The type of forecast that I have chosen to analyze is the Airbus global market forecast for 2019 to 2038. The aim of the forecast is to provide an overview of air transport sector evolution considering factors such as economic growth, demographic growth, oil prices, and establishment of new routes and identification of large aircraft. The forecast gives an insight into the expected performance of Airbus (Airbus.com, 2018).
The forecasts estimate that by 2038 about 39,210 new aircraft will be needed in the world, and this will, in turn, raise the demand for a service business such as pilot training. From the forecast, 640,000 technicians and 550,000 pilots will be needed in the next twenty years. Within the 20-year time, new technologies will be developed so as to increase customer and passenger satisfaction (Airbus, 2019). The other thing the forecast focuses on is enhancing the passenger experience by upgrading the cabins, training cabin crew, and introducing in-flight entertainment (Airbus, 2019).
2. Future market forecast and demand
According to the forecast, the number of commercial aircraft is expected to double within the next 20 years to a total of 48,000 aircraft globally (Airbus, 2019). European aerospace company believes that the air transport will continue increasing despite the challenges such as climate crisis, war, and oil prices because development and urbanization will lead to a rise of about 50% middle class air passengers by 2038 which translates to about 6 billion people (Airbus.com, 2018).
4.3% of the annual growth in the air traffic from the forecast will occur in the Asia-Pacific region, where the demand for new aircraft is expected to be more than that of Europe and North America. The expected number of middle-class people in the Asia Pacific by 2038 is 3.3 billion as compared to the current 2 billion (Airbus.com, 2018). Asia, also just like Europe, have newly opened routes. The newly established manufacturing hubs, also such as Indonesia and Vietnam, have the potential of increasing traffic growth. In domestic traffics, China and India dominate the market with 57% and 11% share, respectively, followed by Japan, Australia, and Indonesia (Airbus, 2019).
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3. Future aircraft growth
The 2019-2038 forecast segments the markets in the way airlines operate in terms of range and size. With this segmentation, it is easier to identify any kind of overlap that develops between market segments (Airbus.com, 2018). The segmentation in the forecast is addressed in three categories which include small which goes up to 3,000nm, a medium which ranges up to 5000nm, and large instead of single-aisle, double aisle, and very large aircraft, for example, A321 is categorized as small while XLR is categorized as medium (Airbus, 2019).
According to the forecast, the segmentation will lead to the demand for 39,210 new passengers and cargo aircraft with more than 100 seats where 29,720 aircraft will be small, 5,370 will be medium, and finally, 4,120 will be large (Airbus.com, 2018). The Airbus expects 25,000 aircraft from the 39,210 to be for growth, while 14,210 will be used to replace the older model. The new aircrafts models consume little fuel, and they are lighter. Since there is a faster growth of passenger aircraft, 60% of the cargo will be transported by passenger aircraft (Lange, 2019). Airbus expects that newbuilds 2,500 freighters will be converted where 60% will be for replacement while the other 40% will be for growth (Airbus, 2019).
In conclusion, according to Airbus, the demand for the aircraft will continue to rise within the next 20 years, and I agree with the forecast findings. With globalization, urbanization, and developments, there is the emergence of middle-class people, therefore, leading to an increase in market and region demand. Also, new technology and enhanced passenger experience through an upgrade of the cabins, training cabin crew, and introducing in-flight entertainment will definitely increase the demand.
Airbus. (2019). (Airbus, 2019). In Airbus. Retrieved from http://gmf.airbus.com/assets/pdf/Airbus_Global_Market_Forecast_2019-2038.pdf?v=1.0.1
Airbus.com. (2018). Global Market Forecast 2018-2037. Retrieved from Airbus website: https://www.airbus.com/aircraft/market/global-market-forecast.html
Lange, B. (2019). Lifting the lid on the Global Market Forecast. In Asianaviation. Retrieved from https://asianaviation.com/wp-content/uploads/Airbus-GMF2019-presentation-Bob-Lange.pdf