For a one-word summary of the megatrend shaping the world’s commercial airliner fleet, read simply “China”. Our annual World Airliner Census, built on Flight Fleets Analyzer data, reveals that during the past year the distribution of the global fleet crossed a milestone. A year ago, North America – always the biggest fleet region – led the in-service jet table with 30% of the global total, ahead of Asia-Pacific and China, with 29%. This year those percentages are reversed.
Indeed, a bit more than reversed: today, Asia-Pacific plus China command 31% of the global passenger jet fleet, with North America at just 28%. China alone has 14%.
The movement has been dramatic. A decade ago, North America’s dominant share was 36%, with Asia-Pacific and China at just 20%. The other mature market, Europe, has seen its share decline from 24% to 20% in the same period.
North America and Europe have seen their jet fleets grow by just 0.4% and 1.2% respectively per year over the past 10 years, reflecting capacity discipline and a focus on fleet replacement. China, during the same period, has seen its fleet grow by 2,000 aircraft – an annual rate of increase of more than 11%. The rest of Asia-Pacific has added 1,500 aircraft, growing at 5.1% yearly.
Moreover, it is worth noting that the in-service fleet per capita figure is much lower in Asia-Pacific – and also in Latin America – than in Europe and North America, highlighting the fleet potential growth of these developing regions.
In the Middle East, the jet fleet has doubled over the past 10 years and now accounts for 6% of the global total.
The outliers, in fleet percentage terms, are Africa and Russia/CIS. Africa’s fleet share has decreased by a percentage point in the past several years to 3%. In Russia/CIS, phasing out most of the Soviet-era fleet has seen its share slide to 4% from a high of 6%.
To make sense of probable trends in fleet size and deliveries, note that global passenger capacity – measured in available seat kilometres, or ASKs – has grown by 4.6% per year over the past 20 years. That yearly capacity growth has been about 0.8% behind growth in passenger traffic – measured in revenue passenger kilometres, or RPKs. The result – attractive for airlines looking to fly full aircraft – is that passenger load factors reached historically high levels in 2017, at just over 81%.
From now, though, Flight Fleets Analyzer expects load factors to increase only marginally, to around 83% in 2037. That is, capacity is set to grow more closely in line with passenger traffic. The 2018-2037 Flight Fleet Forecast, produced by Flight Fleets Analyzer, predicts annual passenger capacity growth of 4.7% per year, just behind 4.8% traffic growth.
No surprise, China is forecast to show the strongest passenger capacity growth, jumping by 7.5% per year over the coming 20 years. That is 0.1% lower growth than in the 2017 forecast, based on new economic predictions, but it still leaves China’s fleet capacity growing at more than twice the rate of North America (3.4%) or Europe (3.2%). The rest of Asia-Pacific will see growth of 4.7%.
By 2037, Europe and North America will be roughly equal in passenger capacity, hosting just over 4 trillion ASKs. Both China and the rest of Asia-Pacific will have surpassed those two most mature markets. And, underscoring its growth trend, China alone will be closing the gap on the combined ASK total of the other countries in Asia-Pacific.
A region to watch is the Middle East, where carriers are expected to expand passenger capacity by 5.5% per year to 2037 to a little bit less than 3 trillion ASKs, driven by the Gulf hubs. However, that growth rate has been downgraded by 0.3 percentage points compared with last year; with those hubs maturing, growth is easing off.
Latin American growth should remain robust, at 6.1% – down slightly on last year’s forecast but still enough to roughly triple regional capacity, to about 1.5 trillion ASKs. Africa (4% growth) and Russia/CIS (4.1%) will double capacity, but both will still be far off the 1 trillion ASK level by 2037.
Added up, the in-service passenger jet fleet should more than double, from 22,460 aircraft at the end of 2017 to nearly 45,500 in 2037. Barely 14% – 3,000 aircraft – of the currently-serving jet fleet will be flying in 2037, so 54% of jet deliveries will be for fleet growth and the rest for replacement.
The standout sector in this growth surge is the single-aisle jets. Where today they account for 58% of the global passenger aircraft fleet (jets and turboprops), by 2037 their dominance is expected to increase such that they make up 65%. During the same period, the fleet share of twin-aisles will increase by just 1 percentage point, to 18%.
The growth of single- and twin-aisle airliners will come at the expense of regional jets and turboprops. By 2037, those types will represent just 8% and 9% respectively of the total global passenger fleet – down from around 13% each at the end of 2017.
Meanwhile, Flight Fleets Analyzer’s survey of global fleet data as of the end of 2017 throws up a few points to note. Boeing’s 787 is the chart-mover to watch, having climbed over the year from ninth to seventh most-flown mainline type. With deliveries running at 11 per month, the Dreamliner fleet grew by one-fifth during 2017.
No surprise, the Airbus A320 and Boeing 737 order backlogs are now dominated by the Neo and Max updates; classic versions have virtually disappeared from the on-order lists.
Gone completely is the Bombardier CSeries, which is now known as the Airbus A220. At Airbus, the A350-800 no longer figures in the backlog – Asiana Airlines converted its order for eight to -900s – and the A340-200 is gone because the last one has been retired from commercial operations.
None of that says anything about whether or not airlines in China and Asia-Pacific are set to be leaders in profit terms. But from a global fleet development perspective, Asia-Pacific prevails. Worth noting, too, is that this tidal change in the customer base must, necessarily, affect the aircraft manufacturing industry. This is already happening – to cite only the highest-profile examples, Airbus has established an assembly facility in China and Boeing is following, and of course there is the advent of indigenous competition.
But while Comac, with its C919 narrowbody and ARJ regional jet, is pushing hard to develop the technical capability to hold its own against Airbus and Boeing in its domestic market, the Chinese airframer will inevitably influence the industry. It may be a very long time, if ever, before Comac matches the established rivals for engineering, build quality and overall desirability, taking into account such relevant metrics as despatch reliability and customer service. What is certain is that, once established in the fleet figures, Comac will enjoy one advantage that neither Airbus nor Boeing can boast; it is Chinese. And, in serving a Chinese market, there will be some benefit in knowing deeply the local customers and their preferences.
Aerodynamics and flight control algorithms are, of course, indifferent to the preferences of human passengers. But while passengers do not always care much – or indeed notice – in what sort of aircraft they are flying, they are very sensitive to its interior specifications and such intangibles as lighting, layout, colour, smell and sound.
In the 1970s and 1980s, Japanese automotive industry executives spent a great deal of time in Europe and the USA to learn what it was that customers wanted from a car. That is, early success in selling Japanese cars to Europeans and Americans was followed by stunning success in selling Japanese cars designed for – and ultimately by – Europeans and Americans.
There may be no cause to believe aircraft will be any different.
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