub-continent x3.7
Domestic PRC
Middle East - PRC x3.7
PRC - South Africa x3.7
PRC - Russia x3.6
CIS - PRC x3.6
Intra Sub Sahara Africa x3.6
0 500
Mapping Demand 029
DOMESTIC CHINESE TRAFFIC

FLOW TO BE NUMBER ONE
Top 20 traffic flows in 2035
Domestic PRC x3.7

Domestic USA x1.5
Western Europe - USA x1.7
Intra Western Europe x1.7
Western Europe - Middle East x2.6
Domestic Asia emerging x3.5
Middle East - USA x4.7
Indian sub-continent - Middle East x3.4
Domestic India x5.6
PRC - USA x3.5
Asia emerging - Middle East x3.4
Asia emerging - PRC x3.8
Western Europe - PRC x2.3
Western Europe - South America x2.1
Central Europe - Western Europe x2.6
Domestic Brazil x2.6
South America - USA x2.4
Asia advanced - Asia emerging x2.5
Asia advanced - PRC x3.0
Intra Middle East x3.1
0 500 1,000 1,500 2,000
Billions RPK (legs)
2015 2035
x3.7
2015
2035
1,000 1,500 2,000
Billions RPK (legs)
030 Mapping Demand
TOP 20 PASSENGER FLOWS IN 2035 (ORIGIN-DESTINATION)

Source: annualised Sept. 2015 data from Sabre
2015
2035
Domestic PRC
Intra Western Europe x1.7

Domestic USA x1.5
Domestic Asia emerging x3.5
Domestic India x5.7
Domestic Brazil x2.6
Central Europe - Western Europe x2.6
Domestic Europe x1.4
Asia advanced - PRC x3.4
Domestic Asia advanced x1.3
Domestic South America x2.7
Domestic Turkey x3.3
Western Europe - Middle East x2.4
Asia advanced - Asia emerging x2.5
Domestic Australia/New Zealand x1.8
Indian sub-continent - Middle East x3.1
Domestic Russia x2.1
Intra Middle East x3.1
Western Europe - USA x1.7
Intra Asia advanced x2.2
0 200 400 600
Mapping Demand 031
ORIGIN-DESTINATION PASSENGER
FORECAST FIGURES
_
Taking Origin and destination passengers (O&D pax) gives a better feel
for the future volume of passengers by flow.
In terms of Origin and Destination passengers, some remarkable evolutions
can be highlighted from our forecast.
1.5 billion passengers are expected to travel within China in 2035,
almost four times the number of passengers that travelled by air in 2015.
The number of passengers in Domestic India is expected to multiply by
almost six in the next 20 years, and to reach at that time the same level
as Domestic China today.
x3.7
800 1,000 1,200 1,400 1,600 1,800
Million Pax
Demand for
passenger
aircraft
Mapping Demand 033
034 Mapping Demand
MORE AIRCRAFT, MORE PRODUCTIVITY,

MORE SEATS
_
The trends in passenger traffic, network and infrastructure developments,
airline requirements and technology will all help define the demand and class
of aircraft to be delivered in the coming years.
At Airbus we have long seen a trend towards larger aircraft, both in single-aisle
and wide-body sectors. Taking the A320 family as an example, increases in
economics and range of the latest versions of the A321 have made it a clear
best seller with its family share of deliveries up four fold in the last ten years.
The trend to larger aircraft is also seen at the worlds major airports where
the average number of passengers per departure continues to rise.
This is perhaps not a surprise since most of these airports are capacity
constrained at peak times both in the air and on the ground.
In translating a traffic growth forecast (Revenue Passenger Kilometres, RPKs)
into an aircraft demand forecast the productivity of aircraft is as important
as understanding trends in aircraft size. Two factors are key drivers of this
productivity; load factor, or the proportion of the available seats on each flight
that are filled, and utilisation, the number of hours a day that the aircraft flies
and generates revenue. In recent years both of these parameters have risen
to levels which would have been considered impossible 20 years ago.
Typical load factors for a well-run airline in the 1990s were in the mid 70%
range. However, developments in airline reservation systems, the advent of
internet booking tools and the desire to minimise seasonality negative effects
means that today many major network carriers report levels above 80% and
with some LCCs even reporting load factors regularly in above 90%.
Utilisation has similarly risen dramatically, for example from our own data
from Airbus single-aisle and twin aisle products, we have seen an increase
in utilisation up 30% relative to 25 years ago.
However, having already reached these very high levels, how much more
can they improve? In our forecast we allow for some small improvements,
but clearly the opportunity to increase load factors is limited, however
as well as more seats, technology on and off the aircraft could provide
scope for improved productivity in the form of aircraft utilisation.
Mapping Demand 035
Every traffic flow, every airline and every route has a different optimum and
they are all evolving differently. One size doesnt fit all even within a single
airline. Over time the picture is even more varied. This is why it is necessary
to offer a family of aircraft to cover the breadth of different ideal aircraft. Over
a 20 year period even LCCs with their single type business model and more
dynamic network management are likely to migrate across model boundaries
as their markets evolve. Our forecast shows that the highest proportion of
demand is focused on airlines with demand across multiple single-aisle size
categories for example.
The top end of the single-aisle and the bottom end of the wide-body sectors
is an area of particular challenge to the forecaster. Looking at aircraft capacity
and range there is a clear cross-over with 13% of single-aisle capacity
operating over 2,000nm and 14% of twin-aisle capacity operating on routes
shorter than this distance. New large single-aisles are most fuel efficient but
larger, commercial proposition. All of this pivots on the cost of fuel, the cost of
maintenance and the passenger demands and preferences perceptually and
at a route level. However, by adopting a demand model methodology with its
neutral seat categories helps us to model some of these dynamics.
Fuel remains the largest single contributor to operating cost even in a low
fuel environment. At $50 per barrel it is still ~17% for an average airline rising
to ~30% at $100 per barrel. Being an average hides the fact that airline
business models that have focussed on minimising costs like the LCCs (Low
Cost Airlines) can have fuel as a significantly higher proportion of their costs.
New, fuel efficient aircraft provide a natural hedge against this most
unpredictable of cost drivers and at the same time provide a better
passenger experience and enhance the Green credentials of the airline.
036 Mapping Demand
THE SINGLE-AISLE MARKET IS ALREADY MOVING

TO BIGGER AIRCRAFT
A320 Family deliveries (% units)
13%
10%
18%
17%
43%
54% 74% 73%
44%
25%
13% 8%
2006 2008 2010 2012
MORE SEATS, MORE SEATS FILLED

Source: OAG, Ascend, Airbus
Offered seats per aircraft

Avg. number of offered seats per aircraft (000)
250
200
150
100
50
0
1980 1985 1990 1995 2000 2005 2010 2015
Mapping Demand 037
Market trend
31%
38%
Clear demand for
larger and more
efficient aircraft
62%
57%
A321
A320
7% 5% A319
2014 2015
Load factors
World passenger load factors (%)
85
80
75
70
+17.9
percentage
points
65
60
55
50
1980 1985 1990 1995 2000 2005 2010 2015
038 Mapping Demand
LESS FUEL BURN, THEREFORE LESS EMISSIONS

Source: ICAO, IATA, Airbus
Fuel consumption
Kilograms per passenger per trip (avg)
120
100
-34%
80
60
40
20
0
2000 2003 2006 2009 2012 2015
SIGNIFICANT OVERLAP TODAY BETWEEN SA & WB MARKETS

Source: OAG (Sept.2015), Airbus
Share of global seats offered* (%)

*Aircraft > 100 seats
100
90 Wide-Bodies operates 14%

of seats below 2,000nm
80
70
60
50
Single-Aisle
40
30
20
10 Single-Aisle operates 13%

of seats over 2,000nm
0
400 800 1200 1600 2000 2400 2800 3200
Mapping Demand 039
emissions
Kilograms per passenger per trip (avg)
350
300 -34%
250
200
150
100
50
0
2000 2003 2006 2009 2012 2015
Wide-Body
A Mixed Market
SA 13% > 2,000nm

WB 14% < 2,000nm
4000 4400 4800 5200 5600 6000

Sector Length (nm)
040 Mapping Demand
NORTH AMERICA
1% 85%
14%
5,579 (17%)
LATIN AMERICA
& CARIBBEAN
VLA 1% 80%
19%
TA
SA
2,545 (8%)
DEMAND FOR PASSENGER

AIRCRAFT SUMMARY (EXCL. FREIGHTERS)
NEW PASSENGER A/C DELIVERIES BY NEUTRAL SEATING CATEGORY

20-year new deliveries

Typically Single-aisle Typically Twin-aisle VLA
9,000
8,304
8,000
7,000 6,864
6,000
5,000
4,161
4,000
3,000 2,899 2,687
2,368
2,000 1,512
1,303 1,066 1,264
1,000
0
100 125 150 175 210 250 300 350 400 450+
US$ US$ US$
2.4 trillion 2.2 trillion 0.5 trillion
Neutral seating categories
Mapping Demand 041
CIS
EUROPE 2% 84%
14%
2% 77%
21%
1,201 (4%)
6,508 (20%) ASIA-PACIFIC
MIDDLE EAST
40% 5% 68%
18% 27%
42%
AFRICA
1% 76% 13,239 (41%)
2,365 (7%)
23%
New deliveries
991 (3%)
32,428 aircraft
4%
23%
73%
DEMAND FOR SOME 32,430 NEW PASSENGER AIRCRAFT
Note: Passenger aircraft 100 seats
Fleet in service evolution: 2016-2035

40,000
37,708 Market value
35,000
US$ 5.0 trillion
30,000
3.8% 19,689 Growth 10%
25,000 growth p.a.
32,428
20,000 new
18,019 aircraft 43%
47%
15,000
12,739 Replacement
10,000
18,019
5,000
5,280 Stay in service
0
Beginning 2016 2035
Demand
by region
Mapping Demand 043
Mapping Demand 045
Asia-Pacific
30% WORLDS SURFACE, 60% WORLDS POPULATION,
40% OF AIRCRAFT DEMAND
Despite occasional people over the accessibility of aviation

concerns at a country next 20 years, also in the region have
level, Asia-Pacific will contributing to air opportunity to grow
continue to lead world traffic growth. inter-regionally. Some
economic growth 25% of Asian inter-
according to forecast, C
hinese middle region seats are flown
with an average real class households by these airlines, in
GDP growth of 4.1% already exceed Europe it is over 40%.
per year over the next the number in the China and Japan in
20 years as forecast US, and will be more particular have a lower
by IHS Economics. than double by 2024 share than other Asian
according to Oxford countries like Malaysia
Domestic sources of Economics. and the Philippines.
growth-particularly
private consumption- D eregulation will W
ith its growing
will play a larger role in continue to play a middle classes,
coming years. role in driving growth population likely to
in the region. The exceed Chinas in
In China for example, number of routes the next decade, and
private consumption between China and economic growth
will grow to ASEAN states has already above China,
contribute just over more than doubled India has all the drivers
40% of Chinas total since 2009 for in place for continued
GDP. example. growth in air traffic and
With the middle L
ow cost carriers to play a greater role
classes in the region whilst present in the regions aviation
expected to double and playing a role development.
to over 2.5 billion in increasing the
Real GDP growth

is forecast to grow
%
per year between
2015-2035 period
046 Mapping Demand
PRIVATE CONSUMPTION WILL DRIVE CHINESE ECONOMIC GROWTH

Source: IHS Economics, Airbus
China real GDP (in trillion)

18
History
16
14
Private consumption share
12
10
0
2004 2006 2008 2010 2012 201
Mapping Demand 047
Share of private consumption in GDP (%)

45
Forecast
40
35
30
25
Real GDP
20
15
10
0
14 2016 2018 2020 2022 2024
048 Mapping Demand
SIGNIFICANT IMPACT OF THE CHINA-ASEAN AIR TRANSPORT AGREEMENT

ON THE NUMBER OF SERVICES
LCC: AirAsia, Cebu Pacific, Citilink, Jetstar, PAL Express, Scoot, Spring Airlines, TigerAir
Source: OAG (September data), Airbus
2009
78 Airport-pairs
LCC market
share (ASK): 18%
2014
156 airport-pairs
LCC market
share (ASK): 29%
Number of
airport-pairs
2009-2014
Between China
and ASEAN
Mapping Demand 049
POTENTIAL FOR DEVELOPMENT OF LOW COST CARRIERS

IN ASIA-PACIFIC AND CHINA
LCC definition from Airbus GMF
Source: OAG (September data), Airbus
2015 share of LCCs in domestic and intra-regional traffic (seats offered), from/to region/country
Africa 5%
Middle East 23%
Asia-Pacific 25%
North America 31%
Latin America 35%
Europe & CIS 42%
0 10 20 30 40 50
(%)
60
50
40
30
20
10
0
ina
an
re
sia
es
sia
e
on
pa
an
na
po
pin
or
iw
lay
Ch
-K
ail
Ja
on
hK
t
ga
Ta
Vie
ilip
Ma
ng
Th
Ind
Sin
ut
Ph
Ho
So
China Japan Advanced Asia Emerging Asia

050 Mapping Demand
North
America Europe
4.4% 3.3%
Services Africa
demand forecast
7.8%
MRO VALUE
$646bn Latin
America
NEW PILOTS
232,000
6.1%
NEW TECHS
217,700
Results
Fleet in service evolution
Real Trade Real GDP Fleet size*
4.3% 4.1%
Intra-regional 14,685
& domestic
6.0% Total Growth
Inter-regional traffic 9,026
4.8% 5.5% New
deliveries 13,239
20 year
Fleet in service new
deliveries 5,659
2015 2035 Replacement
5,659 14,685 13,239 4,213
Stay in service &

* Passenger aircraft 100 seats Remarketed 1,446
** 2015-2035 CAGR
Beginning 2035
2016
Mapping Demand 051
CIS
5.6%
Asia-
Pacific
6.0%
Middle
East
6.1%
Domestic
and
Intra-Regional
New deliveries by segment Total RPK

Number of new aircraft
traffic growth
9,074
Asia-Pacific
World
6.1%
5.0%
5.5%
2,289 1,271 4.1%
4.9%
4.5%
605
Single- Small Intermediate Very 2015-2025 2025-2035 2015-2035

Aisle Twin-Aisle Twin-Aisle Large
052 Mapping Demand
Mapping Demand 053
Europe
ECONOMIC HEADWINDS NOT ENOUGH
TO BLOW AVIATION OF COURSE
In the near term, In fact, the ratio of air To meet this demand
economic growth has traffic growth to GDP LCCs have added
been edging upwards in Europe is typically seats faster than
in Europe, supported higher than the world flights, meaning that
by easing credit average. the aircraft they are
conditions, using are getting
a competitive euro, O rigin and destination bigger either through
lower oil prices, traffic to/from/within larger equipment or
and reduced fiscal Europe has grown by adding more seats
headwinds. 59% since 2005, to existing cabins.
hardly missing a step A trend we expect
Whilst long term during the financial to continue especially
challenges remain, real crisis in 2008/2009. as the routes they
GDP growth is forecast are expected to
to grow ~1.8% per Consumer
confidence, European operate range
year between 2015- further afield.
2035 period, largely enlargement, and the
reflecting changing growth in low cost
demographics. carriers all helped
simulate these
Despite hesitant developments.
economic growth
in the region as a T oday, low cost Real GDP growth
carriers (LCCs)
whole, and localised
represent ~40% of
is forecast to grow
1.8%
fiscal and economic
challenges within a the Available Seat
number of European Kilometers flown
countries, air transport between European per year between
has continued to grow countries or 2015-2035 period
impressively. domestically.
054 Mapping Demand
RATIO TRAFFIC TO GDP GROWTH IN EUROPE

IS ALMOST ALWAYS ABOVE WORLD AVERAGE
Source: OAG (September data of each year), IHS Economics, Airbus
World
Traffic to GDP growth ratio Europe
10
-2
-4
-6
-8
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mapping Demand 055
INTRA-REGIONAL TRAFFIC IN EUROPE HAS INCREASED

BY 47% IN THE LAST TEN YEARS
Source: Sabre GDD, Airbus GMF
Total Origin- Intra-Western Europe
Destination Eastern Europe

Traffic from/to/
within Europe Asia-Pacific
2005-2015 CIS
59% Middle East
Africa
North America
Million Origin-Destination passengers
to/from/within Western Europe Latin America
900
800
700
600
500
400
300
200
100
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
056 Mapping Demand
Market share
of LCCs
41%
in Europe and CIS
EUROPE IS THE MOST DEVELOPED MARKET FOR LOW-COST CARRIERS (LCC)

Source: September traffic from OAG, Airbus
Share of LCCs in domestic and intra-regional ASK traffic, by region (in 2015)
Europe & CIS 41%
Latin America 32%
North America 31%
Middle East 23%
Asia-Pacific 20%
Africa 4%
(%)
0 10 20 30 40 50
Mapping Demand 057
LOW-COST CARRIERS HAVE GROWN 40% FASTER IN CAPACITY THAN FREQUENCY

Source: OAG (Sept. data), Airbus
LCCs number of seats and flights - Within Europe (base 100 in 2000) Seats
Flight
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2000 2003 2006 2009 2012 2015
058 Mapping Demand
North
America Europe
2.8% 3.0%
Services Africa
demand forecast
3.8%
MRO VALUE
$382bn Latin
America
NEW PILOTS
111,600
3.4%
NEW TECHS
107,000
Results
3.0% 1.8% 7,791
Intra-regional
& domestic Growth
3,563 New
3.0% Total deliveries
Inter-regional traffic
3.6% 3.4% 4,228
6,508
20 year Replacement
deliveries 2,945
2015 2035
4,228 7,791 6,508
Stay in service &
Remarketed 1,283
* Passenger aircraft 100 seats
** 2015-2035 CAGR
Beginning 2035
2016
Mapping Demand 059
CIS
4.3%
Asia-
Pacific
Middle
East 3.3%
5.0%
Domestic
and
Intra-Regional

traffic growth
4,993
Europe
World
5.0%
4.5%
987 3.9% 4.1%
3.4%
376 2.9%
152

060 Mapping Demand
Mapping Demand 061
North America
MARKETS: MASSIVE DOMESTIC, GROWING INTERNATIONAL
Real GDP growth invest in the in-flight average growth on

in North America is experience, resulting flows with the emerging
expected to grow at in higher passenger economies.
an average of 2.3% satisfaction according to
per year to 2035, with the American Customer Tourism is another
greater business fixed Satisfaction Indexs North American driver,
investment and 2035 (ACSI) Travel Report with inbound tourism
R&D spending offsetting 2016. outpacing outbound.
the slowdown in labor
By 2025, the direct
force growth. Disciplined capacity
growth on both contribution of travel
Airlines in North domestic and and tourism to US GDP
America had another international markets. is expected to be close
successful year in 2015. For example, in 2015 to US$700bn according
They made about 60% load factors in these to the World Travel
of the whole industries markets were at 85% & Tourism Council
net profit. 2015s result and 81% respectively. (WTTC).
matched the all time The total contribution
high set in 2014. Capacity increase (direct, indirect and
on the international induced) is expected to
Record profits driven market driven by steady be around US$2 trillion.
by lower fuel costs growth on the mature
are allowing airlines to markets and above
Real GDP growth
2.3%
per year
60%
of Global net
profit in 2015
062 Mapping Demand
WHILST MAINTAINING LOAD FACTORS ABOVE 80% INTERNATIONAL TRAFFIC TO/

FROM NORTH AMERICA HAS INCREASED BY ABOUT A THIRD SINCE 2009
Source: OAG, Airbus
Seats offered (in million)

300
250
200
150
100
50
0
2009 2015
Middle East CIS Europe
Latin America Asia-Pacific Africa
US carriers load In 2014

factors
2002-2015 75
Domestic million inbound vs.
15pp 63
million outbound
International
tourists
5pp
Mapping Demand 063
AVERAGE LOAD FACTORS HAVE IMPROVED OVER THE LAST DECADE

Source: US Bureau of Transportation Statistics, Airbus
US carriers load factor on domestic International Traffic

and international routes, (%)
Domestic Traffic
90
80
70
60
2001 2003 2005 2007 2009 2011 2013 2015
INBOUND TOURISM TO US HAS SURPASSED OUTBOUND

Source: World Tourism Organization, Airbus
Outbound tourism from the US

Inbound tourism in the US
International tourists (in million)
80
70
60
50
40
30
20
10
0
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
064 Mapping Demand
North Europe
America 2.8%
2.1%
Services Africa
demand forecast
4.6%
MRO VALUE
$314bn Latin
America
NEW PILOTS
73,600
4.1%
NEW TECHS
64,400
Results
3.7% 2.3%
6,239
Intra-regional
& domestic Growth
2.1% Total 1,943
4,296 New
deliveries
4.2% 3.4%
5,579
20 year
deliveries Replacement
2015 2035
4,296 6,239 5,579 3,636
Stay in service &

Remarketed 660
** 2015-2035 CAGR
Beginning 2035
2016
Mapping Demand 065
CIS
4.9%
Asia-
Pacific
Middle
East 4.4%
8.1%
Domestic
and
Intra-Regional

traffic growth
4,725
North America
World
5.0%
4.5%
652 3.7% 4.1%
3.4%
174 3.1%
28

066 Mapping Demand
Mapping Demand 067
Middle East
REALISING ITS POTENTIAL
Middle East economic T oday, just three of T his improved outlook

outlook remains the Middle Eastern is shared for aviation
supported by its airlines account for with Irans propensity
substantial petroleum ~30% of Europe to fly also below its
resources, its proximity to Asia origin and potential today.
to energy intensive destination traffic.
Asian economies, This compares to C
ombine this with
a growing tourism Asian and European a large and growing
potential, and its often airlines where fifteen population, which
sited strategically airlines in each region is estimated will be
important geopolitical also command 90 million people
location. The Middle about 30%. by the end of our
East regions real GDP forecast period, Iran
growth is forecast to A
s positive political will definitely be well
average 3.6% per moves have placed on the aviation
year over the next developed over recent map in the future.
20 years. years, so to has the
economists view S imply fly in and out
In the short to medium of Irans economic of the regions airports
term, GDP and growth outlook, which has today and witness
in private consumption shown annual GDP the wealth of airport
put the region well growth potential grow development from the
above the world nearly a percentage UAE to Oman, from
average on these point to 4.0% in the Jeddah to Bahrain
metrics and close space of a year. to get a glimpse of
to Asia Pacific. the future.
The Middle East

regions real GDP
growth is forecast
to average
3.6%
per year over the
next 20 years
068 Mapping Demand
Big 3 Top 15 Top 15

Gulf European Asia-Pacific
airlines airlines airlines
30%
for 3 airlines
30%
for 15 airlines
30%
for 15 airlines
MIDDLE EASTS ECONOMY EXPECTED TO PERFORM BETTER

THAN THE WORLD AVERAGE
Bubble diameter proportional to real GDP in 2020
Evolution of real GDP and real private consumption (2015-2020)

(%) Real GDP (CAGR 2015-2020)
6
Europe
2
Latin America
CIS
1
00 1 2
Mapping Demand 069
THE BIG 3 GULF AIRLINES ARE LEADING THE ASIA/PACIFIC EUROPE MARKET
Source: Sabre GDD (2016/01), Airbus
Origin-destination passenger traffic between Europe and Asia-Pacific, in 2016/01 (million)
2.0
1.5
1.0
0.5
0.0
Big 3 Gulf Airlines Top 15 Top 15 Other
European airlines Asia-Pacific airlines
Asia-Pacific
Middle East
Africa
World
Average
North
America
(%)
3 4 5
Real private consumption (CAGR 2015-2020)

070 Mapping Demand
LONG-TERM ECONOMIC FORECASTS HAVE BEEN REVISED UPWARDS FOR IRAN

Apr-16
Apr-15
Apr-14
Iran real GDP (Billion 2010 $US)

1200
History Forecast
1000
800
Apr. 2016 forecast
2015-2035 CAGR:
4.1%
600
Apr. 2014 forecast

2015-2035 CAGR:
3.1%
400
200
0
199519971999200120032005200720092011201320152017201920212023202520272029203120332035
Mapping Demand 071
PROPENSITY TO TRAVEL IN IRAN IS BELOW ITS POTENTIAL

Source: Sabre, IHS Economics, Airbus GMF 2015
2014 trips per capita

100.00
10.00
1.00
Iran in 2014: 0.27 trips per capita

(including charter and non-reported traffic)
0.01
0.10
0.00
0 10 20 30 40 50 60 70 80 90 100
2014 real GDP per capita

(2010 $US thousands at Purchasing Power Parity)
072 Mapping Demand
North
America Europe
8.1% 5.0%
Services Africa
demand forecast
6.7%
MRO VALUE
$184bn Latin
America
NEW PILOTS
48,100
9.3%
NEW TECHS
53,400
Results
4.0% 3.6%
2,986
Intra-regional
& domestic
5.5% Total
Growth
1,896 New
6.2% 6.2%
deliveries
Fleet in service
20 year 1,090
2,365
new
2015 2035
1,090 2,986 2,365 469
Stay in service &

Remarketed 621
** 2015-2035 CAGR
Beginning 2035
2016
Mapping Demand 073
CIS
5.8%
Asia-
Middle Pacific
East 6.1%
5.5%
Domestic
and
Intra-Regional

traffic growth
952
Middle East
511 World
478 424 7.8%

6.2%
5.0%
4.6% 4.5%
4.1%

074 Mapping Demand
Mapping Demand 075
Latin America
& Caribbean
LATIN AMERICA - CITIES AND PEOPLE DEFINING DEMAND
Despite economic At 9% of origin

perturbations like and destination
those in Brazil at passengers, intra-
the time of writing, regional traffic is still
and longer term under developed and
challenges like income there is potential for
equality and general continued growth in
infrastructure, the Latin air travel between its
America economic + 40 countries. In fact,
outlook remains intra-regional demand
positive with Real is higher in every
GDP growth forecast other region except
to average +2.9% per North America (two
year over our forecast countries, the US
period. and Canada).
Latin America has the Connecting
second highest level of traffic is growing,
urbanisation, at 80%, especially in Brazil
when compared to where passengers
other regions. connecting through
the country has grown
The regions middle- nearly a third in three
class will more than years.
double to reach half
a billion people by As in other parts of
2035, helping to drive the world, aircraft
aviation growth. are getting bigger in Real GDP growth
2.9%
Latin America. Since
Traffic growth 1994, average seats
remained relatively per aircraft has grown
strong during the nearly 1% per year. per year over our
regions economic forecast period
slowdown.
076 Mapping Demand
LATIN AMERICAN TRAFFIC GROWTH REMAINED

STRONG DESPITE ECONOMIC DOWNTURN
Source: IHS Economics, OAG (Sept. data), Airbus GMF
ASKs (traffic) and GDP (economy) year-on-year growth Latam Traffic
(%) Latam GDP

14
History Forecast
12
10
-2
-4
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
CONNECTING TRAFFIC IN BRAZIL INCREASING FASTER

THAN ORIGIN-DESTINATION TRAFFIC
Connecting passengers counted once
Source: ANAC, Sabre GDD, Airbus
Brazilian airlines international traffic Connecting two

foreign countries in Brazil
(Number of passengers, million)
Origin or destination in Brazil
2.5
2.0
+32%
in 3 years
1.5
1.0 Connecting traffic

+22% represents around
20%
in 3 years
0.5
of Brazilian airlines
international traffic
0.0
2012-Q2 2013-Q2 2014-Q2 2015-Q2
Mapping Demand 077
LATIN AMERICA HAS A STRONG POTENTIAL FOR INTRA-REGIONAL TRAFFIC

Source: UNPD Department of economic and social affairs, IHS Economics,
Airbus Market Research & Forecasts
Number of daily intra-regional flights to/from/within cities >3m people
MTY
cities
GDL SDQ with a population
MEX
>3 million
CCS
EOH in 2014
BOG
FOR
REC
LIM SSA
PLU
700
intra-regional
GIG
CGH flights/day
BFH
SCL POA
EZE
137m
people in 18 cities
cities
with a population
>3 million
in 2014
HAM
BHX
TXL
LHR
STR MUC VIE 6,600
intra-regional
CDG
MXP flights/day
FCO
MAD BCN NAP
ATH 77m
people in 14 cities
078 Mapping Demand
AIRCRAFT IN THE REGION ARE GETTING BIGGER

Source: OAG, Airbus Market Research and Forecasts
Average seats per single-aisle flight *

*Aircraft > 100 seats
160
155
150
145
140
135
130
125
120
1994 1996 1998 2000 2002 2004
Mapping Demand 079
World
Latin America
Latin America
1994-2014 annual
growth on average
single-aisle seats
0.8%
2006 2008 2010 2012 2014

080 Mapping Demand
Europe
North
America 3.4%
4.1%
Services Africa
demand forecast
Latin 4.6%
MRO VALUE America
$126bn 4.9%
NEW PILOTS
44,400
NEW TECHS
42,500
Results
Real Trade Real GDP Fleet size* 2,948
3.2% 2.9%
Intra-regional New
& domestic deliveries
4.9% Total
Growth
1,631
2,545
4.1% 4.4%
1,317
20 year
2015 2035
1,317 2,948 2,545 914
Stay in service &

Remarketed 403
** 2015-2035 CAGR
Beginning 2035
2016
Mapping Demand 081
CIS
6.2%
Asia-
Pacific
Middle
East 6.1%
9.3%
Domestic
and
Intra-Regional

traffic growth
2,027
Latin America
World
5.0%
4.6% 4.5% 4.4%
387 4.1% 4.1%
112
19

082 Mapping Demand
Mapping Demand 083
Commonwealth
of Independent States
TAKING OFF AGAINST THE WIND
The drop in oil prices, in the short-term, beyond their links

economic and financial but the longer-term to Russia, with one
sanctions, and capital economic potential indicator for this
flight have impacted remains. The CIS potential the growing
the Russian economy real GDP growth is share of imports
and the collective forecast to average and exports to
performance of 2.4% per year over other countries
the CIS. the next 20 years. and regions
beyond Russia.
A decrease in Russias W hilst GDP growth
currency value has will help to drive
had a negative effect aviations development
on outbound tourism, in the region, so to
but domestic traffic will a forecast growth
growth remained in wealth. Russian
positive. middle classes are still
expected to develop
Connecting traffic with some 70% of the
operated by Russian population forecast
airlines has grown to be in this grouping
90% in three years, at Purchasing Power
being less dependent Parity by 2035.
on the local economy. Real GDP growth
Today, connecting P
assenger traffic in is forecast
traffic represents the long-term will to average
2.4%
around 15% of grow to the point
international traffic of that trips per capita
the Russian airlines will reach current
and is likely to grow. European levels. per year
over the next
The economic T
he other countries
downturn witnessed in the CIS will also 20 years
today has an impact continue to develop
084 Mapping Demand
DESPITE ECONOMIC DOWNTURN, POSITIVE GROWTH

FOR THE DOMESTIC RUSSIAN MARKET
Source: OAG, Airbus
Domestic traffic in Russia (Scheduled seats offered, million)

70
60
50
40
30
20
10
0
2012 2013 2014 2015
CONNECTING TRAFFIC HELPING DURING DIFFICULT TIMES

Connecting passengers counted once
Source; Sabre GDD, Airbus
Russian airlines international traffic Connecting two foreign

(Number of passengers, million) countries in Russia
Origin or destination in Russia
35
30 +90%
in 3 years
25
20
Connecting traffic
15 represents around
10 15%
of international
5 traffic of
Russian airlines
0
2012 2013 2014 2015
Mapping Demand 085
CIS COUNTRIES FORGING LINKS BEYOND ITS BOUNDARIES

Source: Seabury, Airbus
2004
2% Exports
4% from CIS
6% 10% (to countries
outside of CIS)
share of value
11% in $US
26% 41%
Latin America
PRC
Europe
Russia
Rest of Asia
2014
1% North America
Africa & Middle East

4%
5%
19%
12%
14%
45%
086 Mapping Demand
RUSSIAN MIDDLE CLASS WILL CONTINUE TO DEVELOP

2012 PPP exchange rate with US$: 18.3 rubble per US$
Average household size: 2.6
Source: Oxford Economics, Airbus
Income distribution in Russia
(%)
100
90
80
70
60
50
40
30
20
10
2 5 7 10 20
Mapping Demand 087
2034
2024
2014
Share of
Usual definition of middle class households earning
more than each
income threshold
35 70 100 150
Real 2012 $US PPP, annual per household
088 Mapping Demand
North
America Europe
4.9% 4.3%
Services Africa
demand forecast
3.9%
MRO VALUE
$103bn Latin
America
NEW PILOTS
30,800
6.2%
NEW TECHS
33,500
Results
2.7% 2.4%
Intra-regional
& domestic
3.9% Total
5.0% 4.5% 1,688
Fleet in service
20 year
new
Growth
864
New
deliveries 1,201
2015 2035
deliveries 824
824 1,688 1,201 Replacement
337
Stay in service &

Remarketed 487
** 2015-2035 CAGR
Beginning 2035
2016
Mapping Demand 089
CIS
3.9%
Asia-
Pacific
Middle
East 5.6%
5.8%
Domestic
and
Intra-Regional

traffic growth
1,003 CIS
World
5.0% 5.0%
114 4.1% 4.1%
4.5% 4.5%
60
24

Mapping Demand 091
Africa
AVIATION DEMAND ACROSS THE MAP
Beyond developments of the largest in terms themselves would lead

in global commodity of their populations, to more traffic, more
markets, which can also the highest in jobs, an estimated
fluctuate depending terms of aircraft to 155 thousand jobs in
on demand from large population size ratio. aviation, tourism, and
economies including It also shows how the wider economy,
China, expanding aviation is developing and could contribute
domestic markets, around the compass, US$1.3 billion to
growing middle-class not just north and annual GDP.
populations, and south but increasingly
regional integration west and east.
will help to support
long term economic S ince 2005 inter/
growth. The African intra-regional African
regions real GDP traffic has grown
growth is forecast to dramatically. But many
average 3.6% per year industry stakeholders
over the next 20 years. believe that greater
liberalisation in the
Urbanisation across region remains
Africa is growing possible and in
strongly. In 2015, fact essential for its
there were 56 African countries and people.
cities with more than
a million people. IATA commissioned a
This compares to 58 in study which examined
India and 38 in Europe the potential benefits
for example. By 2025, from the greater
there will be 19 cities liberalisation of air
with over 4 million services for 12 of
people, cities that will the 44 signatories of
increasingly need the the Yamoussoukro
benefits brought by Decision in 1999.
connectivity including Their study showed
wealth and commerce.
Today, countries
that increased
liberalisation would
lead to stimulation
3.6%
real GDP growth
in the region are factors such as lower
growing their aviation fares and greater per year
inventories, with some connectivity, which
092 Mapping Demand
THERE WILL BE 22 AFRICAN CITIES WITH OVER 4 MILLION PEOPLE IN 2025

Source: UN Population Division, Airbus Market Research & Forecasts
Most populated African cities in 2025, (population > 4 million)
Current Mega-Cities
Additional in 2025
Casablanca
Alexandria
Cairo
Dakar Khartoum
Bamako Ouagadougou
Kano
Abuja
Ibadan Addis Ababa
Douala
Lagos Yaounde
Abidjan
Nairobi
Kinshasa
Dar es Salaam
Luanda
Antananarivo
Johannesburg
Cape Town
Mapping Demand 093
AFRICAS URBANISATION CATCHING CHINA

Source: UNDP, Airbus Market Research & Forecasts
Share of population by region, 2015 (%) Rural

Urban
100% (million of people)
1,282 1,166 1,401 743 630 361
67.3 59.6 44.4 26.4 20.2 18.4
32.7 40.4 55.6 73.6 79.8 81.6
India Africa China Europe Latin America North America
58 56 106 38 68 51
Number of urban agglomerations >1m people
INTRA-REGIONAL TRAFFIC HAS SURGED IN THE LAST TEN YEARS

Source: OAG, Airbus Market Research & Forecasts
Traffic evolution from/to/within Africa, base 100 in 1980 Intra-regional

Inter-regional
Domestic
800
700
600
500
400
300
200
100
0
1980 1985 1990 1995 2000 2005 2010 2015
094 Mapping Demand
MORE AIRCRAFT PER CAPITA

IN SUB SAHARAN COUNTRIES
Source: Ascend, IHS Economics,
Airbus Market Research & Forecasts
Capita per domiciled aircraft in Sub Saharan countries in 2015
Congo DR
Nigeria
South Africa
Ethiopia
Tanzania
Square size proportional to respective country population size, countries with population > 1.5m people
* All passenger aircraft >100 seats
Mapping Demand 095
Number of people for 1 aircraft*
30m 10m 1m 0.3m
Kenya Sudan Mozambique
Ghana Madagascar Cameroon
Angola Malawi Zimbabwe Chad
Cte DIvoire Rwanda Somalia Togo
Eritrea Congo MR***
Niger South Sudan

CAR** Namibia Gabon
** Central African Republic

*** Mauritania
096 Mapping Demand
Europe
North
America 3.8%
4.6%
Services
demand forecast Africa
MRO VALUE 6.0%
$76bn Latin
America
NEW PILOTS
21,700
4.6%
NEW TECHS
22,200
Results
1,370
4.8% 3.6%
Intra-regional New
& domestic deliveries
6.0% Total
Growth
765
991
5.3% 5.4%
605
20 year Replacement
Fleet in service new 226
deliveries
2015 2035
605 1,370 991
Stay in service &
Remarketed 379
** 2015-2035 CAGR
Beginning 2035
2016
Mapping Demand 097
CIS
3.9%
Asia-
Pacific
Middle
East 7.8%
6.7%
Domestic
and
Intra-Regional

traffic growth
757
Africa
World
5.9%
5.0% 4.9%
5.4%
4.5%
148 4.1%
74
12

Freighter
forecast
Mapping Demand 099
100 Mapping Demand
Even though air cargo has faced some challenging times in recent years,
e.g. yields declining, slow growth, overcapacity, there are however potential
niche growth areas including:
- Express carriers, who have continuously reported positive growth
figures (with the exception of 2009).
- E-commerce represents a strong growth opportunity, particularly
in emerging economies. For example express in China is booming,
and with just 50-70 aircraft flying today, compared with ~400 aircraft
flying for express carriers on domestic operations in the US.
Middle Eastern carriers are successfully replicating their passenger
hub and spoke strategy for the cargo market with the use of various
aircraft types and capabilities (777F, A330F and the use of belly hold
capacity).
Belly capacity is a complementary to dedicated freighters:
- Belly capacity is increasing faster than cargo traffic due to healthy
passenger traffic growth, and the underfloor freight capacity this can yield.
- However, cargo intensive flows and belly capacity availability are not
necessarily in sync e.g. on the trans-Pacific, thus stimulating dedicated
freighter operations.
There has been much discussion on modal shift, i.e. the transition of air
freight to sea freight. Containerised sea freight has been growing faster than
air freight, but looking at the commodity level shows that this growth has
largely been the result of containerised sea freight taking share from bulk
sea freight rather than air freight.
FTKs (billions)
500
History
400
300
200
100
0
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Mapping Demand 101
20 year world
annual FTK
growth
4.0%
Total traffic growth
includes main
deck and belly
capacity
FREIGHT TRAFFIC GROWTH, DOMESTIC + INTERNATIONAL

Growth Rate
2015-2035
Forecast
Advanced
Advanced
2.4%
Emerging
Emerging
5.5%
Advanced
Emerging
4.5% 76%
Emerging
Advanced
4.4%
2019 2021 2023 2025 2027 2029 2031 2033 2035

102 Mapping Demand
WORLD TRADE FORECASTS

(%)
6.0
5.0
4.0
3.0
2.0
1.0
0
2013 2015 2017 2019 2021 2023 2025
WORLDWIDE SHARE OF BELLY VS DEDICATED CARGO TRAFFIC

Dedicated freighters
Estimates FTKs (billion) Belly cargo
500
Cargo traffic
400
growth
4.0% 160bn
FTKs
300
200
93bn
FTKs 62%
100
52%
0
2015 2035
Mapping Demand 103
GMF 2014 trade

CAGR
2015 - 2035
4.3%
GMF 2015 trade
CAGR
2015 - 2035
4.1%
Air trade growth - GMF 2014
GMF 2016 trade
CAGR
2015 - 2035
3.7%
2027 2029 2031 2033 2035
Belly capacity
will capture
market share
Impact is mainly
on long haul flows
Main assumption
being that belly
load factors
remain stable
104 Mapping Demand
FREIGHTER DELIVERIES OVER THE NEXT 20 YEARS

New built
Freighter deliveries over the next 20 years Conversion

1,000
800
306
600
400
570 569 340

200
0 95
Small Mid-size Large
10t < payload < 30t 30t < payload <80t payload > 80t
FUTURE FREIGHTER FLEET DISTRIBUTION WILL REFLECT

THE GROWING INFLUENCE OF EMERGING MARKETS
Source: Airbus GMF 2016, ASCEND
764
647
North America
World fleet
2015
1,564
2035
2,111 56 88
Latin America
The North American fleet is

mainly a replacement market
The Asia-Pacific fleet

is set to triple as a growth market
Mapping Demand 105
Mid-size
freighter drivers
Replacement for
US and Europe
Large growth in
Asia-Pacific
New routes in
Middle East, Latin
America and Africa
392
320
Europe & CIS 778

127
71
Middle East 302
51 79
Asia-Pacific
Africa
2035
2015
Services
forecast
Mapping Demand 107
108 Mapping Demand
GROWING FLEET, A GROWING

DEMAND FOR SERVICES
_
For the first year we have added the Airbus view on the need for MRO
(Maintenance, Repair and Overhaul) activities and forecast for pilot and
technician training over the next 20 years.
The services market is largely driven by evolution in the fleet of aircraft.
At the end of 2015, the fleet of passenger aircraft over 100 seats was
18,000. By 2035 this will more than double to 37,700, with a corresponding
increase in the need for MRO service, pilots and trained technicians.
Today, there is already pressure building to meet these needs,
particularly for pilots.
Over the next 20 years the Maintenance, Repair and Overhaul business
will grow from $53 billion USD to over $132 billion USD per year. This
represents an average yearly growth of 4.6% over the next 20 years. The
total value of MRO activity, excluding upgrade services, over this period is
expected to be $1.8 trillion USD.
Today, there are an estimated 200,000 active pilots in the passenger aircraft
fleet over 100 seats. This is to grow to some 450,000 by 2035.
In order to meet this need and allowing for retirements etc. Airbus forecast
the need for a total 560,000 new pilots that will need to be trained to fly the
worlds fleet of passenger aircraft in 20 years time.
Large numbers of technicians will also be needed to meet the MRO needs of
the growing passenger fleet. In its Services forecast, Airbus estimate a need
to train 540,000 new technicians. They will perform various activities across
airframe, engines, and components for example.
With the growing demand for aviation and its burgeoning airline fleets, Asia
Pacific will represent the biggest market for both MRO activity and the need
for pilots and technicians.
Europe and North America combined will need about a third of the new pilots
and technicians, as well as representing about a third of total MRO value.
Mapping Demand 109
20 YEAR MRO DEMAND

Note: MRO Demand including Line / Airframe
Component / Engine and excluding Upgrades
MRO Demand 100+ pax passenger jets
Billion $US
140
120
100
80
60
40
20
0
2015 2035
MRO Demand 100+ pax passenger jets Latin America

& Caribbean
Asia-Pacific North America CIS
Europe Middle East Africa
Billion $US
140
120
100
80
60
40
20
0
2015 2035
110 Mapping Demand
PASSENGER JET FLEET FORECAST
Fleet evolution by Region
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2015 2020
Mapping Demand 111
Asia-Pacific
Europe
North America
Middle East
Latin America & Caribbean
CIS
Africa
2025 2030 2035

112 Mapping Demand
20 YEAR PILOT / TECHNICIAN DEMAND FORECAST
New pilots
5% 4%
8%
41%
9%
562,300
13%
20%
2016-2035 New pilots / technicians demand
North America
73,601
64,380
562,300
new pilots
needed in the next Latin America
20 years & Caribbean
44,429
540,600
new technicians 42,480
needed in the next
20 years
Mapping Demand 113
New technicians
4%
6%
8% Africa
40% Asia-Pacific
10%
Europe
540,600 North America
Middle East
12%
Latin America & Caribbean
20% CIS
Europe CIS
111,553 30,804
106,935 33,509
Middle East
48,132 Asia-Pacific
53,390 232,082
217,690
Africa
21,655
22,195
Methodology &
summary data
Mapping
Mapping Demand
Demand 115
115
Mapping Demand 117
OUR METHODOLOGY AT A GLANCE

_
FORECASTING - ASKING THE RIGHT QUESTIONS

Our main data sources: OAG, Ascend, ACAS, Sabre, Seabury, IHS Economics,
IHS Economics, Oxford Economics, DoT, Eurocontrol, IATA, ICAO
Historical W
hat are the key drivers and trends?
market analysis H
ow are the fleets operated?
Forecast passenger W
here will passengers and cargo fly?
& cargo traffic H
ow will demand be distributed?
H ow will the networks evolve ?

Forecast carrier How many new routes?
operations How much growth on existing routes?
What is the best module size for each sector?
W hen will the current fleet be replaced?

Forecast fleet
How will other life cycle elements evolve?
requirements
What are the key fleet requirements?
Demand
Analyse future for new aircraft
aircraft market K ey products
differentiators
Demand
Analyse future for services
services market (training, MRO)
K ey market
segments
118 Mapping Demand
NEW DELIVERIES 2016-2035

_
NEW PASSENGER AIRCRAFT

DELIVERIES BY REGION
ASIA- LATIN MIDDLE NORTH

AFRICA CIS EUROPE TOTAL
PACIFIC AMERICA EAST AMERICA
SINGLE-AISLE 757 9,074 1,003 4,993 2,027 952 4,725 23,531
SMALL
148 2,289 114 987 387 478 652 5,055
TWIN-AISLE
INTERMEDIATE
74 1,271 60 376 112 511 174 2,578
TWIN-AISLE
VERY LARGE
12 605 24 152 19 424 28 1,264
AIRCRAFT
TOTAL 991 13,239 1,201 6,508 2,545 2,365 5,579 32,428
NEW FREIGHT AIRCRAFT

DELIVERIES BY REGION

SMALL - - - - - - - -
MID-SIZE 6 77 12 32 22 18 139 306
LARGE 3 142 13 47 - 46 89 340
TOTAL 9 219 25 79 22 64 228 646
Source: Ascend, Airbus

100+ seats (passenger aircraft) and 10t+ (freighters)
Mapping Demand 119
CONVERTED FREIGHT
AIRCRAFT BY REGION

SMALL 43 348 8 71 32 8 61 571
MID-SIZE 22 119 18 112 23 20 255 569
LARGE 3 35 10 13 - 5 29 95
TOTAL 68 502 36 196 55 33 345 1,235
NEW PASSENGER AND FREIGHT

AIRCRAFT DELIVERIES BY REGION

SINGLE-AISLE 757 9,074 1,003 4,993 2,027 952 4,725 23,531
TWIN-AISLE 230 3,689 191 1,412 521 1,024 997 8,064
VERY LARGE
13 695 32 182 19 453 85 1,479
AIRCRAFT
TOTAL 1,000 13,458 1,226 6,587 2,567 2,429 5,807 33,074

120 Mapping Demand
SAFE HARBOUR STATEMENT

Disclaimer
This presentation includes forward- reduction and productivity efforts;
looking statements. Words P
roduct performance risks, as well
such as anticipates, believes, as programme development and
estimates, expects, intends, plans, management risks;
projects, may, forecast and similar C
ustomer, supplier and
expressions are used to identify subcontractor performance or
these forward-looking statements. contract negotiations, including
Examples of forward-looking financing issues;
statements include statements made C
ompetition and consolidation
about strategy, ramp-up and delivery in the aerospace and defence
schedules, introduction of new industry;
products and services and market S
ignificant collective bargaining
expectations, as well as statements labour disputes;
regarding future performance and T
he outcome of political and legal
outlook. By their nature, forward- processes, including the availability
looking statements involve risk and of government financing for certain
uncertainty because they relate to programmes and the size of
future events and circumstances defence and space procurement
and there are many factors that budgets;
could cause actual results and R
esearch and development costs in
developments to differ materially connection with new products;
from those expressed or implied by L
egal, financial and governmental
these forward-looking statements. risks related to international
transactions;
These factors include but are not L
egal and investigatory
limited to: proceedings and other economic,
C hanges in general economic, political and technological risks and
political or market conditions, uncertainties.
including the cyclical nature of
some of Airbus Group businesses; Any forward-looking statement
S ignificant disruptions in air travel contained in this presentation/
(including as a result of terrorist publication speaks as of the date
attacks); of this presentation/publication
C urrency exchange rate release. Airbus Group undertakes no
fluctuations, in particular between obligation to publicly revise or update
the Euro and the U.S. dollar; any forward-looking statements in
T he successful execution of internal light of new information, future events
performance plans, including cost or otherwise.
AIRBUS S.A.S. 31707 Blagnac Cedex, France
AIRBUS S.A.S. 2016 - All rights reserved, Airbus, its
logo and the product names are registered trademarks.
Concept design by Airbus Multi Media Support 20160943.
Photos by Airbus, F. Corticchia, R. Wilson, A. Doumenjou,
Everything I Do, S. Ramadier, A. Trejo, chuyuss, Z. Gabor,
S. Deng, M. Alwerdany, T. Leite, N.Sachkov, M. De Mattei,
Y. Konstantin, P. Pigeyre. Computer rendering by Fixion.
Reference D14029465, issue 3. September, 2016.
Printed in France by Art & Caractre.
Confidential and proprietary document. This document
and all information contained herein is the sole property
of AIRBUS S.A.S. No intellectual property rights are
granted by the delivery of this document or the disclosure
of its content. This document shall not be reproduced
or disclosed to a third party without the express written
consent of AIRBUS S.A.S.
This document and its content shall not be used
for any purpose other than that for which it is supplied.
The statements made herein do not constitute an offer.
They are based on the mentioned assumptions
and are expressed in good faith. Where the supporting
grounds for these statements are not shown, AIRBUS
S.A.S. will be pleased to explain the basis thereof.
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It is produced using pulp that has been whitened without
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Global Market Forecast

Today, in aviation and in the GMF we still use

We hope that you find the 2016 Global

Executive Demand Network Demand for

Demand Freighter Services Methodology &

 Strong and resilient passenger traffic growth

Passenger fleet Freighter fleet

AIR TRAVEL HAS PROVED TO BE RESILIENT TO EXTERNAL SHOCKS

World annual traffic (trillion RPK)

DEMAND FOR SOME 33,000 NEW PASSENGER AND FREIGHTER AIRCRAFT

Fleet in service evolution: 2016-2035

30,000 20,240 Growth

20-year new deliveries of passenger and freighter aircraft

% units 71% 24% 5%

% value 46% 43% 11%

SINGLE-AISLE: 71% OF UNIT; WIDE-BODIES: 54% OF VALUE

2016 2026 2016 SHARE OF 2016-2035

AFRICA 447 544 991 3%

ASIA-PACIFIC 5,157 8,082 13,239 40%

CIS 448 753 1,201 3%

EUROPE 3,108 3,400 6,508 20%

LATIN AMERICA 1,319 1,226 2,545 8%

MIDDLE EAST 1,170 1,195 2,365 7%

NORTH AMERICA 2,381 3,198 5,579 17%

FREIGHTERS 364 282 646 2%

WORLD 14,394 18,680 33,074 100%

NEW AIRCRAFT DEMAND

32,428 New 646

DEMAND FOR MORE THAN 33,000 NEW AICRAFT

DRIVERS FOR AIR TRANSPORTATION

Air traffic growth to real GDP economic growth ratio

PASSENGER TRAFFIC AND ECONOMIC GROWTH APPEAR

Real GDP (right axis)

TRAFFIC VARIABLE WORD CLOUD

GDP Working Age

AIRLINE BUSINESS MODELS

World population and share Urban

MIDDLE CLASS* TO ALMOST DOUBLE OVER THE NEXT 20 YEARS

2,000 1,867 1,738

826 848 864 861

Other countries Emerging countries Mature countries

INTERNATIONAL TOURIST ARRIVALS EXPECTED TO REACH

International tourist arrivals (million)

AIR TRAVEL HAS PROVED TO BE RESILIENT TO EXTERNAL SHOCKS

World annual traffic (trillion RPK)

AIRBUS GMF PREDICTING LONG TERM DEMAND

ASIAN TRAFFIC SET TO GROW STRONGLY

TRAFFIC BETWEEN EMERGING MARKETS TO REPRESENT

80 42% Advanced-Advanced 28%

TOP 20 FASTEST GROWING

DOMESTIC CHINESE TRAFFIC

Top 20 traffic flows in 2035

Domestic PRC x3.7

TOP 20 PASSENGER FLOWS IN 2035 (ORIGIN-DESTINATION)

Intra Western Europe x1.7

800 1,000 1,200 1,400 1,600 1,800

MORE AIRCRAFT, MORE PRODUCTIVITY,

THE SINGLE-AISLE MARKET IS ALREADY MOVING

A320 Family deliveries (% units)

54% 74% 73%

2006 2008 2010 2012

MORE SEATS, MORE SEATS FILLED

Offered seats per aircraft

Strong and resilient passenger traffic growth

NEW AIRCRAFT DEMAND

TRAFFIC BETWEEN EMERGING MARKETS TO REPRESENT

TOP 20 FASTEST GROWING

DOMESTIC CHINESE TRAFFIC

Despite occasional people over the accessibility of aviation

PRIVATE CONSUMPTION WILL DRIVE CHINESE ECONOMIC GROWTH

SIGNIFICANT IMPACT OF THE CHINA-ASEAN AIR TRANSPORT AGREEMENT

POTENTIAL FOR DEVELOPMENT OF LOW COST CARRIERS

RATIO TRAFFIC TO GDP GROWTH IN EUROPE

INTRA-REGIONAL TRAFFIC IN EUROPE HAS INCREASED

Real GDP growth invest in the in-flight average growth on

WHILST MAINTAINING LOAD FACTORS ABOVE 80% INTERNATIONAL TRAFFIC TO/

Middle East economic T oday, just three of T his improved outlook

MIDDLE EASTS ECONOMY EXPECTED TO PERFORM BETTER