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2018 Airbus 20-Year Forecast Boosts Commercial Travel Demand by Seven Percent

Airbus recently signaled rising demand in commercial air travel in its annual “Global Market Forecast 2018-2037.”  Citing continued growth of middle classes in developing countries, Airbus expects air travel to increase an average 4.4% per year.  Accordingly, using even conservative estimates, the Airbus forecast anticipates air travel demand will double in the next 15 years.  And meeting this demand will obviously require significant numbers of new airframes.  Thus, with this unprecedented middle-class demand, single aisle aircraft will lead the way.  To meet this demand, Airbus anticipates 36,560 new passenger single aisle jets being built in the next 20 years.

Emerging Middle Class a Global Game Changer

Unsurprisingly, growing middle classes in China and India account for a large portion of this demand.  Referencing an Oxford Economics study, Airbus defines middle class as annual incomes between $20,00USD and $150,000USD per person. Supporting evidence sees global middle classes growing from 40% (2017) to 48% (2027) to 54% in 2037.  Interestingly, these 2037 forecasts show the Asia-Pacific region with the most middle-class households, followed by Latin America and Africa.  Airbus forecasts North America and Europe middle-class expansion during this period to be modest at best.  What’s the game-changer for air travel?  Without question, as this market segment increases, demand for leisure and business travel follow closely behind.

Center of Gravity Continues Shift to East and South

Similar to previous forecasts, Airbus estimates demand in the Asia-Pacific region leading the globe.  Supporting their focus on emerging middle classes, Airbus forecasts Asia-Pacific driving 42% of this demand with North America providing 35%.  To support these conclusions, Airbus cites India and China strategic planning as a key.  For example, India’s “UDAN-RCS” domestic flying initiative aims to make flying more accessible, affordable and convenient.  Similarly, China’s “Belt and Road Initiative” is already stimulating higher air traffic growth.  The Airbus report provides further evidence of this shifting center of gravity by studying air travel hubs and city-pairs.  Thus, moderating middle classes in North America and Europe will continue to enable this air travel demand further east and south.

Future Workforce Impacts Predictable

Providing a qualified and willing workforce continues to be an industry challenge for the foreseeable future.  Another supporting conclusion is the recently published Boeing forecast.  Also, take a look here at other Avi8ion blogs painting a similar picture.  Whilst these forecasts focus primarily on airframes, demand for highly trained staff to operate and service these aircraft remains a large uncertainty.

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