Worldwide Market Forecast · 1/1/2020 · Worldwide Market Forecast 2020-2039 7 Foreword The...

Worldwide Market Forecast 2020-2039

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(Provisional Release)

March 2020

Japan Aircraft Development Corporation


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7

Foreword

The aircraft industry is expertise-intensive, and this has a spillover effect on the industry,

leading to advancement of the country’s industrial structure. Therefore, the aircraft industry

is essential for Japan to be a scientific and technological powerhouse, and a great effort is

made to develop and progress.

It is essential to continuously collect and analyze data relating to the world commercial

aircraft market so that Japan’s aircraft industry can further develop in the future. For that

reason, the Japan Aircraft Development Corporation (referred to below as JADC) shows

demand forecasts for passenger ,cargo and aircraft, based on results obtained by collecting

and analyzing data relating to the global commercial aircraft market involving air transport,

airlines, aircraft makers, etc.

This document summarizing such forecasts is widely distributed not only to those who

are involved in the aviation industry, but also to the general public through our website

(http://www.jadc.jp/en/).

The world is currently in a state of turmoil due to the COVID-19 crisis, with each

country striving to prevent the spread of the pandemic, so the movement of people is tightly

restricted. As such, demand for air passenger transport has decreased drastically, and

airlines and manufacturers have no choice but to deal with the circumstances.

Looking back, the world’s airlines have experienced great turmoil due to terrorism,

disease, and other issues. Each time, within a few years of when the cause was eliminated,

transportation demand has made a strong recovery, and converged on the long-term growth

curve forecast before the turmoil.

This report presents the level of short-to-medium term impact as a forecast made at a

time when sufficient data was not yet available to analyze long-term changes regarding the

COVID-19 crisis. It also presents the long-term forecast line excluding the impact of the

pandemic, based on analysis of actual data for the past 20 years, as a standard for

convergence of the turmoil.

In this report, we use this as a standard model to estimate the impact on transportation

demand and aircraft demand during and after COVID-19. We also attempt to sort out

factors that could relate to the possibility that the world and air transportation market after

recovery from the pandemic will differ from the past both in terms of character and scale.

March 2020


YGR-5103


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Contents

1. Executive Summary ............................................................................ 1

2. Introduction ........................................................................................ 5

3. Industry Overview .............................................................................. 7

3.3 Until the end of COVID-19 ......................................................................... 14

3.4 After the end of COVID-19 ........................................................................ 18

4. Passenger Airplane Demand Forecast ................................................ 23

5. Air Passenger Demand Forecast ........................................................ 41

6. Factors involved in air transportation ................................................ 63

7. Freighter Airplane Demand Forecast ................................................. 75

8. Air Cargo Demand Forecast .............................................................. 85

9. Regional Overview ............................................................................ 95

10. Airplane Demand ............................................................................. 131

11. Aero Engine Demand ...................................................................... 137

12. Methodology .................................................................................... 139

Appendix A Definitions of Airplane Categories .................................................. 141

Appendix B Definitions of Aero Engine Categories ............................................ 142

Appendix C Air Passenger Traffic ....................................................................... 143

Appendix D Air Cargo Traffic ............................................................................. 144

Appendix E Airplane Demand ............................................................................. 145

Appendix F Evaluation of Secondary Deliveries ................................................ 147

Appendix G Changes in Cargo Transportation Results by Major Airlines .......... 148

Glossary of Terms .................................................................................................... 149

Abbreviations ........................................................................................................... 150

Reference Materials ................................................................................................. 152

This report focuses on the results of analysis based on data from the past 20 years, before the

crisis caused by the COVID-19 pandemic. Estimates related to the impact of COVID-19 are

described in Sections 3.3 and 3.4.


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1

1. Executive Summary

The long-term demand forecast for the commercial air transport market provides useful

information for evaluating and reviewing market risk in doing business associated with the

commercial air transport sector, and for devising medium-to-long term business plans and

product strategies. In this document, Japan Aircraft Development Corporation (JADC)

specifically shows demand forecasts for air passenger traffic, air cargo traffic, and airplanes

(passenger jets, passenger turboprop airplanes, and jet freighters), as well as for aero engine

demand, over the 20-year period covering 2020 to 2039.

For the forecast period, the global economic growth (GDP base), will grow at an average

annual rate of 2.75%.

Global air passenger traffic demand (RPK) will grow at an average annual rate of 4.0%, from

8.49×1012 passenger kilometers in 2019 to 18.7×1012 passenger kilometers in 2039, which is

2.2 times larger than in 2019. The growth rate in the Middle east region, which is centered on

long-haul routes, has already fallen (set to an average of 4.1% year). In addition, it is forecast

that China will transition from a rapid growth model of a developing country to a slow

growth model of a high-income country as income increases during the forecast period (set to

an average of 4.7% per year).

The in-service passenger jet fleet will increase from 24,015 units at the end of 2019 to 41,274

units at the end of 2039. Deliveries of new airplanes over the next 20 years will be 35,541

units, with a total value of 5.58 trillion U.S. dollars (at 2019 list prices). Among deliveries of

passenger jets, the largest deliveries will be of 170 to 229 seat airplane class, at 11,562 units.

2019 actual 2039 forecast Growth Rate Sales (2019 US$billion)

World Economic Growrh (GDP) 2.75%p.a.

Passenger Demand (RPK ：×109 passenger km) 8,486 18,664 4.0%p.a.

Passenger Jet Airplane Fleet 24,015 ＊ 41,274 2.7%p.a.

New Passenger Jet Airplane Deliveries 35,541 5,582

Cargo Demand (RTK ：×109 ton km) 253 503 3.5%p.a.

Jet Freighter Fleet 2,023 ＊ 2,896 1.8%p.a.

New Jet Freighter Deliveries 846 260

Total New Jet Airplane Deliveries 36,387 5,842

Passenger Turboprop Airplane Fleet 3,583 ＊ 5,019 1.7%p.a.

New Passenger Turboprop Airplane Deliveries 4,078 85

New Engine Deliveries 89,429 1,318

（＊：This data is based on the database of Cirium. )

Chapter 1 is based on a standard model that does not include

the impact of COVID-19 (shown in Chapter 4 onwards).


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Regionally, large demand will be generated in North America (22%), Europe (21%), China

(17%), and deliveries in these three regions will constitute 60% of deliveries in the global

market.

The in-service passenger turboprop airplane fleet will increase from 3,583 units in 2019 to

5,019 units in 2039. Deliveries of new airplanes will be 4,078 units, with a total value of 84.8

billion U.S. dollars (at 2019 list prices). The largest deliveries will be of airplanes in the 60 to

79 seat class, totaling 1,390 units. Although the trend is towards no region having especially

large deliveries, with airplanes being used widely throughout many regions, many deliveries

will be made in the Southeast Asia (754 units) and South Asia (640 units) regions.

For the forecast period, cargo traffic demand (RTK) will increase at an average annual

growth rate of 3.5%, from 253×109 ton kilometers in 2019 to 503×109 in 2039, 2.0 times the

figure for 2019.

The in-service jet freighter fleet will increase from 2,023 units in 2019 to 2,896 units in 2039.

Demand for new jet freighters will be 846 units (in addition, 1,571 units will be converted

from passenger airplanes), with a total value of 260.3 billion U.S. dollars (at 2019 list prices).

Among demand for production jet freighters, demand for large airplanes will be 450 units,

and demand for medium-wide body airplanes will be 396 units.

Global aero engine demand (including spares) will be 89,429 units with a value of 1.32

trillion U.S. dollars (at 2019 market prices). Among these, demand for jet engines will be

80,453 units, with a value of 1.30 trillion U.S. dollars, and demand for turboprop engines will

be 8,976 units, with a value of 18.7 billion U.S. dollars.

(Terms and abbreviations used in the text are shown on page 149 and after.)


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WorldNew Deliveries

Economics (GDP) 2.75% 40,465

Pax. Traffic (RPK) 4.0% Sales value

Cargo Traffic (RTK) 3.5% 2019US$B

Airline Fleet 2.6% 5,927

Growth measures

North AmericaNew Deliveries





Growth measures

EuropeNew Deliveries





Growth measures

Asia-PacificNew Deliveries





Growth measures

Latin AmericaNew Deliveries




Airline Fleet 1.9% 254

Growth measures

Middle EastNew Deliveries





Growth measures

CISNew Deliveries





Growth measures

AfricaNew Deliveries





Growth measures

＊Airline fleet growth, New delivries and Sales value are the sum of passenger jets, passenger turboprops and jet freighters.

JADC demand forecast with respect to COVID-19

The world’s airlines have experienced great turmoil due to terrorism, disease,

and other issues. Each time, within a few years of when the cause was eliminated,

transportation demand made a strong recovery, and converged on the long-term

growth curve forecast before the turmoil. (Related: Section 3.3)

This is a long-term forecast for the next 20 years based on the analysis of actual

data from the past 20 years. We consider it to be a “standard model” for thinking

about how much global airlines and transportation demand will recover and

converge after the pandemic crisis has been overcome.

In this forecast, we estimated the impact on transportation demand and

airplanes during and after COVID-19 based on this standard model. (Related:

Section 3.4)


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Intentionally Blank


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2. Introduction

The development of an aircraft requires a period of nearly 10 years with development costs of

more than one hundred billion U.S. dollars, from the planning phase to entry into service. Even

more time is needed to recoup the investment. Then, the newly developed model continues to be

manufactured for several decades while several derivatives are developed. Once an aircraft is

delivered, it will continue to be operated for at least 10 years or so, and some for more than 40

years. Because aircrafts are such long-lived products, the aircraft industry is said to have a very

high business risk.

Airlines that purchase and operate such aircrafts are highly susceptible to the economic and

social circumstances of the time, such as competition with new entrants including LCCs enabled

by deregulation and privatization, and

increased costs due to soaring fuel prices.

Aircrafts are very costly, ranging from

billions to tens of billions of Japanese

yen per unit. While the airline industry is

a capital-intensive industry because

airlines need many such aircrafts,

airfares are becoming cheaper and

cheaper, and air tickets are now said to

be commodities.

In order to minimize business and market risks in this business environment, it is important to

continuously and carefully monitor and analyze market trends related to the economic and

social environments surrounding the aircraft industry and the airline industry, which is their

customer.

JADC has been continuously gathering information, and conducting research and analysis of

information on the global commercial aircraft market including aircrafts, air traffic, and airlines.

For members of the aircraft industry and related parties in Japan, JADC has made long-term

demand forecasts for air travel and aircrafts since the late 1970s, in order for such data to be

used as a source when creating long-term product strategies and business plans.

The “Worldwide Market Forecast”, which is the long-term demand forecast by JADC, is

widely released to the public. It shows demand forecasts for passenger turboprop aircrafts with

at least 15 seats and passenger jets with at least 20 seats, as well as jet freighters and aero

engines, which are used for air passenger transportation and air cargo transportation, over the

20-year period covering 2020 to 2039.


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Intentionally Blank


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3. Industry Overview

3.1 Overview of Airline Business

Overview of Global Economy

According to the World Bank’s “Global Economic Prospects (GEP)” (January 2020), the real

global GDP growth rate was estimated to be 2.4% in 2019, the lowest level since the 2008 global

financial crisis.

As a result of the trade war between America and China causing higher tariffs between the two

countries, a large portion of world trade has been subject to protectionist measures. As global trade

and investment stagnate, almost 90% of developed economies and 60% of emerging markets and

developing economies (EMDE) suffered various degrees of economic slowdown in 2019.

However, since autumn of 2019, bilateral negotiations between America and China have entered

Phase 1 of an agreement. This alleviated some trade tensions, and real GDP growth rate in 2020 was

expected to be 2.5%. If trade and investment are stimulated by the easing of trade tensions, then it is

expected that further improvements will be made. Yet there are still risks such as renewed trade

tensions, uncertainty regarding trade policies, and recessions in major economies (especially in the

Euro Zone) and financial turmoil in EMDEs, and these risks are considered to be dominant.

Growth forecasts for developed economies continue to be revised downward, as a result of trade

and manufacturing being significantly weaker than was previously expected. It is said that

investments and experts are particularly weak in the Euro Zone. The real GDP growth rate of

developed economies was 2.2% or more for several years until 2018, but will be 1.6% in 2019, and

is expected to be around 1.4% to 1.5% in the years after 2020.

The real GDP growth rate of EMDEs was 4.3% or more until 2018, but decreased to 3.5% in 2019.

It is projected to recover to 4.1% in 2020, then continue to gradually recover and stabilize at 4.4% in

2022. Although the pace of recovery in EMDEs has been restrained by weak global demand, it is

expected that an immediate short-term recovery will be facilitated by the recovery of a few large

EMDEs.

(As a rule, this document is based on figures from before the impact of COVID-19 became

apparent.)


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Overview of the Airline Business

In these circumstances, according to IATA’s forecast of global air traffic demand in 2019, air

passenger traffic (RPK) is expected to grow by 4.2% year-on-year, and operating income is expected

to shrink by 7.4% year-on-year. Similarly, looking at the financial situation in 2019, although global

airline sales totaled $838 billion, an increase of 3.2% year-on-year, net income is expected to be

$25.9 billion, a decrease of 5.1% year-on-year. In particular, passenger sales increased by 1.1%

year-on-year, but cargo sales decreased by 8.1%, and the sum of the two results in a decrease of

0.45%. Additionally, fuel costs increased by 4.7%*, and labor costs increased by 3.5%.

(*Fuel consumption increased by 1.1%, while fuel unit prices decreased by 11%. This was likely

the result of fuel hedging.)

Looking at the net profit margin to sales by region, airlines in North America were highest at 6.4%,

followed by Europe at 3.0%, and Asia-Pacific at 1.9%.

-2

0

2

4

6

8

10

-20

0

20

40

60

80

100

1999 2004 2009 2014 2019

Operating Profits

RPK

Operating Profits

（×10 9 US$）RPK

（ ×10 12 Pax. km）Passenger Traffic (RPK) and Operating Profits

Source : IATA

-4

-2

0

2

4

6

8

10

Africa Asia-Pacific Middle East Latin America North America EuropeNet

Pro

fit

to S

ale

s (

%)

Airline Net Profit to Sales by Region

2018

2019

Source： IATA December 2019


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Airlines in Japan saw a 2.8% year-on-year increase in the number of domestic air passengers, and

a 2.5% increase in international routes in 2019. The number of Japanese people traveling abroad

increased by 5.9% year-on-year, and that of foreign visitors entering Japan rose 2.2%.

3.2 Overview of airplane orders and delivery

Overview of airplane orders

At the end of 2019, the global fleet of all airlines put together comprised 24,015 passenger jets,

3,583 passenger turboprop airplanes and 2,023 jet freighters in service.

The number of annual orders1 for passenger jets2 and airliner variants of jet freighters, was 1,572

in 2019, a massive year-on-year decrease of 495 units. Despite the need to secure airplanes to meet

the growing demand for air transport and demand to upgrade to newer models that comply with

environmental regulations on CO2 and the like, reduced orders to Boeing (682 less than 2018, and

620 of which were for the 737 MAX) has determined the status of orders for 2019. It has been more

than a year since the 737 MAX was grounded after two crashes in October 2018 and March 2019,

and it is expected that there will continue to be a great effect on results in 2020.

Details of the number of orders were as follows: 393 wide body airplanes (25% of 2019 orders,

130 more units than in 2018), 996 narrow body airplanes (63%, or 506 fewer units), and 183

regional jets (12%, or 137 fewer units).

Among wide body airplanes, the number of orders for jet freighter variants3 was 49 units in 2019,

352589

314 251 246 271

939 9011102

552240

494809

12701442 1404

857 775986 925

243

327

393

341 347 355 385

754 701

1110

725

407

576

1487822

14571798

1170

949

1217

822

1146163

200

217

27 66 73

49 102

114

38

48

15

8

74

36

47

27

14

10

39

10

92

323

4187 148 124

79 213

85

44

21

54

12738

232

78

180

45

86

209

62

63

23

13

051 3

342

51

22

2

75

224

256

78

18

132

65

31

72

111

0

500

1000

1500

2000

2500

3000

3500

4000

1999 2004 2009 2014 2019

UnitsJet Airplane*1 Ordered*2

Others

Embraer

Bombardier

Airbus

Boeing

3245

2460

3345

2330

1848

2067

997

1528

926 712 866 856

1855 1919

2462

1381

718

1214

2655

Source ： Airbus, Boeing, Bombardier, Embraer, Cirium, JADC (Includes some estimations)

2366

*1) Passenger jets (including combi and quick change) and jet freighter variants*2) Net orders (Cancellation was subtracted from order year)

1572


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a decrease of 34 units from the previous year. In addition, the number of orders for major models of

turboprop passenger airplanes in 2019 was 73 units.

(1: Actual net orders received, excluding cancellations from the number of nominal orders)

(2: Including Combi and Quick Change jets)

(3: Including jet freighters, VIP airplanes, and air refueling tankers)

Overview of airplane deliveries

The total number of jet airplanes delivered in 2019 was 1,377 units, a decrease of 387 units from

1,764 units in the previous year. Airbus delivered 50 more units than the previous year, while Boeing

delivered 426 fewer units than the previous year.

Boeing’s decrease is due to the suspension of deliveries of the 737 MAX since March 2019,

stopping at 127 units delivered by March, including 57 units of the 737 MAX. Production and

delivery of the 737 NG has continued without being affected by the 737 MAX, but is nearing the end

of its original production run, and only 70 units were delivered in 2019. During this time, Airbus

delivered 642 units of A320 series models.

The number of jet freighters (newly built wide body freighters included in the number of jets)

delivered in 2019 was 52 units. In addition, the number of major turboprop passenger airplanes

delivered in 2019 was 85 units.

620492 527

381281 285 290

398 441 375481 462 477

601 648723 762 748 763 806

380

294

311325

303

305 320378

434453

483

498 510 534

588626

629635 695

735813

863

82

99147

185222 175 99

7960

61

5934

47

14

26

5944

46 26

20

26

97157

154

12088 135 121

103133 162

12297

108

106

90

92101

108 101

90

89

38 48

39

8 11 8 4

1 0 0

0 0

5

8

15

28 22

21 26

35

19

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1999 2004 2009 2014 2019

Units

Others

Embraer

Bombardier

Airbus

Boeing

1531

13171405

16181651

1131 1107 1192

997 907 923 892 10151087 1081

1160 1103 1171

Source ： Airbus, Boeing, Bombardier, Embraer, Cirium

1564

Jet Airplanes* Delivered

（＊： Passenger jets (including combi and quick change) and jet freighter variants ）

1377

1764


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Status of backlog orders

(Data for the Middle East before 2007 is included in “Others” in the figure above.)

0

1,000

2,000

3,000

4,000

5,000

6,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

（Units） Jet Airplane Backlog by RegionEurope

North America

Asia Pacific

Middle East

Others

0

4,000

8,000

12,000

16,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

（Units） Jet Airplane Backlog by Region（Stacked）

Others

Middle East

Asia Pacific

North America

Europe

0%

20%

40%

60%

80%

100%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Jet Airplane Backlog by Region（Share）Others

Middle East

Asia Pacific

North America

Europe

Asia‐Pacific

North America

Others

Middle East

Europe


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The combined order backlog of passenger airplanes and jet freighter variants as of the end of 2019

stood at 14,525 units. Since 2005, when the price of crude oil (fuel) started to skyrocket, the number

of orders for new airplanes with excellent fuel economy increased, reaching the point that it

exceeded production capacity and causing a backlog of orders to start building up. However, when

the price of crude oil dropped sharply, the number of orders received also decreased, but the number

of back-ordered airplanes remains stable, almost the same as the number of delivered airplanes. The

current order backlog of 14,525 units divided by the average number of deliveries in 2015 to 2018

(1,649 units/year) results in a backlog of 8.8 years. Similarly, the backlog of orders at the end of

2004 before the increase started was 7,783 units, and dividing this by the number of deliveries made

by 4 companies in 2001 (1,153 units), this results in a backlog of 6.8 years.

By region, the backlog of orders in the Asia-Pacific region has been increasing consistently since

the beginning of the 2000s. As a result of this, regional share fluctuated in the early 2000s due to a

decrease in the order backlog in North America, but since 2008 the structure of market share has

stabilized with no major changes.

The order backlog for major models of turboprop airplanes was 340 units at the end of 2019.

Status of airplane production

Both Airbus and Boeing had plans to produce 50 to 60 aircraft monthly in 2019, in order to meet

their respective orders for A320 series and 737 series models of narrow body machines. However,

since the second 737 MAX crash in March 2019 led to a global grounding of the aircraft, Boeing has

been unable to deliver any more of the model. In order to maintain its supply chain, Boeing

continued to produce 40 units a month until the end of the year, but also stopped this at the end of

December. Therefore, about 400 units were completed but could not be delivered, and they remain

unrefurbished.

In 2020, the global COVID-19 pandemic drastically reduced demand for air transport, and airlines

were hit hard, suffering financial problems that threatened their very survival. As a result, many

postponements have been made to the delivery of airplanes scheduled to be received, so

manufacturers have been forced to revise their production plans and announced that they will reduce

production of various models.

Nominal Monthly Airplane Production2018 2019 2020 2021 2022 2023

Q1 Q2 Q3 Q4 Deli-veries Q1 Q2 Q3 Q4 Deli-

veries Q1 Q2 Q3 Q4 AnnualPlan Q1 Q2 Q3 Q4 Annual

Plan Q1 Q2 Q3 Q4 AnnualPlan

Q1 Q2 Q3 Q4 AnnualPlan

737 580 52 127 0 Production resumes in June777 48 45787 145 158 12

A220 33 48A320 417 430A321 201 206A330 49 53A350 93 112 ９〜10

52 40 Ave. 31units/month4.5 4.5 5 3 414 14 10 10 8 7

6

14

60 40 40

30 or fewer in a year 2


13

737 MAX resuming production : Initially 52 units per month. Flights and delivery were suspended

in March 2020. Since April, Boeing has reduced monthly production to 40 units, and continued

production in order to maintain the supply chain, even though they cannot ship these units.

Production has been suspended since January 2020. Boeing plans to resume production in the

second half of 2020, and plans to produce an average of 31 aircraft per month in 2021.

After confirming the countermeasures against the causes of the crashes and recovering the

type certification that enables delivery, Boeing will send out new units from the production line

while making necessary repairs and delivering the approximately 400 units that could not be

delivered. It will take about two years for the production rate to recover to normal.

Even if prospects for resuming delivery are uncertain, initially there were not major

cancellations of the confirmed orders for approximately 4,500 units of the 737 MAX, but

cancellations have begun since April. Contracts for ordering airplanes also include items related

to delays in delivery, and in many cases, it is said that if the delivery is delayed for about one

year, the order maker can return the advance payment and leave the contract without penalties.

787 reducing production : Currently Boeing's main product, the 787 was planned for reduction

before COVID-19 due to the America-China trade war, but the scale of production reduction

was increased in response to COVID-19.

Before: Monthly production of 14 units (present) → 12 units (second half of 2020) → 10 units

(2021 - 2022)

After: Monthly production of 12 units (present) → 10 units (second half of 2020) → 10 – 8

units (2021) → 7 units (2022)

A320 series : Airbus had aimed for monthly production of 60 units for the A320 family, but decided

to reduce this to 40 units monthly after 2020.

A330 : Airbus initially planned to produce 40 units of the A330neo by 2020 (equivalent to 3.3 units

per month), but later decided to produce less than 30 aircraft in 2020 and drop monthly

production to just 2 units in 2021.

A350 : Airbus originally planned to produce 9 to 10 units per month of the A350XWB, but later

decided to reduce this to 6 units per month.


14

3.3 Until the end of COVID-19

Airlines around the world have experienced turmoil due to terrorism, diseases, and the like, but

once the causes have been eliminated, transportation demand has always recovered within a few

years to converge to the growth curve projected before the turmoil. Here, we will estimate the path to

overcoming the COVID-19 and the impact it will have, with a focus on what can be read from the

actual data.

Current Status

As indicated by the pharmaceutical industry, it is expected to take approximately one year to

develop a vaccine, so if work started in March 2020, then society must endure the COVID-19 for

approximately 9 to 10 more months. In order to prevent the spread of the disease, each country has

restricted the movement of people as much as possible, so transportation demand has dried up,

especially for international flights, and most of the profits of airlines have vanished. Even in this

situation, airlines cannot stop a large amount of capital from slipping through their fingers every

month. Even airlines that have a lot of liquidity on hand seem to have only have about 3 months left

before it will be necessary to secure more working capital, so this is an extremely pressing issue.

In these circumstances, some airlines are looking to the government as their last support, but has

declared bankruptcy because they have not met the conditions for support. As a means of securing

liquidity, airlines get loan from financial institutions, selling airplanes to convert assets to cash,

making temporary leave, and taking other such measures. Therefore, it is only natural that the

payment for airplanes will be postponed by making the delivery of them to be postponed.

Cost Structure

Looking at a breakdown of the operating expenses of US airlines in 2019 Q4 shown by Airlines

for America (A4A), operating expenses directly related to operations include fuel costs (18%),

transportation related costs (13%), and landing fees (2%). It is thought that the 33% of the total

expenses will be unnecessary if airplanes are not operating, but 67% will remain1, and airlines are

trying to reduce these expenses with temporary leaves and restrictions on new hires.

(1: Labor costs account for 33% of this)

The cost of owning airplanes (depreciation cost, leasing cost, etc.) is 7%, but, in addition to this, if

airplanes already ordered are delivered, there will be several tens of million US $ of expenses per

unit spent by the airline upon receipt2. (2: As a guide for small narrow body airplanes)

Recovery of demand and orders

The delivery of newly ordered airplanes is often postponed, and so manufacturers have decided to

reduce production.


15

The demand for new aircraft will be derived from the balance between the increase in the number

of passenger airplanes needed due to growth of the transportation market and demand, the number of

airplanes that airlines already possess, and the progress of airplane retirement. However, due to the

COVID-19, air transportation demand has drastically declined, and most routes have been suspended,

so many airplanes are on the ground without job. Demand for new equipment does not occur when

airlines have a large surplus of airplanes. After that, demand for new airplanes will occur after the

recovery of transportation demand RPK, but orders will come after airlines have restored their

financial condition.

With reference to past epidemics

Over the past 20 years, we have experienced two global epidemics: SARS in 2003 and the H1N1

pandemic in 2009. Records from those times are shown in the graph, and when looking back on

those records, we see the following.

SARS (2003):

Name: Severe Acute Respiratory Syndrome (SARS)

Symptoms: Severe atypical pneumonia

High probability of outbreak where there is close interpersonal contact

Cause: Novel coronavirus (SARS-CoV)

Outbreak: November 16, 2002 (Guangdong, China)

Termination: WHO announces the termination on July 5, 2003

Scope: 8,096 cases (774 deaths) across 32 regions and countries

-6

-4

-2

0

2

4

6

8

-60

-40

-20

0

20

40

60

80

1996 2001 2006 2011 2016

Operating Profit

Net Profit

RPK

Order

RPK, Profit, Ordersat the previous epidemicsProfit

（×10 9 US$ ）PPK （ ×10 12 ）

Orders （ ×10 3 ）

Source : IATA, ICAO, Airbus, Boeing, Bomberdier, Embraer

Skyrocketing Fuel Prices

European Debt Crisis911 SARS Financial Crisis

2009H1N1

Resuming Orders

（2005）

RPK initial Recovery

（2004）

Resuming Orders

（2011）

RPK initial Recovery

（2010）

after Pandemic 2009H1N1after SARS


16

(Excerpt from article by NIID (National Institute of Infectious Diseases))

https://www.niid.go.jp/niid/ja/kansennohanashi/414-sars-intro.html

The SARS crisis occurred before the wounds of the September 11th terrorist attacks had fully

healed. This prolonged the final recovery process of RPK since the terrorist attacks.

The SARS crisis itself was declared to be over in the summer of 2003. Comparing the subsequent

RPK recovery process with the expected RPK value1 for each year, RPK had fallen to 87% of its

expected value in 2003, but made a remarkable initial recovery, reaching 95% of the expected value

in 2004. Although it was in a period of high fuel prices, the asymptotic recovery continued until

2007 and recovered2 to 98.7%.

During this recovery process, the airline industry started to turn an operating profit (although very

little) in 2004, with this trend taking hold and turning into net profit 2006. During this time, orders

recovered3 strongly and returned to the pre-911 level in 2005.

(1: Extrapolation of the growth curve of RPK from 1999 to 2019, using the average growth

rate from 1999 to 2019.)

(2: After 2008, losses were suffered again due to the turmoil caused by the global financial

crisis.)

(3: It is natural that the recovery of orders newly made will come after profit recovers.

However, crude oil prices started to skyrocket in 2005. Therefore, it is possible that

airlines which had plenty of operating and financial resources were pushed early by

the need to purchase new models with excellent fuel economy.)

H1N1 (2009):

Name: Pandemic (H1N1) 2009

Symptoms: Sore throat, sudden high fever, cough, runny nose, malaise, other symptoms

indistinguishable from seasonal influenza. The fatality rate reported in Mexico

was about 0.4-0.5%, which is higher than 0.05% of seasonal influenza and about

the same as Asian influenza. More than half of the patients in fatal cases had

underlying diseases such as asthma, diabetes, heart disease, and impaired

immune function.

Cause: Novel influenza virus (influenza A (H1N1) pdm: AH1 pdm)

Occurrence: April 12, 2009 (reported by Mexico)

Termination: Ended in March 2010 in Japan.

(Excerpt from article by NIID (National Institute of Infectious Diseases))

From https://idsc.niid.go.jp/iasr/30/356/tpc356-j.html


17

The H1N1 flu pandemic occurred during the process of recovery from turmoil caused by the

global financial crisis of 2008, so its effects were compounded with those of the financial crisis and

skyrocketing fuel prices.

The H1N1 crisis itself ended in the spring of 2010, but when comparing the subsequent RPK

recovery process after that with the RPK expected value of each year, RPK bottomed out in 2009 at

87%. Initial recovery was made from 2010 to 2011, when RPK recovered to 90.6% then 92.4% of

expected value. During this period, skyrocketing fuel prices became normal and the recovery of the

RPK was also held back by this, but the asymptotic recovery continued until 2014, when RPK

recovered to 95.7%.

During this recovery process, the airline industry returned to profitability in 2010. Orders made

began to recover in 2010 and returned to levels before H1N1 and the financial crisis in 2011.

Recovery from COVID-19

Looking at these two cases, we can see the pattern of the recovery process as follows.

・Recovery of RPK will start immediately after the end of the pandemic and the initial recovery

will be completed by the end of the next year.

In the case of SARS, RPK recovered to 95% of the expected value.

・Asymptotic recovery will continue for about 3 years after the initial recovery. In the case of

SARS, it recovered to 99% of the expected value.

・Operating income in the airline industry will return to profitability due to the initial recovery of

RPK. After one year delay, net income will be in the black and orders for new airplane will

recover.

Using these patterns, we can speculate on the recovery process from COVID-19 as follows.

・Vaccine development is being undertaken urgently in various countries. However, even when

development is complete, it will take time to produce and disseminate a vaccine and then obtain

immunity by vaccination. Even if the vaccine is put to practical use by 2020, establishment of

immunity on a social scale is not expected until the end of 2021, even in early vaccinating

regions such as developed countries. As each country eases its own epidemic controls while

observing the spread of immunity, the demand for international and regional transport will

begin to recover. Domestic flights will recover before this.

・In response to the spread of vaccination, RPK of international routes will really start to recover

in 2021, but initial recovery is expected to be completed in 2022 depending on the vaccination

rate. Around this time, the delivery of ordered airplanes will fully resume as airlines recover

their financial strength.

・It will take about 3 years (around 2025) until the asymptotic final recovery of RPK.


18

・Orders made for new airplanes are expected to recover in 2023, the year after completion of the

initial recovery of RPK (return of profitability).

3.4 After the end of COVID-19

Enabling the prevention and treatment of COVID-19 will allow both the world and the airline

industry to make a full-scale recovery. However, without them, in order to prevent the spread of the

COVID-19, it was necessary for society to stop the movement of people, and in turn halt industry

and the economy. For this reason, massive losses were inflicted on economic activity and people's

lives, said to be the worst since the Great Depression. Since an impact is expected on GDP and RPK

as well, we will try to estimate the scale of the impact from currently available information.

Impact on GDP - RPK

Although events are still under way and assessment of the impact of COVID-19 on the global

economy (GDP) is not yet finalized, GDP growth forecasts extracted from reports* issued by several

institutions are shown below.

0

5,000

10,000

15,000

20,000

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

RPK（×10 9） Impact of COVID‐19 on RPK (projection)

RPK（Actual Value）RPK（Forecast Value : Standard Model）RPK（Expected Value in the past） Projected loss due to COVID‐19

Initial Recovery complete

Asymptotic Recovery complete

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

2019 2020 2021 2022 2023

GDP forecast by various institutions (compared to 2019)

GDP_IHS (2.75%ave.) GDP_IMF WEO 20200414

GDP_OECD 0610 (single) GDP_WB GEP 0608

According to the reports of various

institutions

Extrapolation by JADC

Approx. 5% lower

Standard Model


19

Assuming that the growth rate will be mostly stable and return to the growth rate expected before

COVID-19 after 2022, it is expected that GDP will be about 5% lower than the forecast (standard

model) before COVID-19.

(*: Sources: OECD: OECD Economy Outlook June 2020 (June 10, 2020)

World Bank: Global Economic Prospects June 2020 (June 8, 2020)

IMF: World Economic Outlook, April 2020 (April 14, 2020)）

From the above information, by setting the negative growth rate relative to the standard model to

be 5% for the GDP forecast after COVID-19, and the GDP elasticity of RPK to 1.6 to 2.0*, the

negative growth rate relative to the standard model is expected to be 8% to 10% for the RPK forecast.

(Green line in the figure on the next page) (*: 1.6 was selected as the value in the middle of the

2020s, based on forecast results using the standard model. 2.0 was chosen as a typical value from the

analysis results of past RPK, GDP, and yield.)

RPK is expected to have fallen by about 8% to 10% relative to the standard model by the time

asymptotic recovery is complete. If the growth rate after that is 4.0%, which is equivalent to that of

the standard model, then the negative growth will be equivalent to 2 to 2.5 years of lost positive

growth. From this, we can be see that subsequent RPK will be delayed by about 2 to 3 years from the

standard model.

0

5,000

10,000

15,000

20,000

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

RPK（×10 9） Impact of COVID‐19 on RPK (projection)

RPK（Actual Value）RPK（Forecast Value : Standard Model）RPK（Post COVID‐19 : ‐10% estimated line） Projected loss due to COVID‐19

Asymptotic Recovery complete

Equivalent to a 2 to 3 year delay (shift right )

Initial Recovery complete

The JADC forecast of RPK recovery and units delivered after COVID-19 is based on the information available

at the time of editing. JADC plans to obtain new input information ,such as revised GDP forecast values, and

prepare an updated version for the next fiscal year.


20

Estimated units to be delivered

Based on past cases such as SARS, we can assume that the point in time when initial recovery will

be completed will be when operating surplus (purchasing financial power) of the airline industry has

recovered and delivery is resumed for orders already made for airplanes. Therefore, deliveries

planned for 2020 will be delivered in 2022 onwards, or about 2 years behind schedule. Based on this,

changes in the number of airplanes to be delivered units during the forecast period can be estimated

from the results of the standard model, and these are shown in the table below.

The death toll from SARS was only 774 people in the entire world, but the death toll from

COVID-19 is already more than 500,000 people*, making it a far more severe pandemic. For this

reason, it is thought that the fundamental support for the recovery of passenger transportation

demand will be to establish collective immunity through the development and distribution of

vaccines. Because it may take 1 or 2 years in order to achieve this, each country will assess the

situation on its own, and flights may recover on domestic routes before international routes or

regional routes. In that case, it may be possible that delivery of narrow body airplanes will progress

slightly ahead of wide body airplanes. However, domestic routes only account for about 1/3 of

global RPK, which is relatively small. Therefore, it is expected that the recovery of the financial

power of the airline industry will be slow until the international flights are back in the air.

(*: July 6, 2020 https://extranet.who.int/kobe_centre/ja/covid)

Standard model 1 year delay 2 year delay 3 year delayNJ 24,989 WJ 7,808

total 32,797 NJ 23,890 WJ 7,354

total 31,244 NJ 23,890 NJ 22,776 WJ 6,898 WJ 6,898

total 30,788 total 29,674 NJ 22,776 NJ 21,663 WJ 6,438 WJ 6,438

total 29,214 total 28,101 ( Source : JADC )

No. of Airplanes to be delivered during the forecast period（2020-2039）NJ ( Narow Body Jets )

WJ

( Wide Body Jets )

Standardmodel

1 yeardelay

2 yeardelay

3 yeardelay


21

Other factors

This table shows factors related to COVID-19 that are believed to affect demand for airplanes.

In this forecast, the most likely results are shown within the range that can be quantitatively

predicted at present. Depending on extent to which these factors are realized, there may be an effect

on future long-term recovery level of RPK.

Factor Focal PointAssumptions Establishment/Distribution of Vaccine/Treatment Timing of establishment, Speed of distribution

Contraction and Recovery of GDP Timing and Extent of recovery (Strong correlation between RPK and GDP)

Quarantine measures (immigration/movement restrictions) Timing and Target of regulation removal

Changes in international relations (caused by COVID-19) Restructuring of supply chains → Changes in the flow of people and cargo

Use of indirect/remote media (new modes)

Substitutes for some purposes of air transport → Decreased demand for transport? Teleconferencing (Substitute Meetings: more effective for distant or urgent meetings) Virtual Reality (Substitute Tourism: affordable and easy)

Hygienic awareness

Individual devices, seat arrangement, onboard equipment, airportfacilitiesSpreading awareness of measures to prevent infection whichhave a scientific/medical basis

Survival measures (securing operating capital)Increase debt, Government support → Heavy debt after restarting, Reducing new orders?

（Reducing Expenses）Cancellation of existing orders, Layoffs/Dismissals → Reduced scale of operations after restarting, Delaying recovery?

Responseto the

environmentStart of CO2 emissions regulations Reduced fuel consumption

Driver to replace airplanes of old types

Factors impacting airlines and demand for airplanes with and post COVID-19

Changesin society

Changes inpassengerawareness

Airlines


22

Intentionally Blank


23

4. Passenger Airplane Demand

Chapter 4 presents forecasts for the number of passenger airplanes using the standard model.

Forecast of passenger demand (RPK), the basis for forecasting the number of airplanes, is

shown in Chapter 5.

4.1 Airplane Fleets

4.1.1 Income level and active fleet

In 1998, the global fleet numbered 15,820 passenger airplanes* operating worldwide. By 2018,

this number had increased to 26,365, an increase of 10,545 airplanes or 1.67 times as many in 20

years. (*: Total of jet and turboprop passenger airplanes. For passenger use only.)

The global feet of operating airplanes is growing in response to the increasing demand for

movement and travel due to the growth of the economy and increasing incomes. There is a positive

correlation between the number of airplanes in operation per million people and GDP per capita,

although there are differences depending on the land area and degree of development the ground

transportation network in each country.

Furthermore, in countries and regions with a GDP per capita of less than $10,000, travel demand

is known to increase rapidly as income increases. As such, it is expected that air transport demand

will increase at a high growth rate in Southeast Asia and South Asia, leading to an increase in

passenger aircraft demand combined with the large population in those regions.

( AF: Africa, CH: China, CI: CIS, EE: Eastern Europe, JA: Japan, LA: Latin America, ME: Middle

East, NA: North America, NE: Northeast Asia, OC: Oceania, SE: Southeast Asia, SW: South Asia,

WE: Western Europe)

0

1

10

100

100 1,000 10,000 100,000

Passenger Airplanes in

Service

per m

illion peo

ple

GDP (real) per Capita (2015USD)

Passenger Airplanes in Service per million people( Jet+Turboprop : 1996‐2018 )

Only for Jet+TP Airplanes in Service.Source : IHS, Cirium

CH

SE

SW

AF

NECI

JA

OC NA

WEME

LA

0.1

EE

Unit

Explanations from Chapter 4 onwards based on a standard

model that does not include the impact of COVID-19.


24

4.1.2 ASK distribution by route distance

Passenger airplanes are chosen because of their suitable route distance by airlines. According to

current ASK distribution by route distance for scheduled nonstop services, passenger airplanes are

operated as follows.

・Passenger turboprop airplanes are mainly operated within a range of 1,000 km, and the peak

distance ranges from 400 to 600 km.

・Regional jets are mainly operated on routes ranging from 400 to 1,500 km in regions other than

North America, but in North America, which is a main market for them, their routes extend to

about 2,000 km.

・Narrow body jets can cover 400 to 4,000 km, and they are mainly operated on routes ranging from

900 to 2,000 km. Routes within 3,500 km account for 90% of ASK. For routes of up to 4,500 km,

they account for 98% of total ASK worldwide, and looking at all distance groups, they account for

52% of total ASK worldwide.

・Wide body jets are operated in a wide range of routes from short distance to long distance, mainly

covering 5,500 to 10,000 km, and routes from 4,500 to 13,000 km account for 78% of total ASK

of wide body jets.


25

4.1.3 ASK distribution by airplane seating capacity

ASK distribution by airplane seating capacity by route distance categories break down as follows.

・In the route distance category of 1 to 1,000 km, there is a small peak of 40 to 99 seats in passenger

turboprop airplanes and regional jets, and a large peak of 120 to 169 seats (A320, 737-700/800,

etc.) in narrow body jets, which means airplanes with a 120 to 169 seat capacity are mainly used.

・Even within the range of 1,000 to 2,000 km, 120 to 169 seat airplanes are the largest, and 170 to

229 seat narrow body jets (A321, 737-900ER, 757, etc.) and 230 to 399 seat wide body jets are

also operated.

・In the range of 2,000 to 4,500 km, 120 to 169 seat airplanes are also mainly used, and 170 to 229

seat narrow body jets and 230-399 wide body jets (A330, 767/787, etc.) are operated. In this range,

partly because the route distance is longer, relatively large airplanes such as 170 to 229 seat

narrow body and 230 to 399 wide body jets are used more actively than the 1,000 to 2,000 km

range.

・In the range of 4,500 km or more, 310 to 399 seat jets (A340, 777, etc.) are mainly operated,

followed by 230 to 309 seat jets (A330, 787, etc.), 500-800 seat jets (A380), and 400 to 499 seat

jets (747). 400 to 499 seat airplanes have declined in number due to the recent decrease in the

number of 747 jets.


26

4.1.4 Increase of average seat numbers (increasing seats / upgauging of airplanes)

Comparing 2007 with 2019 regarding the relationship between the number of arrivals/departures

and the number of passengers at the top 50 airports in the world, the number of arrivals/departures

did not change much, while the number of passengers increased. While the average number of

passengers per departure/arrival in 2007 was 98, it increased by 37% to 134 in 2019. During this

period, the global load factor increased by 5.8%, from 76.1% to 81.9%, and even accounting for this,

it can be seen that average number of seats per airplane increased. This suggests that airlines are

responding to the increased passenger numbers by increasing the number of seats (higher passenger

density) or up gauging their airplanes.

Due to the advent of regional jets, the introduction of twin-engine airplanes capable of

long-distance operation, and widespread use of smaller jets with high frequency in operation, the

average number of seats per airplane had decreased by the mid-2000s. However, since the late 2000s,

with the emergence of LCCs (high-density filling), slot limitations due to airport congestion

(difficulty increasing flights), reorganization of redundant routes and reduction in the number of

flights due to airline mergers (streamlining), the average number of seats per airplane on routes of

2,000 km or shorter has first shown an increase since around 2004. Next, since 2005 while airlines

were still coping with soaring fuel costs (increased cost per seat), the load factor exceeded 80% on

an average annual basis. Since 2012 when the passenger load factor went up to its limit and a

considerable number of large four-engine airplanes had been retired, the average seat number per

flight even on medium- and long-distance routes exceeding 2,000 km has shown an increase.

Generally speaking at present, there are more seats available on airplanes (due to higher density

filling and the transition to larger models within the same family).

0

20

40

60

80

100

120

0 200 400 600 800 1,000 1,200

Passengers ( ×

10 6)

Movements (×10 3 )

World Top 50 Airports Operational Performance

2007

2018

Source ： IATA WATS+ 2019 & 2008


27

4.2 Airplane Demand

4.2.1 Passenger Demand (RPK: Standard Model)

In the 20 years from 2020 to 2039, the global RPK will grow at an average annual rate of 4.0%,

increasing approximately 2.2 times from 8.49×1012 passenger km in 2019 to 18.7×1012 passenger km

by 2039*.

(*: Also see the note at end of section.)

(RPK is explained in Chapter 5.)

Airline passenger demand by region will show an average growth rates of 3.1% and 4.0% over 20

years in North America and Europe (Western Europe and Eastern Europe) respectively as these

markets mature, which is similar or lower than the growth rate globally. As a result, the RPK of

North American airlines will increase from 1.92×1012 passenger km in 2019 to 3.56×1012 passenger

90

95

100

105

110

115

120

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Ind

ex (

2001

=10

0)

Trend of Average Seats per Airplane

Source : OAG

1,000-2,000km

<1,000km

2,000-4,500km

>4,500km

0

4

8

12

16

20

1999 2004 2009 2014 2019 2024 2029 2034 2039

COVID-19 Estimation

Standard Model

2.2 x

ForecastActual

5.1% p.a.

World Air Passenger Traffic (RPK)RPK （×1012 ）

4.0% p.a.

2.7 x


28

km in 2039, and European airlines will increase from 1.98×1012 passenger km to 4.32×1012

passenger km. Market share will change from 23% and 23% in 2019 to 19% and 23% in 2039, for

North America and Europe respectively.

Asia-Pacific airlines have experienced annual passenger growth of 7.3% on an RPK basis over the

past 20 years and have grown into the world's largest market. In the future, growth will continue to

be centered on China, ASEAN, and India, with Asia-Pacific growing at an annual rate of 4.8%,

increasing 2.55 times from 2.90×1012 passenger km in 2019 to 7.41×1012 passenger km in 2039, and

the region’s.

Looking at the average annual growth rate of air passenger demand by region, the average growth

0 2 4 6 8

AfricaCIS

Latin AmericaMiddle East

North America（East Europe）（West Europe）

Europe（Japan）

（Northeast Asia）（Oceania）

（South Asia）（Southeast Asia）

（China）Asia-Pacific

Results in 2019

Growth in 2020-2039

RPK (×1012 passenger km)

World Air Passenger Traffic by Region

4.7%

7.1%3.0%2.2%2.8%

4.0%3.8%

7.0%

4.1%3.0%

3.1%

2.8%3.4%

5.5%4.8%

Breakdown of Europe

Breakdown ofAsia/Pacific

23%

22%

1%3%8%3%

3%

16%

2%

9%

2%5%

3%2019 (share)

North America

Europe

East Europe

Northeast Asia

Oceania

China

Japan

Middle East

Africa

Latin America

(23%) West Europe

Asia-Pacific(34%)

Others(20%)

CIS

Southeast Asia

South Asia

19%

21%

2%

2%10%6%

2%

18%

2%

9%

2%4% 3%

2039 (share)

North America

Europe

East Europe

Northeast Asia

Oceania

China

Japan

Middle East

Africa

Latin America

(23%)

West Europe

Asia-Pacific

(40%)

Others

(18%)

CIS

Southeast Asia

South Asia

Airline Passenger Traffic Share by Region (RPK)


29

rate of Chinese airlines has been 12.4% for the past 20 years, but will decelerate to 4.7% for the next

20 years due to the recent slowdown in economic growth and market maturation. However, this

growth rate exceeds the world average, and RPK in 2039 is expected to be 3.35×1012 passenger km,

which is 2.5 times the figure of 1.33×1012 passenger km in 2019.

South Asian airlines, centered on India, are expected to have a high annual growth rate of 7.1%,

while Southeast Asian airlines are expected to have a high annual growth rate of 5.5%. The

combined RPK of these two regions is 0.92×1012 in 2019, or 69% that of China, but thanks to the

high growth rate, it will be 2.97×1012 in 2039, which is 89% of China.

Middle Eastern airlines have grown at an average annual rate of 11.6% over the past 20 years,

drawing in a large amount of passenger demand, but growth has clearly slowed since 2016.

According to the forecast, the annual average growth rate is expected to be 4.06%, so demand is

expected to increase from 0.77×1012 passenger km in 2019 to 1.71×1012 passenger km in 2039,

leaving the market share unchanged at 9%.

Based on this forecast RPK and load factor, global ASK for the next 20 years is expected to grow

at an average annual rate of 4.0%, reaching 22.5×1012 seat km by 2039, which is 2.2 times the level

of 2019.

(Note: The JADC forecast of RPK recovery and number of deliveries after COVID-19 is based on information

available at the time of editing. JADC plans to obtain new input information such as revised GDP forecasts,

and create an updated version for the next fiscal year.)

5.1

2.7

6.0

3.7

9.5

5.0

11.6

3.9

1.0

12.4

4.4

6.8

9.4

8.6

4.0

3.1 3.0 3.8

7.0

3.44.1

3.0 2.8

4.7

2.2

5.5

7.1

2.8

0

5

10

15

20

World NorthAmerica

LatinAmerica

WestEurope

EastEurope

Africa MiddleEast

Oceania Japan China NortheastAsia

SoutheastAsia

SouthAsia

CIS

2000-2019 Results

2020-2039 Forecast

RPK Growth Rate by RegionRPK AnnualGrowth Rate (%)


30

4.2.2 Passenger Jet Airplane Demand

Demand for transport is expected to increase (RPK: an annual average of 4.0%) due to global

economic growth (real GDP: an annual average of 2.75%) even though it is in a downward trend,

and thus, the fleet size required in 2039 to meet the required ASK will increase 1.72 times, from

24,015 airplanes in 2019 to 41,274 airplanes in 2039, despite some factors suppressing the increase

of required airplanes, including rising load factors, introduction of airplanes with more seats

available, and the extension of annual flight hours of airplanes by more efficient maintenance. The

number of passenger jets delivered in the 20-year period from 2020 to 2039 will be 35,541 airplanes.

Among these, 18,282 airplanes will replace current airplanes, accounting for 51% of total new

deliveries. The remaining 17,259 airplanes will be due to new demand in response to growing air

passenger demand.

Of these, at the end of 2019, 3,404 regional jets with 100 or fewer seats were in service. The

number of passenger jets in service will be 3,080 in 2039, and the share of airplanes in service will

decrease from 14.2% to 7.5%. Between 2020 and 2039, 3,068 jets will be retired, and 2,744 new jets

will be delivered, a 7.7% share of new deliveries.

Modern regional jets were realized after the excellent CF34 engine became available in the first

half of the 1980s due to the shift in civilian demand from the military TF34 engine, as well as the

successful development of a business jet. Initially launched in the market as 50-seat aircraft in the

early 90s, it attracted orders as an alternative to turboprop aircraft, transition to low demand routes

from main lines, and the development of new routes Around 2000, regional jets advanced to the

market of 70-seat class machines.

Thereafter, in such circumstances as aviation industry recessions after the terrorist attacks on the

0

10,000

20,000

30,000

40,000

50,000

2019 2039

No

. of

Air

pla

nes

Fleet Developments of Passenger Jet

41,274

24,015

17,259

18,282

5,733

35,541 Replacement

Growth

Retained

49%

51%

New Deliveries


31

U.S. on September 11th, 2001 and rising fuel prices since 2005, airplanes in this class whose cost of

available seat kilometer (CASK) was so high due to their small size, they needed to be quickly

replaced with larger, more economical 70 seat class airplanes. For this reason, as well as their shorter

service life due to their structure based on business jets that were their prototype, they were reduced

in number. The production of regional jets with 50 or fewer seats such as the first generation

CRJ100/200 and ERJ135/145 jets has already ceased in 2007 due to soaring fuel costs. Subsequently,

70 - 100 seat class airplanes such as the second generation CRJ700/900 and EMB170/190 were

supplied to the market.

Many of these models are used in the feeder lines for main lines, but many are subject to scope

clauses and restrictions imposed on airline operations. In North America, the largest market, the

typical restrictions include a maximum of 76 seats and a maximum takeoff weight of 86,000 lbs.

Because of these conditions, airlines that handle feeder lines cannot switch to larger aircraft that are

more economical even if they can expect to gather an adequate number of passengers. As such, the

natural flow towards increasing seats or up gauging is stymied, forming a market for regional jets in

the 70 seat class.

At a time when fuel cost was soaring and improvement of operating economy was an important

issue, it was sometimes necessary to loosen the scope clause to increase the number of seats. Now

that soaring fuel costs have ended, airlines are in a more stable business condition than before, and

there are no signs of movement toward mitigating scope closure, which is a source of labor disputes.

Currently, second-generation 70-seat class airplanes are in production, and the CF34 engine that

supported earlier first and second-generation aircraft has been replaced by more economical

next-generation geared turbofan engines. Development of third-generation aircraft is underway,

including the EMBRAER E2 series and Mitsubishi SpaceJet series.

In addition, the current supply of regional jets is limited to airplanes with more than 70 seats. As

can be seen from the transition to 70-seat class airplanes in pursuit of better operating economy, in

order to supply new 50-seat (or smaller) class airplanes, it is necessary to implement economy

improvement measures that take advantage of the circumstances unique to the 50-seat class and

secure economic efficiency comparable to the 70-seat class. However, it is unlikely that

improvement measures* applicable only to the 50-seat aircraft will be realized for the time being.

(*: One-man operation applying new engines with excellent fuel efficiency and autopilot

technology)

In this forecast, for regional jets that have less than 50 seats, we set our calculations assuming

aircraft will not be supplied within the next 20 years. In previous forecasts, virtual regional jets were

put in a class of 50 seats or less to obtain a certain degree of demand. We did not use the same

settings this time, so the number of regional jets delivered is low compared to previous forecasts.


32

At the end of 2019, 15,937 narrow body jets with 100 to 229 seats were being operated, but they

will increase to 29,171 in 2039, and the share of in-service airplanes will be 70.7%. Between 2020

and 2039, 11,755 jets will be retired and 24,989 new jets will be delivered to airlines. The share of

new deliveries will be 70.3%.

In the 100 to 119 seat class, the smallest group of narrow body airplanes, the introduction of

A220-100 (CS100) into the market has become a hot topic recently. The DC-9 and 737-100/200

were once in this area, but both models have grown out of this area as they have undergone repeated

generation changes and become larger. Although there are reduced length short-body models from

larger family aircraft such as the 737-700, they did not become a popular aircraft because of their

operating economy. The A220 is the first completely new model in a long time in this area, which

was virtually a void until now. The five-row horizontal seating arrangement is also a choice that fits

the characteristics of this class, which was once called “thick and short” for its six horizontal rows.

When the A220 first entered this void, it caused a “300% tariff” crisis involving the U.S. Department

of Commerce, and this remains fresh in the public conscience. Tariffs were overturned by a ruling

made by the U.S. International Trade Commission. Because the A220 entered the Airbus umbrella

and was finally assembled in the United States, it became a stable business, with the higher class

A220-300 becoming a stable business. In the 100 to 119 seat class, there is the A220-100 and an

expanded version of regional aircraft, the E195E2. In the future it will be possible to capture a

portion of passenger demand that went to 120 to 169 seat class airplanes. It is expected that this

number will increase, with 2,628 airplanes delivered in the next 20 years.

3,404 3,080 2,744

15,937 29,171 24,989

4,674 9,023 7,808

0%

20%

40%

60%

80%

100%

2019 Fleet 2039 Fleet New Deliveries 2020-2039

Sh

are

Fleet and New DeliveriesRegional Jet Narrowbody Widebody


33

For classes with 120 or more seats, problems such as economic efficiency and airport congestion

have made slightly larger airplanes such as the A320/A321 and the 737-800/MAX-8 more popular

than the A318/319 and the 737-700. The 120 to 169 seat class is especially common, and orders for

the 170 to 229 seat class are increasing. Some airlines are seeking a successor to the 757 or a 200

seat class aircraft with transatlantic capabilities.

While LCCs are mainly operating on short- and medium-haul routes up to 4 or 5 hour flights,

making them important customers for this class, there are also some attempting longer flight ranges

along with the maturation of that transport market. The demand for airplanes that are bigger than

mainstay airplanes and can fly longer distance is likely to increase in the future.

The airplane classes in the 230 range was the original range that the 757 and 767 were produced

for, and this range can be approached from both the narrow body side and the wide body side.

Narrow body aircraft are preferred for airlines that emphasize cost because they have a lower CASK

than wide body aircraft. However, the single aisle makes it take too long for passengers to embark

and disembark if there are too many seats, and the fuselage must be wide enough to use containers in

cargo compartments, so there is a possibility that twin-aisle wide body aircraft may be more

advantageous.

With regard to the number of airplanes, over the next 20 years, demand for narrow body jets will

remain the highest among all types of jets, and the forecast shows that the largest deliveries will be

those with 170 to 229 seats, totaling 11,562 units and the number of airplanes in service in this class

will be 12,201 units in 2039. It was previously expected that demand would gradually shift from this

class to the 120 to 169 seat class, but as specific airplanes such as the A321LR/XLR took their place

in the market there were fluctuations in ordering trends, and the maximum number of orders has

come into sight. In contrast, the number of airplanes with 120 to 169 seats, which was the largest

1,064 2

2,340

334 580 112

12,534

3,431 2,823

639

2,582

755 1,697

359 395 101 0

2,744 2,628

10,799 11,562

4,332 3,457

19 0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2019 2039 2019 2039 2019 2039 2019 2039 2019 2039 2019 2039 2019 2039 2019 2039

Total

2019 Year-End: 24,015

2039 Year-End: 41,274

2020-2039 New Deliveries:

35,541

2

3,078 2,740

14,230

12,201

5,087

3,816

120

20-59 60-99 100-119 120-169 170-229 230-309 310-399 Over 400

Wide body Jet Narrow body JetRegional Jet

No. of Passenger Jet Fleet and Delivery Forecast by Seat Category

2019 2039

ExistingRetained

New Delivery


34

forecast in the past, was still large at 10,799, and the number of aircraft in operation in 2039 is

expected to be 14,230, continuing to form the largest group.

Looking at the demand for narrow body jets in 50 seat categories, over the next 20 years there will

be deliveries of 8,952 units in the 101 to 150 seat class, 14,902 units in the 151 to 200 seat class, and

1,950 units in the 201 to 230 seat class.

The number of wide body jets with 230 or more seats will increase from 4,674 at the end of 2019

to 9,023 in 2039, with the share increasing from 19.5% to 21.9%. 3,459 jets will be retired and 7,808

new jets will be delivered to airlines between 2020 and 2039. The share of new deliveries will be

22.0%.

The main markets for wide body jets are medium and long haul international routes, and domestic

routes with a high demand. With the introduction of highly fuel-efficient, mid-sized airplanes that

have excellent operational range performance, such as the 787, it is possible to enter the long-haul

market where airlines have found it difficult to profit from larger airplanes such as the 747 and the

777. Among wide body airplanes, deliveries of jets with 230 to 309 seats are expected to be the most

numerous at 4,332 units, and the number of jets in service will be 5,087 in 2039. Deliveries of jets

with 310 to 399 seats will be 3,457 units, and the number of jets in service will be 3,816 in 2039.

Due in part to airlines’ recent preference for medium-size airplanes, sales of wide body airplane,

especially of large jets with 400 or more seats, have not been going well. In the long run, it is

believed that there will exist demand for large jets mainly flying on high-passenger traffic routes

connecting major cities mainly because of limitations of the number of flights caused by airport

congestion, long-term increase of fuel-related prices, but it is expected that there will be some

demand for replacement of airplane currently in service, considering actual orders that airplane

manufacturers have received. The number of airplanes in service with 400 or more seats will

decrease from 395 in 2019 to 120 in 2039, and after the decision to cease production of the A380

(planned for 2021), only 19 units will be delivered in the next 20 years.

By region, North America has the largest number of airplanes in service, with 6,697 airplanes are

in service at the end of 2019. This number will increase to 8,470 by 2039, ranking just behind

Europe. North America’s share of airplane in service by region will decrease from 28% to 21%, and

there will be 7,664 units delivered during that period, ranking first with a 22% share of new

deliveries.

In Europe, the number of airplanes in service, which was 4,931 at the end of 2019, will increase to

8,628 by 2039, and its share will expand from 20.5% to 20.9% during this period. The number of

new deliveries during these two decades will be 7,595, with the share being 21%, which will be the

second largest in the world.

In China, the number of airplanes in service was 3,719 at the end of 2019, which was the third

largest in the world. This number will increase to 7,784 by 2039, making China the third largest in


35

the world after North America and Europe, with approximately 90% as many airplanes as either

North America or Europe. The number of new deliveries during these 20 years will be 6,154, with a

17% share. In addition, 1,456 of the newly-delivered airplanes will be wide body jets (with a 18.6%

share of the number of newly-delivered wide body jets in the world). China will thus be a huge

market for wide body jets surpassing the Middle East (1,139 new deliveries with a 14.6% share) and

North America (1,310 new deliveries with a 16.7% share), placing second after Europe (1,672 new

deliveries with a 21.4% share).

Chinese airlines have achieved rapid growth, centered on mid-range (up to 4,500 km) routes.

While the average growth rate of RPK over the last 20 years has reached 12.4%, making China one

of the pillars supporting the global demand, the growth rate in 2019 has dropped to 8.1%. In addition,

China's GDP per capita has reached 10,000 U.S. dollars, so it is thought that the future growth of

RPK will change from the rapid growth type of developing countries to the slow growth type of

developed countries. In this forecast, we have set 2023 as an inflection point, referring to the actual

results of changes that have already occurred in other regions, and set the growth rate thereafter to a

value close to the world average. As a result, the number of aircraft expected to be delivered over the

next 20 years has decreased by about 900 compared to the previous forecast. (Related: Section 5.3.4)

In Southeast Asia (mainly ASEAN countries), the Middle East, and South Asia (mainly India), the

passenger traffic demand is expected to grow at higher rates than the global average, and the number

of passenger airplanes in service will also increase. In these 3 regions, the number of airplanes in

6,697

806

4,931

1,033

7,686

2,823

608 232

3,719

1,630 560

161

1,580 577 690 109 529 114

1,328 333

1,449 324 807

160 1,117

254

7,664 7,595

13,967

675

6,154

595

3,607

2,227

709

2,217 1,915

917 1,266

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

20

19

20

39

Passenger Jet Fleet and Delivery Forecast by Region

2019 Year End: 2039 Year End: 2020-2039 Deliveries:

Total Fleet24,01541,27435,541

Retained

N.of Airplanes

New Delivery

8,470

NorthAmerica

Europe AsiaPacific

MiddleEast

8,628

16,790

2,550

LatinAmerica

Africa CIS

2,239 1,077 1,520

Japan OceaniaSouthAsia

SoutheastAsia

NortheastAsia

China

2019 2039

ExistingRetained

New Delivery


36

service will be 4,184 units, 2,550 units, and 2,336 units respectively in 2039. Units delivered will be

3,607 units, 2,217 units, and 2,227 units respectively. The Middle East, especially, will see 1,139

new deliveries of wide body jets, which will account for 51% of all new deliveries that will take

place in this region.

Middle Eastern airlines have taken active expansion measures since around 2003 in order to

capture demand for transit-type long-distance passengers in the form of the “6th freedom”, mainly in

the long-distance range (4,500 km and longer). They have achieved rapid growth, with higher than

10% annual growth rate, even more than 20% for a brief period, and has procured many wide body

aircrafts to lead the market. However, because of the fall of crude oil prices since autumn 2014, the

growth rate has dropped rapidly and the RPK growth rate in 2019 has dropped to 2.3% (IATA). This

JADC forecast does not use this level of growth directly, but considering the record growth of RPK

in the Middle East since 2015, market re-dividing rapid growth has ended. Calculations were made

assuming a rate (4.1%) was reached, which is average growth similar to that of the entire global

market. The number of deliveries for the next 20 years has decreased compared to the previous

JADC forecast of the number of deliveries. Airlines have already canceled orders, postponed

delivery, and redesigned models. In addition to this trend toward using existing airplanes until they

are exhausted, depending on the actual growth rate going forward, there is the possibility that the

number of delivered airplanes will decrease even further, especially for wide body airplanes.

(Related: Section 5.3.3)

4.2.3 Passenger Turboprop Airplane Demand

Passenger turboprop airplanes with 15 or more seats were operated by airlines worldwide peaked

at 5,908 units in 1994, but with the expanding popularity of regional jets, those airplanes declined in

number thereafter, and it was 3,583 units at the end of 2019.

0

50

100

150

200

250

300

350

0

100

200

300

400

500

600

700

1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016

Jet

Fu

el P

rice

*(U

S￠

/gal

lon

)

No

. of

Ord

ere

dA

irp

lan

es

Trend of Orders for Passenger Airplanes( Turboprop and Regional Jet )

* : Jet fuel refiner price to end users (nominal price) Source : EIA, Cirium

Regional Jet

Jet Fuel Price *

Turboprop


37

Currently, passenger turboprop airplanes are almost exclusively being operated on routes of 1,000

km or shorter. For this distance range, some routes require a minimum of transportation services

societally and some routes are difficult to switch over to jets technologically. Therefore, even if

airlines reduce the amount of flights or withdraw from unprofitable routes, it is expected that a

certain transportation capacity will be maintained. Additionally, due to the rise of fuel prices that

lasted for a long period, fuel-efficient turboprop airplanes are revaluated, and orders began rising

again from 2005.

However, in addition to the continued competition between 60 to 79 seat turboprop airplanes and

regional jets, since there are few models in production suitable for new procurement for turboprop

3,583

941

2,642

0

1,000

2,000

3,000

4,000

5,000

6,000

2019 2039

No

. of

Air

pla

nes

Fleet Developments of Passenger Turboprop

5,019

Replacement

Retained

4,078

New Deliveries

Growth

35%

65%

1,436

672

113

571

158

1,096

414 55 27 74

35 34 19

319 164 248

87 366

82 45 19

448

92

520

95 231

50

474 512

1,925

29 117 13

754 640

372

47

453 433 234

0

400

800

1,200

1,600

2,000

2,400

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

Total Fleet 2019 Year End： 3,583 2039 Year End： 5,019 2020-2039 Deliveries：

4,078

No.of Airplanes

587

North America

Europe Asia Middle

670

2,339

66

545 528

284

Latin Africa CISJapan China OceaniaSouthAsia

SoutheastAsia

NortheastAsia

Passenger Turboprop Fleet and Delivery Forecast by Region

2019 2039

ExistingRetained

New Delivery


38

airplanes in the 80 to 99 and 20 to 39 seat class, it will be difficult to make more units even if they

are more highly evaluated.

Turboprop airplanes in service will increase from 3,583 at the end of 2019 to 5,019 at the end of

2039. During this period, 2,642 of these airplanes will be retired, and 4,078 new airplanes will be

delivered.

By region, the number of passenger turboprop airplanes in service is large in North America and

Europe, as in the case of passenger jet airplanes. However, 300 to 500 passenger turboprop airplanes

are used in each of the other regions, such as Latin America, Africa, Oceania, and Southeast Asia. It

can be said that this type of airplane is used widely throughout many regions, and not eccentrically

located.

Routes which require a minimum level of aviation services or geographically specific routes (e.g.,

routes to isolated islands) will continue to require turboprops, even if they are low in demand. It is

expected that airplanes with 15 to 19 seats will continue to be operated on such routes, and 885 units

will be delivered during the next 20 years.

Currently, in this class, new airplanes are only produced and supplied in small quantities, and

airlines are forced extend the life of their airplanes as they continue to operate. The average age of

airplanes operating in this class is 28.3 years old, but 46% of the airplanes are over 30 years old, and

14% of them are over 40 years old. The DHC-6 accounts for 80% (186 units) of the airplanes aged

40 and over, and when this age range is expanded to 30 years old, there are also many of the Do228,

Jetstream31, and EMB110 in addition to the DHC-6. In the age range of 30 to 20 years old, there is

the Beech 1900 (255 units), and they are gradually beginning to exceed 30 years old.

In JADC forecasts of previous years, virtual airplanes were set in this class to calculate demand,

but recently Cessna in the United States announced development of the SkyCourier, its first new

model in a long time, and passenger airplanes with 19 seats are also planned for development. As a

result, the forecast of the number of delivered aircraft has increased significantly from the previous

346 aircraft. Due to increased demand for airplanes that will be absorbed in this class, fewer

airplanes will be delivered in the 20 to 39 seat class.


39

In 2019, 510 airplanes with 20 to 39 seats were in service. The DHC8-200 and SAAB340 are

widely used in this class, and together these two models account for 70% of the airplanes in

operation in this class. 72% of the entire class is in the age range of 20 to 29 years old, and it is

thought that these aircraft will reach their economic lifespans in the first half of the 2020s. Therefore,

North American airlines in particular are calling for replacement airplanes, but no suitable

replacement airplanes in this class are currently in production. JADC, making a calculation based on

high-speed cruise type turboprop airplanes with 30 seats in this class, forecasts that demand for new

airplanes will be 678 units for the next 20 years, and 696 units will be in service in 2039. However,

since there has been no actual supply of new airplanes, the average age of existing airplanes in

service is 26.3 at the end of 2019 and it is increasing over the years. Therefore, hope abounds for

new models of airplanes to start their production.

Of airplanes operated in the 40 to 59 seat class, about 16% are over 40 years old, with the

An24/26 accounting for the majority. 70% of these airplanes are in the age group of 30 and under,

and nearly all of them are just 2 models: the ATR42 and DHC-8-300. Of these, the ATR42 is still in

production, but the number of units delivered annually does hardly changes, averaging just 5 units

per year. The DHC-8-300 cannot be replaced because production has been discontinued, and some

airlines may take measures such as making repairs to extend the economic life of existing airplanes.

The average age of airplanes currently operating in this class is 24.4 years old.

Almost all airplanes operated in the 60 to 79 seat class are one of two models: the ATR72 or

DHC-8-400. New units are being supplied for both models, and most of the orders for turboprop

passenger aircraft since 2005 are for these two models. For this reason, the supply of airplanes is

proceeding smoothly, and the average at the end of 2019 was just 7.8 years old.

The number of airplane deliveries in the 40 to 59 seat and 60 to 79 seat classes has also increased

1,196

144

510

18

599

95

1,278

684

0 0

885

678 568

1,390

557

0

500

1,000

1,500

2,000

2,500

2019 2039 2019 2039 2019 2039 2019 2039 2019 2039

Total2019 Year-End: 3,583

2039 Year-End: 5,019

2020-2039 New Deliveries

4,078

696 663

20-39 Seats 40-59 Seats

No. of Airplanes

2,074

60-79 Seats15-19 Seats

1,029

557

80-99 Seats

Passenger Turboprop Fleet and Delivery Forecast by Seat Category

2019 2039

ExistingRetained

New Delivery


40

since the previous forecast. This is largely because demand for airplanes has flowed into the

turboprop side because in this forecast the supply of virtual aircraft has been suspended for 50 seat

class (and smaller), where the supply of new aircraft cannot be expected from regional jet passenger

aircraft. In this class turboprops and regional jets overlap, but one of them will take the lead in

airplane demand.

Since no new airplanes in the 90 to 100 class of turboprop airplanes are currently been supplied,

JADC forecasts that demand for new airplanes will be 557 units for the next 20 years, making this

calculation based on high-speed cruise type turboprop airplanes with 90 seats. Although turboprop

airplanes in this class seem to compete with regional jets, turboprop airplanes can reduce a

disadvantage from their long flight hours caused by slow flight speed when flying on shorter

distance routes, and flight hours can be diluted by the effect of time spent on the ground of airports.


41

5. Air Passenger Market

5.1 Air Passenger Market (RPK) (Standard Model)

In recent years, the world has experienced the 2001 terrorist attacks in the U.S., SARS and the

Iraq War in 2003, as well as the U.S. financial crisis in 2008 and the subsequent debt crises in

Europe. After every incident, the global air transport based on RPK recorded a significant decline.

Furthermore, fuel prices rose from 2005 until 2014, and this weighed on airlines and pushed down

passenger traffic demand. However, it appears that in response to declining fuel prices since the

autumn of 2014, the RPK started to recover, grew at a fast pace of around 6.5% per year since then,

and almost returned to the pre-2001 growth level by 2019.

Thus, air passenger traffic demand is affected by shocks due to external conditions and burdens,

but whenever it happens, such demand shows a tendency to resume growth and return toward its

initial growth curve.

As shown by the red line in the figure, during the evaluation period of the past 20 years (2000 to

2019: Dec. 31, 1999 to Dec. 31, 2019), global RPK has experienced ups and downs, but has grown

at an average annual rate of 5.1%, multiplying 2.7 times from the beginning of the period to the end

of the period. We evaluated the relationship in 13 regions between the actual value of RPK during

this period and the actual values of GDP and yield, which act as the main drivers of RPK growth.

The blue line (standard model) in the figure is the RPK forecast calculated based on this evaluation

and incorporating other factors1. Looking at this, we can see the average growth rate during the

0

4

8

12

16

20

24

198

0

198

2

198

4

198

6

198

8

199

0

199

2

199

4

199

6

199

8

200

0

200

2

200

4

200

6

200

8

201

0

201

2

201

4

201

6

201

8

202

0

202

2

202

4

202

6

202

8

203

0

203

2

203

4

203

6

203

8

204

0

Trend in World Air Passenger Traffic (RPK) Actual

Standard Model

Old Expected Value

Estimated Loss due to COVID-19 and Recovery

Source ： IATA, ICAO, JADC

1980-

1982

2001-

2003

1989-1999 4.7%1999-2009 3.7%2009-2019 6.6%1999-2019 5.1%2019-2039 4.0%

Average Growth Rate2005-2014

2008-

2009

1991-

1993

The shaded portions indicate the air recession.The orange frame shows the period of rising crude oil prices.

4% annually

2.7 x

2.2 x

5.1% annually

Wo

rld

Air

Pa

ss

eng

er

Tra

ffic

( R

PK

: ×

10

12p

as

sen

ge

r km

)

(1: Main items are described in Section 5.2 and later.)


42

forecast period for the next 20 years is 4.0%, and the value is expected to be 2.2 times the value at

the start2. This RPK growth will lead to demand for new equipment during the evaluation period, but

in recent years, the projected GDP growth rate has tended to be lower than past actual values, and

taking the circumstances into consideration, growth of RPK in the future is expected to be slower

than in the past.

5.2 RPK Forecast

5.2.1 RPK Composition

It is understood that air passenger traffic demand (RPK) changes due to factors such as income

level, airfare, population, distance, frequency, seasonality, and availability of alternative modes of

transportation. It is known that above all, income levels (GDP) and airfares (yield) are strongly

related to demand.

As shown in the figure, basically GDP increases at the same time as RPK. Both exhibit very

similar behavior, and clearly show a positive correlation. Conversely, when the RPK increases, yield

generally decreases and shows a negative correlation. Using long-term forecasts and settings for

GDP and yield in this relationship, it is possible to predict a major part of future RPK trends.

There are also phases in the figure when the yield and RPK moved in the same direction. For

example, in 2001 (9/11 attacks) and 2008 (global financial crisis), the economic (GDP) turmoil

wiped out transport demand (RPK), and airlines lowered ticket prices (yield) in an effort to attract

-8

-6

-4

-2

0

2

4

6

8

10

12

-16

-12

-8

-4

0

4

8

12

16

20

24

1989 1994 1999 2004 2009 2014 2019

GD

P G

row

th (

%)

RP

K G

row

th(%

),

Yie

ld G

row

th (

%)

RPK, Real GDP, Real Yield

Financial CrisisH1N1 Pandemic

Iraq WarSARS

9/11 Attacks

Gulf War

Yield

RPKGDP

Crude Oil Price Crush

(2: JADC's forecast for RPK recovery and number of airplanes delivered after COVID-19 are based

on information available at the time of editing. JADC will revise the GDP forecast in the future.

We plan to obtain new input information such as values and make an updated version for the next

fiscal year.)


43

customers, but was overwhelmed. Recently, RPK has been affected by factors such as conflicts,

terrorism, disease, and financial crisis. While it is often possible to recover in a short time if the

cause is removed, sometimes factors can temporarily cause a huge drop in demand. For management

of airlines, it has become more important than ever to take measures against air transport demand

fluctuations caused by such exogenous shocks (or event risks).

In the past, the growth rate of RPK has been almost zero even after being affected by the oil shock,

and has not been negative. However, in recent years, when an incident occurs, the RPK shows a

clear decrease.

5.2.2 World Economy (GDP)

In the spring of 2020, the world has been overwhelmed by COVID-19, and movement and trade

between regions are severely restricted, and work within the region is also unsatisfactory.

The economy and the lives of citizens are greatly affected.

Based on analogous experience with SARS in 2003 and the time required to complete the

COVID-19 vaccine, it is expected to take about 1 year to end the COVID-19 crisis.

As such, it is inevitable that 2020 will be a year in which the world economy and the aviation

industry are deeply damaged. At the time of SARS, the 2004 RPK had almost returned to the growth

trajectory created before the 911 incident. Therefore, it is hopeful that the global economy will return

to its place by 2022, even with the COVID-19 crisis.

2.75%

3.91%

1.90%

1.47%

1.36%

2.55%

0.83%

2.33%

4.49%

1.64%

4.36%

5.55%

2.87%

2.77%

3.61%

2.12%

3.03%

5.22%

2.09%

1.72%

1.60%

3.41%

0.92%

2.87%8.74%

3.87%

5.17%

6.26%

3.86%

2.11%

3.99%

3.97%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

WorldAsia/Pacific

North AmericaEurope

Westen EuropeEastern Europe

JapanOceaniaChina

North‐East AsiaSouth‐East Asia

South Asia

Middle East

Latin AmericaAfrica

CIS

Average Real GDP Growth Rate per annum

Economic Forecast by Region ( Real GDP Growth )

2020‐2039

2000‐2019Europe Breakdown

Asia/Pacific Breakdown


44

Since much of the work on the collection and calculation of data for the compilation of this

document has been done before the spread of COVID-19 to the world, the content of this document

is based on the Standard Model which is not affected by COVID-19. (Related : P.3)

According to the IMF (October 15, 2019), the real global GDP growth rate in 2019 was 3.0%.

This is based on trade stagnation caused by the trade war, geopolitical instability, economic

slowdown in emerging economies, as well as structural long-term factors such as the aging

demographics and sluggish productivity in developed countries.


45

For the time being, the world economy is concerned about the conflict between the United States

and China, the review of trade relations between the United States and related countries, and the

effects of refugee migration and BREXIT in Europe.

In addition, in Asia, China is expanding militarily and pressing the high seas, and thus the freedom

of trade. In the Middle East, there is a possibility that crude oil prices may fluctuate due to the

disagreement of related countries in the region.

In the long term, during the forecast period from 2020 to 2039, the real global GDP (calculated in

2015 US$) is forecast to grow at an average rate of 2.75%. During this time period, China, Southeast

Asia (including ASEAN), and South Asia (including India) are expected to continue to have high

GDP growth rates.

Although the average annual growth rate for China is expected to drop to 4.5% in the next 20

years, which is much lower compared to the rate of 8.7% that has been enjoyed over the past 20

years, its huge size will continue to account for massive GDP growth. Furthermore, expected growth

rates for Southeast Asia and South Asia will be between 4.4% and 5.6%. In contrast, economic

growth in developed regions is expected to maintain the status quo or slow, and is forecast to be

1.9% in North America, 1.5% in Europe, and 0.8% in Japan. As a result, global GDP will grow by a

factor of 1.7, from 84 trillion dollars in 2019 to 144 trillion dollars in 2039.

5.2.3 Passenger yield

The world average real passenger yield fell by about 2.0% per year over the past 20 years, between

1999 and 2019. Major factors that reduced the real yield over that period were airlines’ efforts to

reduce operating costs by introducing new models of airplane with better operational economy, and

their streamlined operation. Recently, the rise of LCCs and their competition with existing airlines

have also been added to these factors.

0

5

10

15

20

25

1989 1994 1999 2004 2009 2014 2019

Trend of Real Yield by Region2015 UScent/RPK

World

Source : AEA, A4A, ICAO, IATA, Cirium

North America

Western Europe


46

Thanks to end of a nearly decade long trend of soaring fuel prices, as well as further improvement

of airplane operational economy and corporate efforts by airlines, competitiveness among airlines

including LCCs, and other factors, it appears that airfares will continue to fall. However, even cost

reductions by airlines seem to have reached their limit, and airlines are of course seeking increased

yield, which means the trend will have a more moderate decline in airfares than ever before.

Real passenger yields during the forecast period are expected to decline at an average annual rate

of 0.8%, accounting for the effects of competition among airlines and fluctuating fuel prices.

5.2.4 Passenger load factor

The global passenger load factor reached 82.0% on average in 2019. It increased by about 13%

over the past 20 years, from 68.6% in 1999. In North America and Europe, the annual average

passenger load factor reached 84.0% and 84.6% in 2019 respectively, and the U.S. reached a

passenger load factor of 88% during the busy season of 2019. Passenger load factors in other regions

also have been rising every year, with many exceeding 80% on average.

This high passenger load factor is the result of striving to improve RASK (revenue per ASK)

while making the increase of ASK lower than that of RPK, in order for airlines to secure their profits

in response to the significant rise in the break-even load factor due to a decrease in revenue resulting

from lower airfares due to competition between airlines including LCCs, and an increase in

operating costs resulting from soaring fuel prices.

Crude oil prices, which had soared for nearly 10 years, have fallen sharply since the autumn of

2014. However, forecasts about future crude oil price trends, while they differ in matters of degree,

have expected rising prices due to increased demand for oil due to economic recovery and economic

40

50

60

70

80

90

100

NorthAmerica

Europe Asia-Pacific

MiddleEast

LatinAmerica

Africa CIS World

Load Factor (%) Passenger Load Factor by Region199920192039


47

development. In addition, in an environment where every country should be required to achieve

significantly lower CO2 output towards 2050, it will be difficult to carelessly increase consumption

of fuel. In addition, since passenger fares are also not expected to rise significantly, due in part to

competition among airlines, in this forecast the global passenger load factor is believed to be

maintained at a high level considering that airlines will precisely adjust demand and supply in the

future, and it is estimated to rise from 82.0% in 2019 to 83.0% in 2039.

5.2.5 Crude Oil Prices

Crude oil prices, and thus fuel prices, greatly affect air transport economy. Soaring crude oil prices

make the global economy (GDP) cower, and such soaring fuel prices, together with rising airfares

(yield), will prevent the growth of demand for air transport (RPK). The recent soaring crude oil

prices came to an end after about 10 years. However, there is always a possibility that crude oil

prices, and thus fuel prices will fluctuate again due to a future change in the balance of supply and

demand, or an incidental or external factor. In 2018, a temporary fuel price hike put pressure on

airline profits.

In the long term, the idea that crude oil prices will be maintained as they are and that they will rise

has strong arguments from contradictory perspectives such as expansion and shrinkage of demand

for crude oil due to global economic growth and promotion of alternatives to fossil fuel, production

60

65

70

75

80

85

90

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021

US Airline Passenger Load Factor

Monthly Average

Annual Average

%

( Soaring Fuel Price Period )

Source : BTS

0

50

100

150

200

1990 2000 2010 2020 2030 2040 2050Ave

rag

e S

po

t P

rice

(2

019U

S$

/bb

l.)

Average Creude Oil Price (Actual and Forecast : Brent Crude Oil )EIA High Oil Price

EIA Low oil and gas supply

EIA High economic growth

EIA Reference Case

EIA Low economic growth

EIA High oil and gas supply

EIA Low Oil Price

Brent Crude (real)

IHS Brent(& JADC)

Source : EIA, IHS Markit

Brent Crude Oil Price( Average Spot Price )


48

adjustment by OPEC, and increasing production by non-OPEC countries.

In the long term, both the theory of rising oil prices and the theory of maintaining the current

situation have their own arguments, such as expansion of demand for crude oil due to global

economic growth and shrinkage of demand due to promotion of alternatives to fossil fuel, production

adjustment by OPEC and increasing production by non-OPEC countries. JADC has set input

conditions assuming that supply will not be tightened for a while, but predicts that it will moderately

increase, considering increasing production by non-OPEC countries, decreasing demand for

conventional crude oil due to commercialization of shale oil, and the many oil-producing countries

whose primary balance is still negative at the current level of crude oil prices aim to increase crude

oil production to secure revenue, among other factors. The graph above shows the pricing used by

the JADC based on those set by IHS. For the 20 year forecast period, crude oil prices will rise at

0.2% on average per year, and will be included in changes in RPK forecasts through the changes in

yield.

5.2.6 Environmental challenges

Environmental issues related to the aviation industry have Traditionally been focused on the noise

and air pollution affecting the environment surrounding airports. Recently, the problem of global

warming has attracted more attention, and attention has also turned to aircraft CO2 emissions*.

(*Accounts for 1.8% of global annual CO2 emissions)

It is expected that there will be demand for a strong response to environmental issues in the future,

and airlines would be upgrading to highly fuel-efficient aircraft, adopting efficient operating

methods that save fuel, use alternative fuels, etc. These measures will be further advance in the

future.

In the past, noise and exhaust were externalities of the economy of passenger aircraft. CO2

emission control in recent years has become associated with emission trading and is directly

incorporated into the economy of airlines. As a result, there will be more demand for new

generations of passenger aircraft using new environmentally friendly technology. Furthermore, this

would be a driver in promoting replacement of old airplanes, in addition to the conventional fuel

economy.

CO2

In 2017, CO2 emissions from international air traffic amounted to 554×106 tons, an increase of

5.6% from 2016. This was about 1.8% of total global CO2 emissions; however, this is forecast to

increase along with the growth in air traffic.

ICAO, at its 37th Assembly in 2010, decided on global reduction goal of improving fuel efficiency

by 2% annually until 2050, and to prevent any increase in CO2 emissions from 2020 onwards, as

goals including both developed countries and emerging countries. Moreover, at the 38th Assembly of


49

ICAO in 2013, it was decided to build an emission reduction system using the market mechanism

(so-called emissions trading) in 2016 and apply it from 2020. At the 39th Assembly of ICAO in 2016,

191 nations agreed to the regulatory framework for greenhouse gas emissions related to international

aviation. The agreement stipulates that CO2 emissions from airplanes will not increase after 2020,

and obliges each airline to purchase emission credits for excess.

In 2017, ICAO established the CORSIA (Carbon Offsetting and Reduction Scheme for

International Aviation), a system for implementing the agreement created at the 2016 General

Assembly1.

It establishes a standard value for CO2 emissions as of 20202, and airlines will be obliged to

purchase emission credits from 2021 onwards for the amount which they exceed the standard value.

According to data from the Japanese Ministry of Land, Infrastructure, Transport and Tourism (or

MLIT, Japan), the cost burden for emission credits purchases by Japanese airlines are expected to

increase from ten and several million US$ in 2021 to several hundred millions US$ in 2035.

(1: For international flights connecting participating countries. Emissions from routes in which one

of the points of departure and arrival is not a participating country, airlines with CO2

emissions of 10,000 tons or less per year on international routes, and aircraft with maximum

takeoff weight of 5.7 tons or less are excluded.)

(2: Use the average emissions for 2019 and 2020 as the emission standard value that will be the

reference for determining the amount of CO2 emission credits to purchase from 2021

onwards.)

-4000

-2000

0

2000

4000

6000

8000

10000

0

100

200

300

400

500

600

700

1995 2000 2005 2010 2015

RP

K (

×10

9p

asse

ng

er k

m)

CO

2E

mis

sio

ns

（×

10 6

ton

）

Trend of CO2 Emissions from International Air Transport

Source： IEA, ICAO, IATA （ RPK is the global total for airlines, including domestic routes. ）

power and Heating41.4%

Other Energy Industry

4.8%

Manufacturing and construction

19.0%Other10.3%

Automobiles18.1%

International Aviation

1.8%

International Marine2.1%

Other

Trans-

portation24.5%

CO2 Emissions Share (2017)


50

While the aforementioned regulation relates to international aviation, CO2 emissions from

domestic flights in each country are allocated to the total emissions by country including emissions

from the other domestic industries in the country, and thus each country is supposed to seek to

reduce CO2 emissions with its government’s responsibility based on its reduction target according to

the Kyoto Protocol and the subsequent Paris Agreement.

Regarding exhaust gas standards to be set based on aircraft size, it set the Volume III “Aeroplane

CO2 Emissions” to Annex 16 of the Convention on International Civil Aviation (Chicago

Convention). This requires that indicators based on the fuel consumption rate of the aircraft be below

a certain value. It applies to jet airplanes with a maximum takeoff weight of more than 5.7 ton and to

propeller airplanes with that of more than 8.6 ton. Effective dates of the standard shall be as

described below, and if the target aircraft do not meet the standards, then it will not be possible to

manufacture new plane after the standard effective date

① January 1, 2020 for newly developed models and for which manufacturers plan to apply for new

model certification

(January 1, 2023 for jet airplanes whose maximum takeoff weight is 60 tons or below with a

maximum number of seats fewer than 19)

② January 1, 2023 for models already in-production and for which manufacturers plan to apply for

model modification

③ January 1, 2028 for airplanes other than the above which continue to be manufactured.

As the production of CO2 corresponds directly to fuel combustion, efforts to improve the fuel

consumption in aircraft have been made ceaselessly, and this leads directly to lower CO2 emissions.

However, as the examination of CO2 emissions reduction progresses, it has become clear that it will

be difficult to reach the goals simply by means of technological innovations in aircraft and engines.

For this reason, research is progressing on biofuels made with algae as a substitute fuels for fossil

fuels, following the idea of carbon neutrality, but it has been stated from the very beginning that

supply capacity is too low.

In order to meet CO2 emission reduction targets, various measures must be used in combination.

In addition to fuel efficiency and carbon neutrality, GBAS is used to change the pattern of descent

and approach to airports in order to reduce fuel consumption. There is also hope for a more direct

method of reducing fuel consumption by using SBAS to undo the constraints of island-based

navigation support facilities and use oceanic flight routes as great circle routes to shorten the flight

distances.

Noise

Regarding the problem of noise in the vicinity of airports, many large-scale noise regulations have

been implemented from the mid 1980s to the early 2000s, and many passenger airplanes and


51

freighters have been retired, resulting in a generational change of airplanes and technological

innovation. However, even with the popularization of lower noise airplanes than in the past, the

noise problem remains, so many major airports have imposed take-off and landing restriction, as

well as night flight restrictions, in order to reduce noise pollution.

Increased flights and operation of larger airplanes have become necessary in response to the

growth of air traffic. However, there are also concerns about environmental degradation around

airports, and it is not easy to relax departure and arrival restrictions at existing airports or expand

facilities, and new airport construction is also difficult.

In such a situation, the ICAO adopted the application of Noise Standards Chapter 14, which is

stricter than the current standards, at the 38th ICAO Assembly in August 2013. The new standard

will be applied to aircraft that apply for type certification after January 1, 2019*.

(*From the end of 2020 for airplane with a maximum takeoff weight of less than 55 tons).

5.2.7 Demand for travel

As can be seen in data from the UN World Tourism Organization (UNWTO), there is a correlation

between income levels and the number of trips abroad, and demand for travel also increases as real

GDP per capita increases*. (*: In the UNWTO data, trips abroad also include land and sea routes)

As shown in the figure, the change in demand for travel relative to changes in income level is

moderate in developed countries where real GDP per capita exceeds US$20,000, but in emerging

and developing countries with GDP per capita up to around US$10,000, it is clear that the demand

for foreign travel will increase sharply with the increase.

Especially in emerging countries and regions where the income level is still low but the

population is high, if economic growth causes income levels to rise in the future, it is expected to

create a huge middle class and greatly contribute to the increase of air transport demand. Currently

this includes many Southeast Asian countries and Southwest Asian countries such as India, as well as

many countries in Africa, and China has also grown rapidly in this group for a long time.

It has been noted that the qualitative transition from the rapid-growth model of a developing

country type to the slow-growth model of a developed country type occurs around the time GDP per

capita exceeds US$10,000. Developed countries have already exceeded this range, but in the late 90s

Northeast Asian countries experienced a transition around the US$10,000 GDP per capita mark. At

present (2019), China has just reached US$10,000 GDP per capita. As such, while the RPK of China

has contributed to the market growth at a high growth rate so far, it is expected the transition and

have a decreased growth rate soon. The Middle East has also just reached US$10,000. Eastern

Europe, which has achieved a high growth rate of RPK due to the success of LCC, is around

US$13,000, so future trends deserve attention.


52

This transition may proceed gradually and continuously if the period remains calm, but in some

cases transition may proceed in a short time due to political or economic events. An example of the

transition in Northeast Asia was caused by the shock of the Asian currency crisis (1997).

In the present world, things, such as the US-China economic friction and the COVID-19

disease, that can cause the transition are occurring one after another.

0.01

0.10

1.00

10.00

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

Trips ab

road

per capita per year

GDP per capita （2015US$）

Relationship between Income Level and Trips Abroad* (1) (2015)

Source ： UN, IBRD, IHS

United States

ItaliaRussia

China

Brazil

India

Switzerland

France

Japan

HungaryGermany

Canada

Australia

Netherland

United Kingdom

New Zealand

( * : Trips include land and sea routes)

0.00

0.01

0.10

1.00

10.00

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

Trips ab

road

per capita per year

GDP per capita （2015$US）

Relationship between Income Level and Trips Abroad* (2) (2015)

Source ： UN, IBRD, IHS

( * : Trips include land and sea routes)

0.001

Japan

China

Korea United States

United Kingdom

France Russia

Czech

India

Thailand


53

5.2.8 Retirement

The retirement and replacement of passenger airplanes depends on changes in economic

conditions (demand for transport), changes in fuel prices, compliance with noise regulations, or the

advent of or demand for new models of airplanes with new technologies. Implementation of

large-scale noise regulations and the rapid rise and remaining high of fuel prices have resulted in

many retired airplanes, and a large demand for new airplanes. It has become a driving force for

disseminating technological advances and economic improvements to the aviation industry through

the metabolism of aircraft.

Looking at recent years, the retirement of aging airplanes to which the Chapter 2 Noise Standard

of ICAO Noise Standards applies (those aged around 30 years) took place intensively until 2002.

The several years following the retirement of aging airplanes was relatively calm, when airplanes

aged around 25 years constituted the majority of retired planes each year (the average retirement age

of airplanes was around 27 years).

However, since fuel prices began to rise in 2005, airlines were forced to replace even relatively

young airplanes, not to mention aging ones with high maintenance costs, with even more

fuel-efficient ones. As a result, especially since 2009, the retirement age of airplanes has rapidly

been getting younger, with those aged around 22 to 25 years constituting the majority of retired

airplanes and even those aged around 18 years being retired. After that, due to the fuel price calming

down from 2015 onwards, the rush of retirement and renewal of airplanes calmed down, but the

average retirement age has remained at about 23 years. While the pressure for retirement has been

eased due to fuel prices stabilized at a low level, it is believed the current level of service life will be

maintained for a while, partly because of the huge order backlog.

In addition, in recent years, with the rise of LCCs, the number of aircraft operated at high

frequency has increased, and as a result of being overused, these airplanes may be retired at an

earlier age than the average retirement age for existing ones. Since LCCs are still newcomers to the

industry, it seems that there are a small number of airplanes that have actually reached their service

lives; however, it is believed that in the future, this type of earlier retirement will become apparent

and result in lowering the average retirement age for airplanes, especially narrow body jets.

Looking at passenger jets from Western manufacturers, in 2005, 306 airplanes were retired, with

an average retirement age of 27.5 years. Since 2008, over 400 airplanes were retired each year; from

2011 to 2014 almost every year saw the retirement of over 500 airplanes. Although this trend has

subsided slightly since 2015 when fuel prices dropped, the number was 443 in 2018. The average

age of retired airplanes declined from 27-28 years to approx. 23 years. In 2018, it was 23.6 years. At

present, the majority of retired airplanes are ones that were delivered from the mid-1980s to the

mid-1990s.

Around 1980, the number of retired turboprop passenger aircraft manufactured in the Western


54

manufacturers was about 20 units per year, and the average retirement age was about 21 years. Since

then, the number of retired aircraft has increased almost linearly, reaching 80 units in 2001, and

since then the average number of retired aircraft has remained at about 85 airplanes per year. The

average retirement age has consistently been on an upward trend since the 1960s, remaining around

25 years from around 1980 to around 2000. Since then it has gradually increased again and was 27.6

years in 2018.


55

Similar to jet airplanes, the number of retired turboprop airplanes in a year decreased from the

peak. However, the average retirement age of turboprop planes has gradually increased over the past

50 years or so, in contrast to that of passenger jet airplanes, and in recent years the level has reached

26 to 28 years.

Partly because turboprop passenger planes have been reappreciated due to their superior fuel

efficiency in the face of soaring fuel prices, and suitable airplanes for replacement with certain

capacities in terms of number of seats are not in production, turboprop passenger airplanes now tend

to experience longer use than passenger jets.

Secondary Deliveries

For an airline to continue its transportation business, it must always secure the necessary

transportation capacity, which is to say the number of airplanes. Therefore, the retirement of

passenger airplanes in possession is linked to the procurement of airplanes for replacement.

Normally, the average age of retired passenger aircraft was about 25 years, with a distribution

about 4 to 5 years around it. However, in recent years, many aircraft have been retired in less than 20

years. Most of these are estimated to have been operated with high frequency on short-haul domestic

flights of LCC or FSC. In view of the success of LCC in recent years, it is believed that this type of

early retired aircraft will increase in the future.

In such a case, some airplanes, which have been delivered early in the forecast period (20 years)

covered by this document, might retire before the end of the period, and new airplanes for

replacement would be delivered within the period. We call these replacements “Secondary Deliveries”

in this document. The Secondary Deliveries will lead to an increase in the total number of airplanes

to be delivered in the period. (Related: Appendix F)

5.3 Examination of RPK

5.3.1 Effect of Crude Oil Price on RPK

Passenger Transport demand (RPK) has a strong correlation with the economic situation (GDP)

and airfares (yield). Changes of crude oil prices cause changes in yield through changes in economic

conditions and fuel price. Because of this, rising crude oil prices have a negative impact on RPK

through contraction of GDP and rise in yields.

This page shows calculation results concerning effects given to RPK via yield by crude oil prices.

A ratio of fuel costs to the cost structure of airlines during the period when crude oil prices were

stable has been estimated, and yield changes are estimated considering these fuel costs were

expanding in proportion to fuel prices during the period when fuel prices were soaring. The figures

below show the RPK changes estimated in the foregoing manner. (Related: Section 5.2.5)

Here we have calculated the effect of crude oil price changes on RPK via passenger yield (i.e.


56

airfare) only. There are other effects via GDP, which should be greater than those via yields, but

those effects are not included in calculations here.

5.3.2 Impact of CO2 emission rights

Phenomena that seem to be the result of global warming can be seen all around us in the form of

intense heatwaves, heavy rainfall, floods, and changes in the agricultural products suitable for each

region. CO2 emission controls have been recognized as an important way that people can intervene

to some extent in order to prevent global warming before it has a destructive effect on people’s daily

lives. In the air transport field as well, ICAO/CORSIA agreements mean that airlines are obliged to

0

50

100

150

200

1990 2000 2010 2020 2030 2040 2050Ave

rag

e S

po

t P

rice

(2

019U

S$/

bb

l.)

Average Creude Oil Price (Actual and Forecast : Brent Crude Oil )EIA High Oil Price

EIA Low oil and gas supply

EIA High economic growth

EIA Reference Case

EIA Low economic growth

EIA High oil and gas supply

EIA Low Oil Price

Brent Crude (real)

IHS Brent(& JADC)

Source : EIA, IHS Markit

Brent Crude Oil Price( Average Spot Price )

0

5,000

10,000

15,000

20,000

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

RPK (×109) Effect of Crude oil price on RPK(via Yield only) EIA High Oil Price

EIA Low oil andgas supply

EIA Higheconomic growth

EIAReference Case

EIA Low economicgrowth

EIA High oil andgas supply

EIA Low Oil Price

IHS Brent(& JADC)

RPK Average Jet Airplanes Growth Rate to be delivered

(%) (No. of Airplanes)EIA High Oil Price 3.77 33,532 High oil priceEIA Low oil and gas supply 3.94 34,939 Low oil supply, tight supply/demand balanceEIA High economic growth 3.96 35,082 High economic growth, oil demand also risesEIA Reference Case 3.96 35,113 Reference Case for EIAEIA Low economic growth 3.97 35,175 Low economic growth, oil demand does not riseEIA High oil and gas supply 3.99 35,337 High oil supply, loose supply/demand balanceIHS Brent (& JADC) 4.01 35,541 Reference case for this forecastEIA Low Oil Price 4.09 36,228 Low oil price


57

purchase CO2 emission credit, as a way to promote CO2 emission control. Once this agreement is

applied, airlines will be required to pay unprecedented costs to purchase credit, but ultimately most

of the cost will be passed on to passengers through fares.

In this document, it is assumed that all costs of purchasing CO2 emission credits will be reflected

in the fare (yield), and that CO2 generation and fuel consumption are equivalent. Therefore, we

calculated the impact of RPK assuming the equivalent fuel price (equivalent crude oil price), which

is the sum of the purchase cost of emission credits and the fuel price, and constructing a yield

forecast based on this. (Related: 5.2.6)

********************

When purchasing emission credits, airlines are not obliged to purchase emission credits for CO2

emissions up to the reference value specified based on performance up to 2020, but they are

obligated to cover the excess amount.

As shown in the figure, the excess amount can be divided into the part to be reduced by

introducing new technology and improving operations in the future, and the part that cannot be

reduced and demands the use of economic methods (purchase of CO2 emission rights).


58

In this section, “Case 1” assumes the introduction of new technology and improvement of flight

systems are successful, while “Case 2” assumes these measures fail so the target of emission credits

is maximized.

Trial calculations were made based on the above figures with the following settings.

Based on the aforementioned settings, equivalent crude oil price will be approximately $75 to

$76/bbl. in 2030 and approximately $80 to $83/bbl. in 2040. The cost added to the crude oil price at

each time point is estimated about $4 to $5.50/bbl. in 2030 and about $9 to $12/bbl. in 2040. The

real Brent crude oil price of $75 to $80/bbl. is equivalent to the price level around 2006Q1, the

beginning of the period of soaring oil prices. While not as high as it was around 2008 or 2012,

passengers are likely to pay a CO2 surcharge. As a result, airlines and manufacturers must make

efforts to reduce fuel consumption by improving opeartions and introducing new technologies.

Units 2020 2030 2040CO2 Emissions Reference * ×10 6 CO2 tons 700 700 700CO2 Emissions Excess（Case 1） ×10 6 CO2 tons 0 300 600CO2 Emissions Excess（Case 2） ×10 6 CO2 tons 100 500 1100CO2 Emission Credit Price Euro/CO2 tons 25 30 45* : No emission credit purchase required

0

20

40

60

80

100

120

140

160

180

1990 2000 2010 2020 2030 2040 2050

Ave

rag

e S

po

t P

ric

e (

201

9U

S$

/bb

l.)

Equivalent crude oil price (Reference & CO2 emission credit burden)

CO2 Case 2

CO2 Case 1

IHS Brent(& JADC)

Brent Crude (real)

Source : IHS Marki, JADCt

2020 - 2039 2020 - 2029 2030 - 2039 2020 - 2039

Reference( IHS (&JADC) )

4.02 4.29 3.75 35541

CO2 Case 1 3.99 4.27 3.72 35329

CO2 Case 2 3.99 4.26 3.71 35252

GrowthRate (%)

GrowthRate (%)

Passenger JetDeliveres

(Airplanes)

GrowthRate (%)


59

Looking at the forecast of passenger aircraft demand for the next 20 years based on this equivalent

crude oil price*, as shown in the table, the annual average growth rate of RPK is estimated to

decrease by about 0.03%. (*: No distinction between international and domestic flights)

5.3.3 RPK in the Middle East (slowdown of long-distance traffic)

Middle East airlines have adopted aggressive expansion policies since around 2003, capturing the

demand for transit-type long-distance passenger demand generated by the “6th freedom” of aviation.

They achieved a rapid expansion of RPK focused on long-distance traffic (4,500 km or longer),

reaching an annual growth rate of well over 10% and briefly even over 20%, and procured many

wide body aircraft, leading the market. However, since autumn of 2014, the growth rate has dropped

rapidly after falling of oil prices, and the RPK growth rate in 2019 was just 2.3% (IATA: the sum of

all traffic range categories).

This JADC forecast makes calculations, considering also the RPK growth record in the Middle

East since 2015, assuming that after the market repartition type rapid growth, the growth rate in the

Middle East market will be comparable to that of the global market as a whole (4.1%: total of all

traffic range categories). As a result, the forecast for the number of airplanes to be delivered over the

next 20 years is lower than it was in the previous JADC forecast. Airlines have already canceled or

postponed orders or revised the models, and started effort to use the existing plane longer. Therefore,

depending on the actual growth rate in the future, it is possible that the number of deliveries will

decrease further, especially for large wide-body airplanes.

********************

The characteristics of airline RPK in the Middle East differ between from the short-range traffic

(up to 1,000 km) up to the medium-range traffic (up to 4,500 km) and long-range traffic (4,500 km

or longer). Both the rapid expansion and the rapid deceleration of RPK have occurred on long-range

traffic.

The figure below shows JADC’s estimated values for RPK on long-range traffic. For example, the

average growth rate from 2004 to 2014 was 17.3%, which was far higher than 5.2%, the average

growth rate of RPK globally. Therefore, it is likely that much of this was not due to market growth,

but to the subdivision of existing air transport demand between airlines. Even if this was done

“ideally”, if one eventually gained 100% of the market, it would be saturated and growth rate would

be limited by the growth rate of the market.

Since autumn 2014, the growth rate of RPK in this range has declined along with the fall in crude

oil prices, with an average growth rate of 4.1% from 2016 to 2019, declining to 2.0% in 2019. In the

calculations of this JADC forecast, the average long-term growth rate for the future is set to 3.2%.

Traffic of the ranges up to the medium-range (up to 4,500 km) seems to be mainly used by people


60

who live in the Middle East, based on the results of correlation analysis between RPK, GDP, and

yield, of this region. Moreover, no inflection has been observed in the growth of RPK so far. Based

on these facts and results of analysis of the actual values of RPK, GDP, and yield for the past 20

years, results of prediction of RPK for the next 20 years from the predicted values of future GDP and

yield show that the annual average growth rate of RPK in the medium-range is expected to be 5.8%.

Including long-range traffic, the average growth rate of RPK of all ranges in Middle East region

for the next 20 years is expected to be 4.06% .

10

100

1000

10000

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

RPK (Bil.) Long Range Traffic Forecast - M.East

ForecastHistory

10

100

1000

10000

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

RPK (Bil.) Medium Range Traffic Forecast - M.East

ForecastHistory

Active Fleet

All Ranges LongRange

RJ NJ WJ Total at the end ofForecast

6.02 % 6.46 % 60 880 1410 2350 2654

4.06 % 3.20 % 49 1029 1139 2217 2217Forecast

2020-2039

Two-precedingForecast

2018-2037

RPK Average GrowthNo. of Passenger Jets

to be delivered

5.8%

Records and forecasts of RPK in

long-range :

The future growth rate is set higher

than the actual value in 2019.

Records and forecasts of RPK in

medium-range :

Market characteristics differ from

those of long-range.

17.3% 3.2%


61

5.3.4 China region RPK (transition to slow growth model)

Chinese (CH) airlines have achieved rapid growth, centered on ranges up to medium-range (up to

4,500 km) traffic. While the average growth rate of RPK over the last 20 years has reached 12.4%,

making Chinese market one of the pillars supporting global demand for airplanes, the growth rate in

2019 has dropped to 8.1%. In addition, China's GDP per capita has just reached US $10,000, so in

the future RPK will make a qualitative change* from the rapid growth model of developing

countries to the slow growth model of developed countries within the forecast period.

(*: Related: Section 5.2.7)

In this forecast, an inflection point was set in 2023 at US$13,000 based on the record of actual

changes that have already occurred in the other region. The growth rate after the inflection point is

set to a value close to the world average. As a result, the number of airplanes that will be delivered in

the next 20 years has decreased by about 900 compared to the previous forecast. This qualitative

change can be rapidly driven by some external political or economic shock. In the case of China,

although it is unknown what will trigger it, it is expected that the transition will occur early in the

forecast period (2020 to 2039).

********************

The transition is expected to occur after GDP per capita in the region exceeds US$10,000, but

GDP per capita in China just reached US$10,000 in 2019, and there has yet to be a transition. To

estimate the transition period, we modeled on the Northeast Asian region (NE)*, where actual data

are available and consumer trends are considered to be relatively similar to China.

(* NE refers to Taiwan and South Korea)

The RPK of NE (including all range categories) and the actual values of GDP per capita are

shown in the figures below. As can be seen from the figures, NE experienced a transition when GDP

per capita was around US$13,000. After the transition period, the growth rate of RPK in the region

declined from the high value it had before transition and stabilized around 4% per year. This

transition occurred due to the Asian currency crisis of 1997, and it is clear that it was a short-term

transition caused by a severe shock that reduced not only RPK but also GDP.

Based on these facts, in this forecast the transition period was estimated to be US$13,000 per

capita. By applying this to the forecast values for China, the transition period is expected to start in

2023.

It is unclear whether this transition will be rapid or gradual, but it is highly likely that it will start

early in the forecast period (2020-2039). In this forecast, it is assumed that the transition will happen

in a short period of time, and the average growth rate of RPK after transition has been set at the level

of the world average. It is assumed that the effect of the transition will affect all range categories

similarly.


62

Active Fleet

All Periods Post-Transition

RJ NJ WJ 計 at the end ofForecast

PreviousForecast

2019-20385.66 % − 187 4568 2286 7041 8433

Forecast2020-2039

4.71 % 4.17 % 275 4423 1456 6154 7784

RPK Average GrowthNo. of Passenger Jets

to be delivered

0

50

100

150

200

250

5000 10000 15000 20000 25000 30000

RPK ( 10^9 )

GDP per Capita (2015USD)

NE GDP per Cap. ~ RPK

‐30%

‐20%

‐10%

0%

10%

20%

30%

40%

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

NE RPK Growth Rate (year‐on‐year)

0

5,000

10,000

15,000

20,000

25,000

30,000

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

2015

2018

2021

2024

2027

2030

2033

2036

2039

GDP per Cap. Trend of CH GDP per Capita( Actual & Forecast : 2015USD )

Asian Financial Crisis (1997)

Source: ICAO, IATA, IHS

Source: IHS

Source: ICAO, IATA


63

6. Factors involved in air transportation

6.1 Changes in the airline industry

6.1.1 Mergers

Following deregulation, free competition intensified in the airline industry from the 1980s

onwards, and many new airlines entered the market, leading to excessive competition. Once

American airlines had balanced out after reorganization due to selection and mergers, there were

fewer airlines than before regulation.

Mergers are often an effective measure for airlines not only against excessive competition but also

as a response to drastic changes in external burdens such as soaring fuel costs. Mergers are also

effective for obtaining route operation authorization, slots at airports and usage rights for airport

facilities, owned by the merger partner airline, and making a major and immediate impact on

expanding the company's network and market share. For example, Pan American Airlines sold

Pacific and Latin American routes to United Airlines and European routes to Lufthansa between the

mid-1980s and the final bankruptcy of 1991.

More recently, in the United States, Delta and Northwest Airlines merged in 2008, United Airlines

and Continental Airlines merged in 2010, and American Airlines and US Airways merged in 2013.

As a result of these merger and integrations, the US airline industry has become an oligopoly.

Altogether, these Big 3 airlines and the largest LCC, Southwest Airlines (which absorbed ATA

Airlines and AirTran Airlines in the 2000s), account for 78% of ASK in the US domestic market

(2018). Many signature of once prestigious airlines founded before the World War 2 have

disappeared because of this.

Similarly, restructuring of airlines is also proceeding in Europe and Latin America.

Mergers have been used this way as an effective tool for airlines, but with the progress of

consolidation, mergers have become subject to antitrust risks. Foreign capital investment restrictions

are imposed on investment and merger with foreign capital or airlines, and with a few exceptions,

airlines cannot be funded with foreign capital in excess of 50%.

Under these circumstances, airlines have evolved to form global alliance since after the end of the

1990s.

6.1.2 Alliances

At present there are three well known major alliances: Star Alliance (formed in 1997, 26

companies*), Oneworld (formed in 1998, 13 companies*), and SkyTeam (formed in 2000, 19

companies). (*As of November 2019)

Alliances aim to expand their own networks seamlessly around the world by interconnecting the

routes of member airlines, and aiming also to increase their members further. Within each network,

code sharing among member airlines, mutual use of passenger lounges, through baggage during


64

transit, and integration of mileage programs all serve to improve convenience for passengers and

improve ability to attract passengers. Each airline strives to provide a uniform level of service to

passengers by matching its service level to alliance standards. In addition, alliance members make

joint purchases of equipment, and even joint purchases of airplanes is being studied.

Alliances are similar to mergers in terms of constructing a large route network, but because they

do not involve management integration or control, it is easy to be exempted from foreign capital

restrictions and antitrust laws**, making it easier to expand the network**.

(**: In some cases, a joint venture (JV) is formed, which goes deeper than code sharing. In the case

of a JV, management is integrated to a deeper extent, so antitrust law regulatory authorities

often refuse to give approval.)

As of 2016, airlines affiliated with the Big 3 alliances account for 59% of RPK and 64% of

operating revenue among IATA affiliated airlines.

In terms of business scale, many airlines are affiliated with an alliance. At some airports, airlines

that belong to the same alliance are even gathered at the same terminal for convenience of

connecting flights, and the benefits of joining the alliance appear to expand further. However, some

airlines such as Emirates Airlines and Hawaiian Airlines have bucked this trend. Having noted the

disadvantages of joining an alliance, they are aiming to expand their own networks and improve

convenience on their own. There are also examples such as Etihad Airways that invest in other

airlines and bring them in as equity partners.

Initially, it was expected that airlines which joined an alliance would only form code sharing and

Share of Big 3 alliances (2016)


65

other agreements within their own alliance, but recently there are also examples of airlines code

sharing outside of their own alliance.

In 2016, the Value Alliance (6 companies) was formed as the first LCC alliance in the world,

based in Southeast Asia. Although its functionality is limited in comparison to the three major

alliances, it is said that it will also be possible to make connection reservations through ticketing, and

reservation of ancillary services between member airlines. If successfully implemented, LCCs

specialized in short-distance routes of up to 2,000 km are thought to have the potential to form a

wide area network without significantly changing the business model, so Value Alliance is deserving

of attention.

6.1.3 LCCs

One defining characteristic of the aviation industry in recent years is the rise of LCCs. While

some LCCs are independent and others are subsidiaries of full-service airlines, most LCCs that have

succeeded in establishing and maintaining their business are the type known as the Southwest Clone.

The LCC business model is believed to have been created through the efforts of Southwest

Airlines following deregulation, but congestion at large airports due to more intense security after

the 9/11 attacks in 2001 also seems to have played a role in the rise of LCCs as they exist today. At

the time, LCCs still had a limited presence, but travelers who were frustrated by the time and

physical burden of pre-boarding procedures at crowded large airports, including security checks after

9/11, turned their attention to LCCs operating at relatively empty secondary airports. As a result,

even though LCCs offer sparse in-flight service, they became popular due to their ease of use and

simple operating style, and LCCs gained rapid recognition in the American society. The LCCs

seemed to have the nature of a new mode pushed out by the economic and social shock.

Besides North America, the framework for liberalization had been in place in Europe since 1993,

and the rise of LCCs has been reported in various other regions since the beginning of the 2000s. In

2012, LCCs were also established in Japan and Taiwan, which had been called blank area for LCCs

before then, and many LCCs were also established in emerging countries as the liberalization of the

aviation industry progressed. As shown in the figure below, in 2019, LCCs supply over 30% of seats

even in Europe and North America where income levels are high, and have secured a particularly

high share of seats in regions with relatively low-income levels such as South Asia (mainly India). It

seems that the low cost of LCCs is suitable for discovering air transportation demand in such areas.


66

Operational characteristics of LCCs include using only a single model (or family) of airplane(s),

using narrow body airplanes (low fuel consumption), increasing the number of seats (high density

filling), high frequency operation, and no-frills service. It is thought that realizing these

characteristics relies on being specialized in operating on short-range (short-time) routes.

Some LCCs, after having succeeded in gaining share on short-range routes, have tried to develop

long-distance LCC business, but there are few successful cases, and in many cases routes were

closed soon after opening, or in other cases the business condition of the airlines deteriorated.

The causes for this are not only the burden of procuring long-range airplanes, but also the fact that

flying on medium or long-range routes breaks apart the foundation of the LCC business model,

which was built on the assumption that they would be flying short-range and short-time routes.

One example is the decline in utilization*. It is thought that for medium- or long-range LCCs to

succeed, it is necessary to improve utilization by not letting any airplanes sit idle. ZIPAIR, currently

in preparation for establishment as a subsidiary of Japan Airlines, is planned to combine the

long-distance line of Narita-Bangkok with the short-distance line of Narita-Incheon, so it has

attracted attention as a countermeasure. (*: In this case, the time that one passenger airplane spends

flying in one day)

Value Alliance also deserves attention, as the world’s first LCC alliance established in 2016. In

Value Alliance, LCCs operating in Southeast Asia cooperate with each other to provide services such

as transit reservations and ticketing.

If Value Alliance achieves stable operations, each LCC will be able to provide passengers with a

substantial medium to long-distance LCC travel services through smooth transit, while maintaining a

business model that is specialized for short-distance routes.

0

10

20

30

40

50

60

70

NorthAmerica

WesternEurope

EasternEurope

Japan China North‐east Asia

SoutheastAsia

SouthAsia

Oceania MiddleEast

LatinAmerica

Africa CIS World

LCC cap

acity share of total seats (%

)

Trend of LCC Capacity Share of total seats

2007

2019

Source：Cirium, OAG, JADC


67

6.2 Infrastructure

Infrastructure development, such as airports and airspace (control), is important for the growth of

air transport.

Currently, next-generation air traffic control systems are being developed in Europe, the United

States, and Japan in order to efficiently use airspace, improve congestion, and improve economic

efficiency. However, due to technical challenges and budget constraints, the transition of the system

will be carried out in stages.

At major airports in each country, congestion is already resulting in delays and a lack of landing

slots is impeding the opening of new routes and increases in frequency. At many of the major

airports around the world, delays from 30 minutes to one hour are already becoming regular

occurrences during peak travel times.

According to EUROCONTROL, the delayed time per flight in 28 EU countries will increase from

8.8 minutes in 2012 to 14.2 minutes in 2035, and the resulting total loss of time value is expected to

increase from €4 billion in 2012 to €13.4 billion in 2035.

New airport construction, upgrades of existing airports, such as new or improved runways and

aprons, as well as terminal facility improvements and expansions require a considerable investment

of time and money. In recent years, with a growing awareness about the environment, the

understanding of nearby residents must be obtained regarding the issues of noise and air pollution

around airports.

There is strong desire for long-term efforts in infrastructure development to meet future growth in

air transport demand, but at present infrastructure development has fallen behind the growth in air

fewer Spare airplaneslower Airplane unit price

By limiting the range of Single Model or lower Training costs route distance → Single Family → lower Maintenance costs

lower Related investments

Vital !→ Narrow Body Jet → lower Fuel costs

Short Haul By allowing （low Drag） ↓ less comfortableShort Time → High Density → more Seats

（No. of seats）（per Airplane）

→ no frills → lower Beverage costsLoading food and drink

By crew doubling asCabin cleaning the works or → less ground → lower Labor costs low cost, low fare

abolishing works workers ↓Cargo loading low margin,

short TAT By operating → more Flights → more Passengers high volumeTaxiing more frequently （availability）（Airline overall） ↑

larger scale→ higher Utiliｚation → more capital turnover capital efficiency

Independent （Slots）

Point to Point → Secondary less Landing fee → lower cost LCC !no Network connection airport Facility usage fee

（Ground side conditions）


68

transport.

In this situation, airlines are

increasing the number of passengers

per flight to meet transportation

demand within the limited slots.

Therefore, the number of seats of

passenger planes is increasing (high

density) or the size of passenger planes

is increasing (Upsizing). On the trunk

lines, where there is particularly high

demand for transportation, imposingly

large wide body airplanes used on

long-haul international routes are being

operated even on short-haul routes.

Apart from this, the movement to

spread the load of airport by actively

using the secondary airports in the

vicinity of the congested large airport

has also become established. LCC is an

example.

0

20

40

60

80

100

120

ATLANTA GA, U

S (ATL)

BEIJING, CN

(PEK)

DUBAI, AE (DXB)

TOKYO, JP (HND)

LOS ANGELES CA, US (LAX)

CHICAGO IL, US (O

RD)

LONDON, GB (LH

R)

HONG KONG, HK (HKG)

SHANGHAI, CN (PVG)

PARIS, FR (CDG)

AMSTER

DAM, NL (AMS)

DALLAS/FORT W

ORTH

TX, US (DFW

)

GUANGZH

OU, C

N (C

AN)

FRANKFU

RT, DE (FRA)

ISTA

NBUL, TR (IST)

NEW DELHI, IN (DEL)

JAKARTA

, ID (CGK)

SINGAPORE, SG (SIN)

INCHEO

N, KR (ICN)

DENVER CO, U

S (DEN

)

Passenger Traffic (×

10 6man/year)

Passenger Traffic on Major Airport

2010 2017

Source:ACI, IATA

0

1

2

3

4

5

6

HONG KONG, HK (HKG)

MEM

PHIS TN, U

S (MEM)

SHANGHAI, CN (PVG)

INCHEON, KR (ICN)

ANCH

ORAGE AK, U

S (ANC)(*1)

DUBAI, AE (D

XB)

LOUISVILLE KY, US (SDF)

TOKYO, JP (NRT)

TAIPEI, TW

(TPE)

PARIS, FR (CDG)

FRANKFU

RT, D

E (FRA)

SINGAPO

RE, SG (SIN)


MIAMI FL, US (MIA)

BEIJING, CN (PEK)

DOHA, Q

A (DOH)

LONDON, G

B (LHR)

GUANGZHOU, CN (CAN)

AMSTERDAM, N

L (AMS)

CHICAGO IL, US (ORD

)Cargo

Traffic (

×10 6ton/year)

Crago Traffic on Major Airport

2010 2017

Source:ACI, IATA (*1) Some date for 2010 has not been obtained.

0.0

0.2

0.4

0.6

0.8

1.0

ATLANTA GA, US (ATL)

CHICAGO IL, US (ORD)


DALLAS/FORT W

ORTH TX, US (D

FW)

BEIJING, CN (PEK)

DENVER CO, US (DEN)

CHARLO

TTE NC, U

S (CLT)

LAS VEG

AS NV, U

S (LAS)

AMSTERDAM, NL (AMS)

SHANGHAI, CN

(PV

G) (*1)

PARIS, FR (CD

G)

LONDON, G

B (LH

R)

FRANKFURT, DE (FRA)

TORONTO ON, CA (YYZ)

GUANGZHOU, CN (CAN) (*1)

ISTANBUL, TR (IST) (*1)

SAN FRANCISCO CA, U

S (SFO

)

TOKYO, JP (HND)

HOUSTON TX, U

S (IAH)

MEXICO CITY, M

X (MEX)Landing and takeoff (

×10 6/year)

Traffic Movements on Major Airport

2010 2017

Source:ACI, IATA (*1) Some data for 2010 has not been obtained.


69

6.3 World Population

The growing middle class (latent/new customers)

In emerging countries, including those in Asia, driven by high economic growth rates, the

population of the middle-class (annual household disposable income range between US$5,000 and

US$35,000) has been growing rapidly. During the ten-year period from 2000 to 2010, the

middle-class population increased at an average annual rate of 13.3%, reaching 2.1 billion. By 2020,

the figure is expected to reach 3.1 billion.

According to population estimates for 2019 by the United Nations, the world population will rise

to 8.64 billion in 2030, then 9.4 billion in 2040, up from 7.71 billion in 2019. It is estimated that the

population in developing countries (including emerging countries and China) will grow from 6.44

billion in 2019 to 8.1 billion in 2040 (excluding China, 4.98 billion and 6.6 billion respectively).

According to World Bank data, the upper middle group (which has GNI per person from

US$4,000 to less than US$12,000), which numbered 2.64 billion globally in 2019, will reach 2.87

billion by 2040. The average rate of increase is 0.41%. Similarly, the population of high-income

countries (developed countries) is expected to grow from 1.26 billion in 2019 to 1.34 billion in 2040,

with an average growth rate of 0.30%. On the other hand, looking at the lower-middle-income group

(US$1,000 to less than US$4,000), the population will grow from 3.06 billion to 3.97 billion. The

average rate of growth is relatively high at 1.26%, and the population approaching the sum of

high-income countries and upper-middle-income countries in 2040.

High-income countries (developed countries) and upper-middle-income countries have stable fare

burdens for air passenger transportation, and these countries currently account for half of the world's

population. Yet, their population growth rate is already at or near the level of developed countries

level, at just 0.3 to 0.4%/year, so the contribution of population growth to growth of air

2.28 2.69 3.06 3.49 3.97

2.29 2.47

2.64 2.76

2.87

0

1

2

3

4

5

6

7

8

2000 2010 2019 2030 2040

Trend of Middle Class Population on Emerging Countries

Lower Middle (US$1K‐4K）Upper Middle (US$4K‐12K）

Source : UN World Population Prospects 2019

Middle Class Population (Billion)


70

transportation demand is limited to that extent. On the other hand, the lower middle class countries

has a high rate of growth and rapid population growth. Relatively high-income groups may become a

new consumer group for air passenger transportation depending on the population and growth rate.

Currently, India is in this state, as its GDP per capita is still low at about US$1,900 (2019), but due

to its large population (approximately 1.8 billion people in 2019), demand is growing mainly on

short-range routes, and demand for airplanes is also growing. It is expected that the market for

airlines and aircraft will grow if the supply and demand are balanced in a way that is commensurate

with ability to bear the fare burden. However, as a result of competition between airlines seeking

market share while the market has insufficient ability to bear fare burden, the industry became very

busy without turning a profit. In 2019, Jet Airways, the second largest in India, was forced to

liquidate. Due to the suspension of operations by Jet Airways, surviving competitors increased their

share and halted price competition temporally, but it is also said that price competition is bound to

restart, and attention will focus on whether the Indian airline industry can enter a stable growth

trajectory.

0

1,000

2,000

3,000

4,000

5,000

2019 2030 2040

×10 6 Population by Income Class

Lower MiddleIncome

Upper MiddleIncome

DevelopedCountries

Lower Income

Source : UN, IBRD

1,271 1,285 1,288

4,230 4,541 4,743

1,308 1,652

2,036 648

702 739

257

298

332

0

2,000

4,000

6,000

8,000

10,000

2019 2029 2039

Pop

ulat

ion

(mill

ion)

Forecast of World Population (Middle Scenario)

7,713 8,478

9,139 Middle EastLatin America

Africa

Asia/Pacific

World0.92% p.a.

EmergingCountries1.09% p.a.

DevelopedCountries *0.07% p.a.

Source ：UN World Population Prospects : The 2019 Revision

* Developed countries consists of North America, Europe, Japan, Australia and New Zealand.


71

Urbanization and population concentration

Globally, urbanization is making progress along with economic and population growth. The ratio

of urban population to the world population was 29.6% in 1950, but this ratio reached 56.2% in 2020

and is expected to continue increasing, and reach 59.8% in 2030.

The excellent hub-and-spoke business model has been used for a long time in conventional air

transportation. It is a model in which large passenger aircraft are used for large-scale transportation

between large airports while collecting passengers using small passenger aircraft between a small

airport installed in a small city and the nearest large airport. It was premised that the number of

passengers at the small airport would not be large.

If urbanization progresses worldwide and there is a greater number of large cities, it is expected to

become possible to secure enough passengers for each destination in each metropolitan area. In that

case, it will be possible to operate direct flight between big cities without collecting or transferring

passengers. This demands long-range airplanes, suitable for international flights, and with a medium

number of seats to keep load factor high according to the number of passengers traveling between

cities.

0%

10%

20%

30%

40%

50%

60%

70%

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Urban Ratio of World Population

Source ： UN

0

1,000

2,000

3,000

4,000

5,000

6,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Urban

Population （

×10

6）

Urban Population by City Size

10 million or more

5 to 10 million

1 to 5 million

500,000 to 1 million

300,000 to 500,000

Fewer than 300,000

Source ：UN World Urbanization Prospects : The 2018 Revision


72

6.4 Competition

High speed rail

For air transportation, conventional rail is an important partner for collecting and distributing

passengers around the airports, but high-speed rail also poses competition as a means of

transportation on short-range routes. Since the operating speed of aircraft is almost three times faster

than that of high-speed railways, and the advantage becomes clearer on long-haul routes,

competition between the two mainly occurs on short-haul routes.

These high-speed rail routes connect major cities with a large population, carries many passengers,

and being used also for business travel. The passenger demand are important for airlines as well.

Railroads can provide direct access between city centers, are more punctual and less influenced by

weather, do not require passengers to set aside time for security checks like in airports, have more

spacious seats, can offer meals even if passengers do not use first-class cars, and have no restriction

on the use of mobile phones and the Internet. As such, many people feel trains are safer, surer, and

more comfortable than airplanes, so they choose to use high-speed rail.

Competition is especially fierce on routes where it takes one to two hours to complete travel by

airplane, and it is said that a high-speed railway has the advantage on routes which can be completed

within about four hours by high speed rail. In recent years, new high-speed railway construction

projects are underway in Brazil, India, the United States, and Indonesia among others. In addition,

from the perspective of reducing CO2 emissions, a modal shift has emerged in not only high-speed

railways for passengers, but also freight transportation, by switching from air transportation to rail

transportation.

0

200

400

600

800

1000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Traffic ( ×

10 9passenger km

)

High Speed Rail Traffic Worldwide

ChinaJapanKoreaTaiwanFranceGermanySpainItalyOthers

Source ： UIC （ Union Internationale des Chemins de fer : International Union of Railways ）


73

On the other hand, construction and maintenance of railway lines takes a tremendous cost of funds

and time, which must be collected long-term. Therefore, long-term demand forecasting and

management judgment are required to execute railway plans. In contrast, air routes can be opened

just by developing airfields, the cost and time required to start operations is relatively small, making

entry easier, so air transportation sometimes develops first in countries where infrastructure such as

railways is undeveloped.

Ocean freight

The advantage of air freight lies in its uniquely high speed, and it can transport freight over a long

distance in a short time. However, it is not suitable for transporting large or heavy objects, and the

freight cost is higher than other transportation modes. As such, air freight is limited to lightweight

and expensive items such as electronic parts, perishables, and popular products which can bear high

freight charges.

Yet, most of the goods that support society and daily life are transported by rail and ship. Both

means of transportation can carry heavy weight and large volume goods, and are well suited to

transporting large quantities of goods at low cost.

Because of this, ordinary long-distance freight is normally reliant on low-priced ocean freight, but

if demand overflows from ocean freight for some reason, it will inflow to air freight. While there are

circumstantial factors such as a booming economy, emergency situations, and inventory preparation

during economic recoveries, the volume of cargo handled by ocean freight is much larger than that

of air freight. As such, even if there is only a partial inflow, the volume of air freight will change

significantly, having a similarly large effect on the busyness of the business.

Tele-communication system, virtual reality

Many people travel to meet relatives in remote areas and take business trips for communication.

Airplanes support this demand with high-speed transportation, and someone have the opinion that

SST will support even higher speeds and shorter times.

In the age of the Internet, recent years have brought the development of high-capacity and

high-speed electronic communication. Video calls, which were once a thing of the future, can now

be done from PCs at home, and tele-communication systems for corporate use offer incredible

realism. With a tele-communication system, it takes less time and cost than transportation even when

used in remote areas, and the more urgent the matter at hand, the greater the benefit of instant

connection. Furthermore, while pursuing CO2 emission control as a measure against global warming

in recent years, a video conferencing system that does not involve the movement of a physical entity

also emits a small amount of CO2, which makes sense.

Although there is a strong argument for benefit to personal communication of actually meeting

and shaking hands with the other party, if “telework” is promoted and becomes popular as a


74

counter-measure against the COVID-19, the communication through tele-communication devices

would be highly evaluated. In this way, it is possible that the tele-communication will replace some

of the purpose of air transportation in the future. Similarly, some airlines and travel companies are

examining ways to virtually realize the “local experiences” of travel destinations, using virtual

avatars.


75

7. Freighter Airplane Demand Forecast

7.1 Fleet Analysis

Number of aircraft in operation

The number of jet freighters being operated by airlines around the world gradually decreased from

1,743 in 2009 to 1,673 in 2013, but afterwards the number began to increase until it reached 2,023 in

2019. In 2019, this consisted of 748 narrowbody aircraft, 649 medium widebody aircraft, and 626

large aircraft.

Regarding the share of freighters by size, the share of large aircraft trended upwards from 2009 to

2013, but after 2013, the share of large aircraft decreased and the share of both medium widebody

aircraft and narrowbody aircraft increased.

Converted Freighter

Historically, many freighters converted from passenger aircraft have been used in the jet freighter

market. In 2019, 48% of in-service jet freighter were passenger-to-freighter conversions. These

conversions occur after the aircraft are over 10 years of age, with most conversions taking place

when the aircraft are between 15 to 20 years of age.

1,743

2,023

0

500

1,000

1,500

2,000

2,500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Narrowbody MediumWidebody Large Total

Trends of Jet Freighter in Service

747, 777MD‐11, DC‐10‐30/40An‐124

A300, A310, A330,767, Il‐76

707, 757, DC-8727, 737, DC-9, CRJ

No

. of

Air

craf

t 562(32%)

547(31%)

634(36%)

626(31%)

649(32%)

748(37%)

594(36%)

507(30%)

572(34%)

1,673


76

The average service life for a converted freighter following conversion has changed every year, but

the average service life following conversion for aircraft retired in 2019 was 18.4 years, and the

average age from the time of manufacture was 37.0.

865 (50%)

981 (48%)

878 (50%)

1,042 (52%)

1,7431,673

2,023

0

500

1,000

1,500

2,000

2,500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

New Freighter

Converted Freighter

Total

Trends in the New and Converted Jet Freighter

No

. o

f A

ircr

aft

889(53%)

784(47%)


77

Looking at the delivery record of new and converted freighters since 1999, there have been no new,

Western-made, narrowbody freighters, other than the 757 freighter manufactured in the 1990s. For this

reason, there is a relatively stable demand for converted aircraft in the narrowbody freighter market.

In particular, a large number of 737-300/400 and 757 passenger aircraft have been converted.

As for widebody aircraft, many aircraft such as the A300/A310 and DC-10 in the 1990s and the 747,

767 and MD-11 in the 2000s were converted into freighters. Since 2008, due to sluggish demand for

air cargo and soaring fuel costs, there was a significant reduction in the number of converted Trijets

and Quadjets(4 engines-jets). Moreover, orders for new aircraft such as the 767F, 777F and 747-8F

have been increasing over the past few years due to various factors such as a shortage of used 767 and

A300 aircraft that are retired from passenger service and suitable for conversion, the short amount of

time that has passed since the A330 converted freighter was introduced in 2018, and the launch of the

777 converted freighter in October 2019, as well as the longer service life and lower maintenance costs

associated with new aircraft.

Trend of payload capacity

In the past ten years, many 707F, 727F, 737-200F, 747-100F/200F/300F, DC-8F and DC-9F have

been retired, and many A300-600, MD-11, 747-400, 757 and 767 passenger jets have been converted

and delivered into the freighter market. Additionally, new A330-200F, 767F, 777F and 747-8F

freighters have also been delivered.

The average payload capacity per jet freighter had decreased to 59.7 tons in 2018 due to an increase

in the number of narrowbody and medium widebody airpcraft since 2016, but this increased to 60.2

tons due to the delivery of 32 new 777F and 747-8F large aircraft in 2019.

0

20

40

60

80

100

120

140

160

1999 2004 2009 2014 2019

Delivery Trends for New and Converted Jet Freighters

Converted Narrowbody Aircraft

Converted Widebody Aircraft

Newly Manufactured Widebody Aircraft

Newly Manufactured Narrowbody Aircraft

No

. of

Air

craf

t


78

58.3

59.9

61.5 61.9 61.8 61.2 61.6 61.7

60.7

59.7 60.2

50

55

60

65

70

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Trends in Jet Freighter Average Payload Capacity

Avera

ge P

ayl

oad

Cap

acit

y p

er

Air

pla

ne (

ton

)


79

Retirement

Because many jet freighters are converted from passenger aircraft, and the annual flight time of each

freighter may be shorter than that of passenger aircraft, the average service life over the past 10 years

has been 30 years of age or more.

Since 2010, due to rising fuel costs and demands for cost reduction, the retirement of aging, fuel-

inefficient aircraft, especially those 35-years of age or older, with high maintenance costs, has

accelerated. Meanwhile, some relatively younger jet freighters whose service life is under 30 years

have recently been retired partly because of the emergence of high-fuel-efficiency jet freighters such

as the 777F.

In 2008, 88 jet freighters were retired and their average service life were 37.4 years. The number of

jet freighters retired in 2013 increased to 95, resulting in a shorter average service life of 34.5 years.

The average retirement age increased to 36.2 years old when 40 aircraft were retired in 2019. The

number of retired aircraft has fluctuated with trends in freight demand.

32.233.5 34.1 33.8

34.8 35.537.4 37.8 37.8 37.4

34.9

37.836.8

34.1 34.5 35.0 35.0

31.633.5

32.6

36.2

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Trends in Jet Freighter Retirement Age

Source: Cirium

Average

Retirement Age


80

7.2 Jet Freighter Demand Forecast

Over the period between 1999 and 2019, freighter cargo traffic in terms of RTK increased at an

average annual rate of 2.6%. Following increasing demand for e-commerce, etc., the freighter RTK

from 2020 to 2039 will increase at average rate of 3.7% per annum, and is expected to increase from

104.4 billion ton kilometers in 2019 to 217.3 billion ton kilometers in 2039, which is an increase of

about 210%. However, the share of transported goods decreased from 52% in 1999 to 41% in 2019.

This is thought to be because airlines gave priority to freight transportation in the lower holds of

passenger aircraft, but it is expected to increase to 43% in 2039.

When we compare 2008 to 2018, it is clear that major airlines with significant cargo traffic have

different strategies. The RTK of Emirates, Qatar and Cathay Pacific Airlines are increasing, while that

of Singapore, Lufthansa and Korean Air are decreasing.

During this period, the overall RTK of lower hold cargo for major airlines with significant cargo

traffic either remained flat or increased slightly while the RTK of freighters decreased. This indicates

that air cargo transportation has been shifting from transportation by freighters to the lower holds in

passenger aircraft. Meanwhile, Emirates is greatly increasing their cargo traffic through the

deployment of a large number of widebody passenger aircraft with extensive lower-hold cargo spaces.

In the future, due to the increasing number of widebody passenger aircraft with spacious lower-hold

cargo areas, such as the 777-300ER, and expanded use of the lower-hold cargo of passenger aircraft

by airlines seeking to secure revenue unrelated to passengers, cargo traffic carried in the lower-holds

of passenger aircraft will increase.

0

100

200

300

400

500

600

700

1999 2019 2039

RT

K (

bil

lion

to

n k

ilom

ete

rs)

Freighter(41%)

Freighter(43%)

Passenger Aircraft(57%)

Passenger Aircraft (59%)

Freighter(52%)

Passenger Aircraft(48%)

3.7％p.a.

3.3％p.a.

4.7%p.a.

2.6％p.a.

Trends of Passenger Aircraft Lower Hold and Freighter RTK share of Total Demand


81

At the same time, companies dedicated to international cargo shipping services, such as FedEx, DHL,

TNT and UPS, have been increasing the number of freighters in their fleets in response to increased

global demand related to e-commerce, and cargo airlines such as Atlas Air, Cargolux and Air Bridge

Cargo, have also introduced a large number of large freighters. It is therefore conceivable that the

share of freighter transport will continue to gradually increase.

175.1

151.9

117.1

84.9

130.7

61.6

80.9

90.0

77.2

84.7

129.2

16.7

66.2

75.9

0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 200.0

2018

2008

2018

2008

2018

2008

2018

2008

2018

2008

2018

2008

2018

2008

FedEx

Cathay

Pacific

Emirates

Korean

Air

Lufthan

saQatar

Singapore

Freigher

Lower Hold of PassengerAirplanes

TrendinCargoTrafficforMajorAirlines

2018

2018

2018

2018

2018

2018

2018

Source：IATA RTK (billion ton kilometer)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2019 2039

No.

of A

ircr

aft

Jet Freightrt Fleet Developments Forecast

2,023

2,896

2,417

479 Retained

873 Growth

36%

1,544 Replacement

64%

New Deliveries


82

The number of jet freighters operated by airlines is forecast to increase from 2,023 in 2019 to 2,896

in 2039. The breakdown is 479 existing aircraft, 1,544 replacement demand, and 873 new aircraft.

In regards to the number of in-service jet freighters by size and share, in 2019, narrowbody aircraft

made up 37%, medium widebody aircraft 32%, and large aircraft 31%. By 2039, these percentages

are expected to change, with narrowbody aircraft making up 39%, medium widebody 26%, and large

aircraft 35%. Medium widebody aircraft will see a decrease in share, but the number of aircraft will

increase from 649 to 755. During this time period, 1,544 freighters will retire, and only 479 units out

of the freighters in service in 2019 will still be in service in 2039. In the next 20 years, 2,417

freighters are forecast to be delivered.

Deliveries of jet freighters by size will be 1,125 narrowbody, 583 medium widebody, and 709 large

freighters, totaling 2,417 units. Their shares will be 46.5%, 29.7% and 23.7% respectively. Of these,

846 deliveries will be production freighters. The breakdown of production freighters will be 396

medium widebody and 450 large aircraft, which will comprise 56% of the total.

Regarding narrowbody freighters, production freighters will not appear for the time being, the

majority of new demand will be conversions from A320/321, MD80/90, 737 and 757 passenger jets.

There are even a small number freighters converted from regional jets such as CRJ100/200 and

BAe146, so there is a possibility that freighters converted from aircraft such as CRJ700/900 and E-Jet

will appear.

While widebody production freighters, such as the A330-200F, 767-300F, 777F, 747-8F already exist,

we expect to see the freighter version of A330neo, A350, 787 and 777X aircraft in the future. Also

freighters converted from retired A330, 777 and 747-8I passenger aircraft can be expected in the future.

748(37%)

1,127(39%)

649(32%)

755(26%)

626(31%)

1,014(35%)

0%

20%

40%

60%

80%

100%

2019 2039

Narrowbody Medium Widebody Large

Share of Jet Freighter Fleet by Size

2,023 2,896


83

Regionally, over the period from 2019 to 2039, the number of units in service in North America will

increase from 950 units to 1,094 units; the Asia-Pacific region from 366 units to 796 units; Europe

from 300 units to 338 units; the Middle East from 81 units to 216 units; Latin America from 114 units

to 172 units; Africa from 65 units to 120 units; and the CIS from 147 units to 160 units. As a market

for freighters, North America will remain the largest throughout this period. Emerging countries in the

Asia-Pacific region, the Middle East, and Latin America will put more units into service, with the rate

of growth particularly high in the Asia-Pacific region.

The number of new deliveries (production freighters and converted freighters) will be the greatest in

North America with 883 units, followed by the Asia-Pacific region with 698 units, Europe with 269

units, Latin America with 165 units, the Middle East with 163 units, the CIS with 129 units and Africa

with 110 units. In Latin America, Africa, the CIS, and Europe, these will mainly be converted

freighters, but in the Middle East, North America, and the Asia-Pacific region, the ratio of new

freighters will also be relatively high.

Demand for production jet freighters in North America will be 357 units, followed by the Asia-Pacific

region with 223 units, the Middle East with 88 units, Europe with 81 units, and the CIS with 39 units.

North America and the Asia-Pacific region have the largest new freighter markets.

748 649 626

2

172

305

1,125

187

259

396

450

0

200

400

600

800

1,000

1,200

2019 2039 2019 2039 2019 2039

Jet Freighter Forecast by Size Category

Conversion

Production

Retained

NewDelivery

649

755

626

1,014

1,127

748

NarrowbodyMedium

WidebodyLarge

No

. of

Air

craf

t

2019 Year-end:2039 Year-end:2020-2039 New Deliveries:

　　of which, Newly Built

2,417

846

Total2,0232,896


84

Ramp-cargo-door type freighters, which are principally a commercial version of the former Soviet-

era military freighters such as the An-124 and Il-76, are operating in the HOM (Heavy and Oversize

air cargo Market) to transport heavy and oversize cargo. The market share of HOM is very small in

terms of RTK, at only about 0.5% of total air cargo traffic, but that market is expected to grow faster

than average for global air cargo traffic due to growing demand in the aerospace, precision machinery

and the mining industries, as well as humanitarian operations and disaster relief. As no replacements

for current freighters such as the An-124, An-225 and Il-76 exist at the moment, and they operate

infrequently, these airplanes are expected to be in service over the forecast period.

950

300366

65 81 114 147211

69 9810

537 31

526

188

475

8975

128 90

357

81

223

21

88 37 39

0

200

400

600

800

1,000

1,200

2019 2039 2019 2039 2019 2039 2019 2039 2019 2039 2019 2039 2019 2039

Europe Asia-Pacific Africa Middle East

Latin America

172

114

216

81120

65

796

366338

300

1094

950

160147

CIS

Jet Freighter Forecast by Region

NewDelivery

Production

Conversion

Retained

NorthAmerica

2019 Year-end:2039 Year-end:2020-2039 New Deliveries:

　　of which, Newly Built

2,417

846

Total2,0232,896

No

. of

Air

craf

t


85

8. Air Cargo Demand Forecast

8.1 Air Cargo Market

Air Cargo Traffic

Global air cargo traffic, in terms of RTK, grew at an average rate of 3.7% per annum during the 20-

year period from 2000 to 2019. Compared to the passenger airline business, the cargo business is more

susceptible to economic fluctuations, and in ten years between 2000-2009, due in part to the effects of

the U.S. financial crisis in 2008-2009 and credit concerns in Europe, its average growth rate was 2.1%

per annum. The average annual growth rate recovered and increased to 5.3% between 2010-2018.

In 2019, the global economic growth rate stagnated at 2.4% due to factors that lead to weaker trade

and investment, such as the ongoing US-China trade war, the UK's decision to leave the EU, and the

dramatic slowdown in China's growth rate. Air cargo traffic decreased by 3.3%. According to the

World Bank (as of December 2019), the global economic growth rate in 2020 is expected to be

slightly higher than the previous year's level at 2.5%, but there are still many downside risk factors,

such as the re-emergence of trade tensions, and major economic deterioration and financial

instability due to the quickly worsening situation in developed countries due to the COVID-19

pandemic.

As of December 2019, IHS (Global Insight) predicted that the global real GDP growth rate would

be 3.18% in 2018, 2.58% in 2019, and 2.51% in 2020, but there will still be the downside risk posed

by the COVID-19 pandemic.


86

Meanwhile, the global air cargo traffic growth rate for 2019, published by the IATA (International

Air Transport Association) in December 2019, was minus 3.3% year-on-year in terms of RTK. This is

the sharpest decline since the 2009 global financial crisis, and the first negative rate since 2012. IATA

explained that the reason for the slump in the air freight market was that global trade was declining

due to trade disputes such as the tariff negotiations between the United States and China, and growing

concern over a global recession.

For the time being, the world economy continues to slow. The real GDP growth rate peaked at

+3.2% year-on-year at the end of 2017, slowed to +2.5% at the end of 2019, and is below the

potential growth rate of around +3.0%. Although the unemployment rate in developed countries has

been at its lowest level since 1980, the slowing growth of the Chinese economy has become

noticeable, and there is uncertainty about the economies of emerging countries as well as those in

Europe. In addition to US-China trade friction, there are also political risks, and the risk of conflict

and terrorism in the Middle East and Europe. Additionally, there are downside risks related to

China's interference with Hong Kong and the COVID-19 pandemic.

Air cargo growth in 2019 declined in all regions, except for airlines in Africa, which grew at 7.4%

year-on-year, and in which investment from Asia was remarkable. Airlines in the Asia-Pacific region,

where the world's manufacturing industries are concentrated, decreased by 5.7% year-on-year due to

the effects of international trade tensions and global growth slowdown, while airlines in North America,

-15

-10

-5

0

5

10

15

20

25

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Trends in Passenger RPK / Cargo RTK / World Economics

Passenger RPK

Cargo RTK

World Economics

Actual Forecast

Gro

wth

Rat

e (%

)

Source: IATA

9.7%

-3.3%


87

where the domestic economy was robust, also decreased by 1.5% due to the impact of international

trade tensions. Airlines in the Middle East, which connect Asia and Europe, decreased by 4.8%,

airlines in a Europe, struggling with Brexit, decreased by 1.8%, and airlines in the Latin American

region, which is experiencing significant social unrest and financial difficulties, were down 0.4%.

Cargo Load Factor

The systemwide cargo load factor, when viewed as a combination of transportation by freighters and

transportation in the lower holds of passenger aircraft decreased from 48.9% in 1999 to 46.6% in 2019,

fluctuating within ±5% of 50％, according to demand.

The freighter load factor decreased slightly to 62.8% in 2019, after increasing from 64.6% in 1999

to 69.8% in 2010. This appears to have happened due to the fact that even though airlines introduced

freighters to expand their transportation capacity in anticipation of increased air freight demand,

freight transportation demand declined due to global trade conflicts, slowing economic growth over

the last few years, and increased cargo volume in the lower holds of passenger aircraft.

Freighter flights handle customer needs that cannot be accommodated in the lower holds of passenger

aircraft, such as the ability to carry large cargo that cannot be stored in the lower holds of passenger

aircraft and coordinating departure times that are convenient for freight collection.

Continuing freighter flights will enable the airlines to reduce the number of aircraft and increase the

load factor to improve efficiency. The load factor, which has fallen sharply in the last two years, is

expected to gradually recover to the conventional average value of around 65%.

-1.3%

1.7%

3.2%

5.8%

3.9%

6.8%

3.5%

7.4%

-5.7%

-1.8%

-0.4%

-4.8%

-1.5%

-3.3%

-10% -5% 0% 5% 10%

Africa

Asia-Pacific

Europe

Latin America

Middle East

North America

Global Total 2019

2018

Global FTK Growth by Region (% year-on-year)

Freight‐Tonne‐Kilometers(% year‐on‐year)Source: IATA


88

The lower holds cargo load factor, of passenger aircraft, increased from 38.8% in 1999 to 39.5% in

2019, fluctuating between 30-40% according to demand. Cargo transport in the lower holds of

passenger aircraft is a by-product of passenger transportation, increasing airline revenues and enabling

the creation of direct freight flights.

In addition to the expansion of LCC's in the freight business, reduction in the size and weight of

transported products, and an increase in the number of widebody passenger planes with a large cargo

capacity, such as the 777-300ER, we predict that the passenger aircraft lower holds cargo factor will

gradually increase as airlines prioritize that type of freight transport as a measure to reduce greenhouse

gases.

Cargo yield

The real global cargo yield, an indicator of cargo revenue, decreased by an annual average of 1.4%

in the 40-year period from 1980 to 2019, and it decreased by an annual average of 2.2% in the 20-year

period from 1999 to 2018. From 1985 to 1998, the real cargo yield showed a significant decline due

to deregulation and the entry of international courier companies into the general air cargo arena.

Soaring fuel prices caused a sharp increase in 2004-2005, but afterwards, the yield started again on a

downward trend.

As international trade expands due to globalization of the world economy, air freight business is

facing pressure to lower freight rates due to competition with other modes of transportation and

corporate logistics cost reductions. It is conceivable that the yield will modestly decrease going

forward.

0%

20%

40%

60%

80%

1999 2004 2009 2014 2019 2024 2029 2034 2039

Lo

ad

Fa

cto

r(％

)

Cargo Load Factor Forecast

Freighter

Overall System

Lower Holds

Actual Forecast

End of Calendar Year


89

8.2 Air Cargo Traffic Forecast

Global air cargo traffic, in terms of RTK, will grow at an average rate of 3.5% per annum from

2020 to 2039, increasing 2.0 times, from 253.2 billion ton kilometers in 2019 to 502.6 billion ton

kilometers in 2039. The real cargo yield during this period is estimated to decrease at an average rate

of 0.3% per annum.

10

20

30

40

50

60

70

80

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Rea

l Car

go

Yie

ld

Real Cargo Yield

Actual Forecast

1980-2019 2020-2039-1.4% -0.3%

Annual Average Growth Rate

0

100

200

300

400

500

600

1999 2004 2009 2014 2019 2024 2029 2034 2039

Global Air Cargo Demand ForecastAir Cargo TrafficBillion RTKs

ForecastActual

3.5%3.7%

2.1 times

2.0 times

p.a p.a


90

Routes in the Asia-Pacific region constitute the largest market, and the average annual growth rate is

expected to be 4.8%. The routes with 39.1 billion ton kilometers in 2019 will grow to 99.2 billion ton

kilometers in 2039. The growth rate may be higher than the global average (3.5%), so the share will

be 19.7%. In the Asia-Pacific region, which has the highest population globally, the capacity of truck

shipping and other forms of overland transportation will increase significantly along with progress in

the development of land transport infrastructure. However, air shipping will also increase significantly

at the same time due to increasing production and trade between countries separated by oceans. These

routes are expected to be the largest market over the next 20 years.

Routes between the Asia-Pacific region and North America will show an average annual growth rate

of 3.4%, growing from 49.6 billion ton kilometers in 2019 to 97.4 billion ton kilometers in 2039,

which will constitute a 19.4% share.

Routes between the Asia-Pacific region and Europe will show an average annual growth rate of 3.6%,

growing from 44.5 billion ton kilometers in 2019 to 90.0 billion ton kilometers in 2039, which will

constitute a 17.9% share.

Routes between the Asia-Pacific region and the Middle East will show an average annual growth rate

of 6.2%, growing from 13.5 billion ton kilometers in 2019 to 45.0 billion ton kilometers in 2039,

which will constitute a 9.0% share.

Routes between Europe and the Middle East will show an average annual growth rate of 3.2%,

growing from 11.9 billion ton kilometers in 2019 to 22.5 billion ton kilometers in 2039, which will

constitute a 4.5% share. These routes will also absorb the routes to Africa and Latin America via the

Middle East.


91

Comparing growth rates, the Asia/Pacific-Middle East route is expected to grow at 6.2%, the Africa-

Middle East route at 5.9%, the intra Asia/Pacific routes at 4.8%, and the intra Middle East routes at

4.5%. It can be gathered that freight will be transported east-west or north-south via the Middle East.

In general, we can expect significant growth in routes within and between emerging countries such

as the Middle East and Asia/Pacific, with the Middle East and Asia/Pacific routes becoming the main

of growth. Europe-North America, which is a mature market, will have a low growth rate of around

2%.

0 20 40 60 80 100 120

Intra Africa

Intra Latin America

Intra Middle East

Africa - Asia Pacific

Africa - Middle East

Africa - Europe

Intra Europe

Europe - Latin America

Latin America - North America

Europe - Middle East

Intra North America

Europe - North America

Asia Pacific - Middle East

Asia Pacific - Europe

Asia Pacific - North America

Intra Asia Pacific

RTK (billion ton kilometers)

Global Air Cargo Traffic Forecast by Route

Actual Traffic 2019

Added Traffic 2020-2039

4.8%

6.2%

3.6%

3.4%

3.2%

0.7%

2.1%

2.7%

3.5%

2.3%

4.2%

2.8%

4.5%

5.9%

1.8%

3.4%


92

By region, Asia/Pacific airlines have the highest air traffic volume, reflecting 87.2 billion ton

kilometers in 2019, increasing by a factor of 2.5 to reach 188.7 billion ton kilometers in 2039. Airlines

in North America will grow from 61.4 billion ton kilometers to 102.0 billion ton kilometers. Airlines

in Europe will grow from 51.6 billion ton kilometers to 93.0 billion ton kilometers, and Airlines in the

Middle East will exploit their geographic superiority to grow by 2.6 times, from 33.2 billion ton

kilometers to 81.8 billion ton kilometers.

0.7%

1.8%

2.1%

2.3%

2.7%

2.8%

3.2%

3.4%

3.4%

3.5%

3.5%

3.6%

4.2%

4.5%

4.8%

5.9%

6.2%

0% 1% 2% 3% 4% 5% 6% 7%

Intra North America

Intra Latin America

Europe ‐ North America

Intra Europe

Africa ‐ Europe

Africa ‐ Asia Pacific

Europe ‐ Middle East

Asia Pacific ‐ North America

Intra Africa

Global

Europe ‐ Latin America

Asia Pacific ‐ Europe

Latin America ‐ North America

Intra Middle East

Intra Asia Pacific

Africa ‐ Middle East

Asia Pacific ‐ Middle East

Annual RTK Growth Rate

Global Air Cargo Traffic Growth 2020 - 2039


93

The growth rate of airlines in North America and Europe, which already have mature markets, will

be 2.6% and 3.0% respectively, which are below the global average (3.5%). North America’s share of

the global market will decrease from 24% to 20% and Europe’s share will decrease from 20% to 14%.

The Asia-Pacific region, the world's largest market, is expected to grow at a rate of 3.9%, and its share

will expand from 35% to 38%.

The Middle East will see the highest growth rate of 4.9%. Africa and the CIS, though their share are

small, will see long-term growth rates of 3.8% and 3.9%, respectively, due to their high economic

growth potentials.

Over the next twenty years, air cargo growth will be driven by emerging countries in the Asia-Pacific

region, the Middle East and Africa

0.0 50.0 100.0 150.0 200.0

Asia-Pacific

North America

Europe

Middle East

CIS

Latin America

Africa

Global Air Cargo Traffic Forecast by Region

Actual Traffic 2019Added Traffic 2020-2039

3.9%

2.6%

4.6%

3.0%

3.7%

3.8%

2.0%

RTK (billion ton kilometers)


94

3.7%

9.0%

3.6%

11.7%

2.6%

1.5%

12.9%

2.5%

3.5%3.8% 3.9% 3.7%

3.0%

2.0%

4.6%

2.6%

0%

2%

4%

6%

8%

10%

12%

14%

Global Africa Asia-Pacific CIS Europe LatinAmerica

Middle East NorthAmerica

An

nu

al

RT

K G

row

th R

ate

Air Cargo Traffic Forecast by Region

2000‐2019

2020‐2039

Air Cargo Traffic Share by Region (RTK Base)

Africa2%

Asia-Pacific38%

CIS3%

Europe19%

Latin America2%

Middle East16%

North America20%

2039 RTK ShareAfrica

2%

Asia-Pacific35%

CIS3%

Europe20%Latin America

3%

Middle East13%

North America24%

2019 RTK Share

253 ×10⁹ ton kilometers 503 ×10⁹ ton kilometers

Scale will increase by 2.0 times


95

9. Regional Overview

For the past 20 years (from 2000 to 2019), global GDP has grown at an average rate of 3.0%

per year, passenger traffic at 5.1%, and cargo traffic at 3.7%. In the meantime, airline

liberalization has progressed around the world, many state-owned airlines have become

privatized, and many LCCs have entered the market. Airlines have been shifting their business

strategy from forming individual networks on their own, to forming networks by putting

together a group of airlines called “alliances.” Previously, airlines from the U.S. and Western

Europe drove the growth of the airline industry. In recent years, however, airlines from the

Asia-Pacific region and the Middle East have experienced tremendous growth. In this way,

airline business models and network strategies have been changing with the times; and the

airlines and the regions experiencing growth have changed as well.

In addition, requirements for airplanes vary depending on the region. Airlines in the Middle

East, because of their regional requirements, have been demanding wide body jets that can fly

long distances, while airlines in Europe have been using widebody jets with a range of 12,000

km or less. In North America, narrow body jets are operated on all routes ranging from Regional

Range to Trans-continental hauls. Many LCCs that have experienced remarkable expansion also

use narrow body jets. Circumstances characterizing airlines differ depending on business

models and regions to which these airlines belong, and their demand for airplanes also differs.

Passenger demand, cargo demand, and airplane demand shown here by region are the sum of

the demand for passengers and cargo transported, as well as number of airplanes in service and

airplanes delivered to airlines belonging to that region. Every country is contained in its region

geographically, and every airline belongs to the region through the country where its head office

is located and where it is registered as a corporation.

Europe

Africa Latin America

N. America

CIS

Asia-Pacific Middle East

(In the following description, “Regional Range” means less than 1,000 km, “Short Range” means 1,000

to 2,000 km, “Medium Range” means 2,000 to 4,500 km, and “Long Range” means over 4,500 km).


96

9.0 Regional Economic Characteristics

The graph below shows the economic character, trends in population and real per capita GDP

from 20 years in the past to 20 years in the future (1996-2018/2018-2040), for each region

covered in this report. The horizontal axis shows the real GDP per capita of the region, and the

vertical axis shows the population. Also, the hyperbola (5, 10, 20, 40 × 1012 USD) shows the

product of both (per capita GDP × population = GDP).

・In North America (NA), per capita GDP has grown rapidly in the past and will continue to do

so in the future, while the population will increase only slightly. Air cargo demand will

increase due to further economic growth rather than population growth, and this will be

according to the slow-growth model seen in developed countries.

・Western Europe (WE), Japan (JA), and Oceania (OC), are similar to NA in that per capita GDP

continues to grow despite stagnant (or decreasing) population growth.

・China’s (CH) rapid population growth has been impressive, but it will have reached its peak by

around 2030. Afterwards, as it begins to undergo a gradual decline, it will be faced with a

rapidly aging population. The increasing burden of support will also slow down economic

growth. Meanwhile, GDP, supported by the size of the population, will grow to a level

comparable to NA around 2040. Per capita GDP still falls short of the West, but will exceed

$20,000 during the forecast period (2020-2039). As a result, the RPK is expected to transition

from the rapid growth model of developing countries to the slow growth model early in the

forecasting period.

・Increase in per capita economic power in South Asia (SW, India, etc.) is slow, and the region is

still characterized by rapid population growth. Africa (AF), even more than SW, is also

characterized by slow per capita economic power and rapid population growth.

・In addition, the Middle East (ME) and Latin America (LA) will soon reach a per capita GDP of

$10,000. Eastern Europe (EE) is currently around $13,000.

0.0

0.4

0.8

1.2

1.6

2.0

2.4

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Regional Population (billions)

GDP (real) per Capita (2015USD)

Population 〜 GDP(real) per Capita

( 1996‐2018(〇) / 2018‐2040(×) )

NA

EE

CI

SW

AF

SE LA

ME

NE

CH

JA

WE

OC

GDP 40E12

20E1210E12

5E12Source : IHS


97

9.1 North America

Azimuthal Equidistant Projection

Center : New York

Equidistant Circles increments : 5,000km


Center : Los Angeles



98

Under the leadership of President Trump, the U.S. economic environment has been a mix of

optimistic expectations and confusion surrounding new economic, and trade and tariff policies

that emphasize job security, as well as new immigration and border control policies. In

conjunction with the political trends in Europe, there has also the possibility of changes in the

open globalism experienced up until now.

After that, US-China concerns, which initially began in the form of trade frictions, progressed

into concerns over Huawei, China’s handling of the situation in Hong Kong, Taiwan's

participation in WHO, and suspicion of theft of intellectual property online in the United States.

As the world rebuilds after COVID-19, supply chains may be reorganized, and this may also

affect passenger and air cargo flights.

*******************

Airlines in North America were significantly damaged by the 9/11 terrorist attacks in 2001.

Since then, they have proceeded with the streamlining of their organizations, and mergers with

other companies. As a result, major airlines in the U.S. have been nearly consolidated into three

companies: American Airlines, Delta Air Lines, and United Airlines; and regional airlines also

into three companies: SkyWest Airlines, Republic Airlines, and Trans States Airlines. Currently,

four companies (American Airlines, Delta Air Lines, United Airlines, and Southwest Airlines)

account for nearly 70% of the U.S. domestic market on an RPK basis, and these airlines are

becoming increasingly dominant.

Now, airlines in North America are the most profitable in the world, resulting from the

improved financial situation due to restructuring and precise supply/demand adjustments.

Airlines in North America, responding to soaring fuel prices, took emergency measures to

reduce personnel costs from around 2004 to around 2006, and since 2015, after nearly 10 years

had passed, they were able to bring their distribution to personnel costs back up to the previous

level in the wake of lower fuel prices after 2015. Nevertheless, in 2018, their personnel costs

accounted for approximately 45% (approximately 22% in terms of RPK) of net profits earned

by airlines worldwide.

In autumn 2017, the U.S. Department of Commerce made a preliminary decision to impose a

292% tariff on a Bombardier (the current Airbus A220) C series passenger aircraft that was to be

imported to the U.S. While this decision was rejected by the U.S. International Trade

Commission in January, 2018, this controversy at once led to the realization of a partnership

between Bombardier and Airbus, and the C Series aircraft being produced as the Airbus A220 at

an Airbus factory in the U.S. Such an outcome is “an unexpected turn of events,” which may

change the long-term, strategic balance of sales channels.

*******************


99

RPK in the North American market in 2019 was 1,923×109 passenger kilometers, of which

the Long Range (4500km or longer), Medium Range (2000 to 4500km), and Short Range (1000

to 2000km) markets appear to account for 28%, 34%, and 25%, respectively. In addition, the

average growth rates, in terms of RPK, of the above distance ranges over the next 20 years are

expected to be 3.4%, 3.5%, and 3.2%, respectively, and the Medium-range routes in North

America are expected to continue to see the most demand for cargo transport, peaking in 2039.

It should be noted that although 4,500 km is almost the same as the North American

transcontinental haul, regional jets and narrow body airplanes are mostly used up to this

distance in the North American market, and the number of wide body airplanes used is quite

small. The 757, which is a large, narrow body aircraft, has been used for a long time on the

Atlantic route (NY-London ground distance of approximately 5,600 km). The number of wide

body aircraft increases over 5,000 km and they are mainly used up to about 9,000 km. There are

not many aircraft operating at longer distances, but they are used up to about 14,000km.

The largest number of regional jets are used in a Regional Range, mostly around a route

distance of 600 km, and while the number is gradually decreasing corresponding to longer

flights, they are used up to a Short Range (2,000 km or less). Passenger turboprops are used in a

Regional Range, and small airplanes with less than 40 seats are mainly used in a Regional

Range of 600 km or less, mostly around a route haul of 200 to 300 km. Although medium and

large airplanes with 40 seats or more are used in a wide Regional Range up to 1,000 km, they

are mainly used for distances of around 600 km.

In North America, over the past 20-year period from 2000 to 2019, GDP grew at an average

annual rate of 2.1%, passenger demand at 2.7%, and cargo demand at 2.5%. As for the growth

rate forecast for 2020 to 2039, GDP will grow at 1.9%, passenger demand at 3.1% and cargo

LR 3.4%

MR 3.5%

SR 3.2%

RR 1.1%

LR : Long RangeMR : Medium RangeSR : Short RangeRR : Regional Range

2020-2039Ave. Growth Rate

13% 9%

25% 25%

34% 36%

28% 30%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance rangeNorth America

LR

MR

SR

RR


100

demand at 2.6%. The average growth rate of transport demand in the mature North American

market is forecast to be slightly lower than the global average for both passenger and cargo

transport. In addition, 80% of the airplanes to be delivered in the forecast period will be

replacements for existing airplanes.

The number of airplanes in service in the North American market will increase from 8,319 in

2019 to 10,151 in 2039. Over this period, the demand and the sales value (at 2019 list prices)

are expected to be 9,021 units and 1.15 trillion U.S. dollars, respectively. Narrow body aircraft

will account for 66% of all passenger aircraft deliveries (7,664 units).

8,319

1,130

0

7,189

0

1,832

0

2,000

4,000

6,000

8,000

10,000

12,000

2019 2039

No

. of

Air

pla

nes

Fleet Developments of Airlines in North America

Replacement

Growth

Retained

New Deliveriesｄｆ

9,021

10,151

80%

20%

North America New Deliveries New Deliveries

2019 2039 2020-2039 2019 2039 2020-2039

Passenger Turboprops (TP) Jet Freighters (JF : New + Converted) 15-39 seats 401 296 279 Narrowbody 273 319 319 40-59 seats 109 63 54 Medium Widebody 400 472 350 60 seats and larger 162 228 141 Large 277 303 214 (Total) TP 672 587 474 (Total) JF 950 1,094 883

Passenger Jets (JP) (Grand total) TP + JP + JF 8,319 10,151 9,021 20-59 seats 759 2 0

60-99 seats 1,239 1,511 1,311 (subtotal) Regional Jets (RJ) 1,998 1,513 1,311 Growth Indices (2020-2039)

100-119 seats 179 788 754 GDP 1.9 ％

120-169 seats 2,706 2,306 2,033 RPK 3.1 ％

170-229 seats 1,120 2,426 2,256 RTK 2.6 ％

(subtotal) Narrowbody Jets (NJ) 4,005 5,520 5,043 Fleet 1.0 ％

230-309 seats 458 1,023 938 Sales (2019 List Price) 1,145 US$ billion 310-399 seats 231 414 372 400 seats and larger 5 0 0 (subtotal) Widebody Jets (WJ) 694 1,437 1,310 (Total) JP = RJ + NJ + WJ 6,697 8,470 7,664

FleetFleet


101

9.2 Europe

It is difficult to be optimistic about the future of Europe’s politics and economy, due to

changes and confusion in economic relationships expected to take place as a result of the UK’s

decision to leave the EU, anti-EU movements over issues such as terrorism and

immigrants/refugees, and government debt problems of some countries, even though they are

not high-profile. Despite these issues, Europe is one of the three major markets including North

America and China, which shore up global demand for air transport.

Europe, as defined by JADC, includes the countries of Western Europe, Eastern Europe,

Northern Europe, and Turkey. Almost all of them are EU member countries that constitute a

single aviation market, continental in scale, in which the member states have open access to one

another even for respective domestic operations under aviation agreements. Over the past 20

years, passenger demand basically showed a steady growth


Center : London



102

The core countries of Europe fit within an equilateral triangle of 4,500 km on a side, and a

circle with a radius of 10,000 km centering on London, encompasses the main parts of the globe.

If that circle is expanded to 12,000 km, it would reach Singapore.

Major airlines in Western Europe have already almost been consolidated into three groups:

Air France-KLM, IAG (BA, among others), and Lufthansa. In addition, Europe’s LCCs have

rapidly developed after the 1993/1997 liberalization and have now come to account for about

37% of the available seat capacity in Europe in 2019.

RPK in Europe (Western Europe and Eastern Europe) in 2019 was 1.974×109 passenger

kilometers, of which the Long Range (4,500 km or longer) market accounted for the largest

share of 41%; yet, average growth rates in the next 20 years are expected to be 6.8% and 5.2%

in the Medium Range and Short Range markets respectively compared with 2.9% in the Long

Range market, and in 2039, in terms of RPK, while the Long Range market will increase to

31%, the Short Range and Medium Range markets are expected to increase to 31% and 29%,

respectively.

Airplanes used in the Western European region are widebody airplanes which are used in for

Long-Range hauls, and narrow body airplanes which are mainly used in the Short and

Medium-haul range. The largest number of narrow body aircraft are used in a route range of

around 500 km, and the number gradually decreases as route hauls increase toward around

3,500 km. Although in the Regional Range market, regional jets are also used mostly in a route

range of around 600 km, the number in use is fewer than in the North American region, and far

fewer than in the Short Range market. In the Regional Range, passenger turboprop airplanes are

also used along with regional jets, but they are mostly used in route ranges of around 300 km,

and operated in shorter hauls than regional jets. Many medium and large passenger turboprop

airplanes with 40 seats or more are used. Small turboprops with less than 40 seats are used in

LR 2.9%

MR 6.8%

SR 5.2%

RR 2.3%



14% 9%

25% 29%

20%31%

41%31%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance rangeEurope

LR

MR

SR

RR


103

the range of 600km or less and the peak is around 200km.

Most airplanes used in the Eastern European region are narrow body airplanes. They are

mainly used in the Short Range of 900 to 1,900 km*, and while their numbers gradually

decrease for longer hauls, they are used for ranges up to around 4,000 km. The number of wide

body aircraft is small, being used for hauls between 5000 to 10000 km, and most hauls falling

somewhere between 5500 to 7000 km.

In the Regional Range, passenger turboprop aircraft with 40 seats or more are used for

distances between 300 to 700 km, mainly around 400 km. At longer distances, the number of

turboprop aircraft decreases, but they are sometimes used up to 1000km. Around 700km, the

market is split between middle- and large-sized turboprops and narrow body jets. Regional jets

are used in the range of 300-1500km, but are few.

(* In Eastern Europe, Wizz Air, an LCC, is performing well).

In Europe, the total number of aircraft in service will increase from 5,802 in end 2019 to

9,636 in 2039. Over this period, the demand and the sales value (at 2018 list prices) are

expected to be 8,376 units and 1.24 trillion U.S. dollars, respectively. Of the units to be

delivered, 54% will be replacements for existing airplanes. Narrow body airplanes will

constitute 73% of passenger aircraft delivered (7,595 units).

In Europe, over the past 20 years from 2000 to 2019, GDP grew at an average annual rate of

1.7%, passenger traffic demand at 3.8%, and cargo at 2.6%. As for the growth rate forecast from

2020 to 2039, GDP will grow at an average annual rate of 1.5%, passenger traffic demand at

4.0% and cargo demand at 3.0%. Although growth in demand for air transport in Europe is

slightly lower than the global average since Western Europe (growth rate of 3.8%), like the U.S.,

is a mature market, the growth rate in Europe as a whole is expected to be nearly the same as the

5,802

1,260

0

4,542

0

3,834

0

2,000

4,000

6,000

8,000

10,000

2019 2039

No

. of

Air

pla

nes

Fleet Developments of Airlines in Europe

Replacement

Growth

Retained

NewDeliveries

54%

9,636

8,376

46%

42%


104

global average since the growth rate of passengers in Eastern Europe (7.0%) is particular high.

Europe New Deliveries New Deliveries2019 2039 2020-2039 2019 2039 2020-2039

Passenger Turboprops (TP) Jet Freighters (JF : New + Converted) 15-39 seats 207 161 148 Narrowbody 140 166 166 40-59 seats 53 64 59 Medium Widebody 71 75 55 60 seats and larger 311 445 305 Large 89 97 48 (Total) TP 571 670 512 (Total) JF 300 338 269

Passenger Jets (JP) (Grand total) TP + JP + JF 5,802 9,636 8,376 20-59 seats 58 0 0 60-99 seats 371 394 341 (subtotal) Regional Jets (RJ) 429 394 341 Growth Indices (2020-2039)

100-119 seats 131 691 653 GDP 1.5 ％

120-169 seats 2,889 2,869 2,195 RPK 4.0 ％

170-229 seats 509 2,794 2,734 RTK 3.0 ％


230-309 seats 542 1,043 891 Sales (2019 List Price) 1,244 US$ billion 310-399 seats 308 818 780 400 seats and larger 123 19 1 (subtotal) Widebody Jets (WJ) 973 1,880 1,672 (Total) JP = RJ + NJ + WJ 4,931 8,628 7,595

Fleet Fleet


105

9.3 Asia-Pacific

The Asia-Pacific region is expected to

see strong economic growth in the coming

decades, given the expanding middle-class

income associated with the region’s large

population and an impressive economic

growth rate. Currently, China is exercising

strong economic traction globally with

capacity based on both its population and

economic growth rate. It has also created

massive demand for air travel.

China’s demographic dividend ended by

about 2015, and although its total

population will begin to decline after passing its peak about 2030, and the aging of Chinese

society will progress rapidly, its economic growth is expected to continue through this forecast

period (2020 to 2039). Moreover, the economic growth and expanded demand for air travel that

is forecast for the Southeast Asia region, that is ASEAN (Association of South-East Asian

Nations) countries, which includes Thailand, Vietnam, and Indonesia, is expected to drive RPK

growth and demand for production passenger airplanes on a scale comparable to China.

Airline deregulation has been progressing in this region as well. LCCs have been established

in Japan and Taiwan, where no LCCs had existed before, and open skies (full liberalization

within the region) in the ASEAN began to emerge in 2016 along with the launch of the AEC

(ASEAN Economic Community).

9,148

3,335

0

5,813

0

10,777

0

5,000

10,000

15,000

20,000

2019 2039

No

. o

f A

irp

lan

es

Fleet Developments of Airlines in Asia-Pacific

Replacement

Growth

Retained

NewDeliveries

%

16,590

19,925

35%

65%

Japan

Northeast Asia

SoutheastAsia

South Asia

Oceania

China


106

While the Asia-Pacific region covers a geographically large area, its ground transportation

networks have not yet been fully developed, and therefore, air transportation is more suitable for

the region.

In the Asia-Pacific region, over the past 20-year period from 2000 to 2019, GDP grew at an

average annual rate of 5.2%, passenger demand at 7.3%, and cargo demand at 3.6%. In this

period, the region shored up the growth of global air transport. In the period from 2020 to 2039,

this region is expected to continue growing significantly; GDP will grow at an average annual

rate of 3.9%, passenger demand at 4.8%, and cargo demand at 3.9%. It is a growth market

where 65% of airplanes to be delivered during the forecast period will be new demand.

The number of airplanes in service in the Asia-Pacific region will increase from 9,148 in

2019 to 19,925 in 2039. Over this period, new deliveries and the sales value (at 2019 list prices)

are expected to be 16,590 units and 2.36 trillion U.S. dollars, respectively. Significant domestic

(Regional- and Short-Range) markets also exist in India and China, and there is great demand

for aircraft from LCCs, so narrowbody airplanes will account for 73% of new deliveries (13,967

units).

[ China ]

China is a continental market with a vast territory, and transport demand (on an RPK basis) is

mainly for Regional and Short Range domestic routes. China, along with Europe and North

America, will be one of the three major markets leading the global air passenger traffic demand

in terms of RPK at the end of the forecast period (2039).

Asia-Pacific New Deliveries New Deliveries2019 2039 2020-2039 2019 2039 2020-2039

Passenger Turboprops (TP) Jet Freighters (JF : New + Converted) 15-39 seats 432 649 590 Narrowbody 182 393 393 40-59 seats 153 249 202 Medium Widebody 49 79 67 60 seats and larger 511 1,441 1,133 Large 135 324 238 (Total) TP 1,096 2,339 1,925 (Total) JF 366 796 698

Passenger Jets (JP) (Grand total) TP + JP + JF 9,148 19,925 16,590 20-59 seats 9 0 0

60-99 seats 318 661 645

(subtotal) Regional Jets (RJ) 327 661 645 Growth Indices (2020-2039)

100-119 seats 64 643 624 GDP 3.9 ％

120-169 seats 4,603 6,404 4,507 RPK 4.8 ％

170-229 seats 883 5,474 5,127 RTK 3.9 ％


230-309 seats 1,015 2,071 1,724 Sales (2019 List Price) 2,362 US$ billion 310-399 seats 682 1,501 1,332 400 seats and larger 112 36 8 (subtotal) Widebody Jets (WJ) 1,809 3,608 3,064 (Total) JP = RJ + NJ + WJ 7,686 16,790 13,967

Fleet Fleet


107

China's economic growth has been accompanied by a rapid increase in air passenger demand.

During that time, GDP per capita was less than $10,000 for a long time, and the demand for

travel increased rapidly within a range, at an average RPK growth rate of 12.4% per year over

the past 20 years. However, as a result of economic growth, GDP per capita has reached

$10,000, and as that continues to increase, the transition from the rapid growth model of

developing countries to the slow growth model of developed countries is expected to occur at an

early stage within the forecast period, and future RPK growth rate is expected to decline. (see

sections 5.2.7, 5.3.4)

RPK in the China region in 2019 was 1,333×109 passenger kilometers, of which the Short

Range (1,000 to 2,000 km) market was the largest accounting for 44%, and together with the

Regional Range market accounted for 59%. They are expected to grow at an annual average rate

of 4.7% and 5.2% in the next 20 years, and of these, the Short Range market is expected to

account for 48%, and together with the Regional Range market, 63% as of 2039.

Among current airplanes, narrow body airplanes are used in the Medium or Short Range (4,500


Center : Shanghai



108

km or less), mainly concentrated in a haul range from 400 to 2,200 km, and make up most

airplanes used in this region. Peak use occurs around 1,300 km, but the distribution is spread out

evenly and there is no preeminent range. Although fewer in number than narrow body airplanes,

widebody airplanes are used across the region from Long Range to Regional Range (around 800

km). Over 5,000 km, they are used for Long Range distances up to 13,000km, and although they

tend to group in several characteristic points in between, they are used almost uniformly across

the entire range. For hauls of less than 5,000 km, the flight density is particularly high in the

range of 1,000 to 2,000 km. Only a small number of passenger turboprop airplanes are used.

Demand for air transport in China is mainly for Regional Range routes and Short Range

routes up to 2,000 km, of which 90% are domestic routes (when combined with Medium Range

routes, 80% are domestic routes). The airplanes used on these routes are narrow body airplanes,

and China’s domestic-made C919 aircraft is utilized in these ranges, in addition to the 737 and

A320 families.

Even if it is not feasible to export the C919 due to issues such as type approval, it is

conceivable that China could nurture domestic aircraft production and an aviation industry

using only its domestic market, taking into account the approval by the Civil Aviation

Administration of China and China’s vast territory. China, while currently using the 737 and

A320, will adopt an import substitution policy in order to have superiority in the industry, and it

is expected to shift to mainly procuring domestic production aircraft while absorbing these

foreign technologies. If that is the case, even though transport demand is large, China’s market

size might rapidly shrink in the next 20 years from the viewpoint of the U.S./European

manufacturers. In addition, the outlook for US-China relations has not been optimistic in recent

years, and the business environment may change in the future.

LR 4.0%

MR 4.4%

SR 5.2%

RR 4.7%



15% 15%

44% 48%

17% 16%

24% 21%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance rangeChina

LR

MR

SR

RR


109

[ Southeast Asia ]

As defined by JADC, the Southeast Asian region consists of the 10 ASEAN member

countries and East Timor. RPK in Southeast Asia in 2019 was 648×109 passenger kilometers, of

which the Long Range (4,500 km or longer) market was the largest accounting for 32%,

followed by the Medium Range (2,000 to 4,500 km) market which accounted for 32%. Average

growth rates in the various distance ranges over the next 20 years are 5.7% in the Medium

Range market and 6.7% to 6.9% in the Short and Regional Range markets. As a result of the

growth of the Regional and Short Range markets, hauls in the range of 2,000 km or shorter will

account for 49% of the total, and hauls in the range of 4,500 km or shorter will account for 85%

of the total in 2039.

Narrow body airplanes are currently the most widely utilized aircraft type and are mainly

used in distances ranging from 300 to 3,500 km, especially for distances up to 2,000 km, with

peak utilization around 500 to 700 km. Among current airplanes, many medium and large


Center : Singapore

Equidistant Circles increments: 5,000km


110

passenger turboprop airplanes with 40 seats or more are used in a Regional Range of 700 km or

less, mostly around 300 km. Although there are not many wide body airplanes, they are used for

various distances from Long Range (around 14,000 km) to Short Range.

LCCs are flourishing in Southeast Asia, with the number of seats provided by LCCs in the

region exceeding 50%: second only to South Asia (India, etc.). Since income levels have not yet

risen significantly (overall average per capita GDP is less than $3,000 in the region), the low

cost fares offered by LCCs appears to be suitable for realizing air transportation demand. In

2016, the “Value Alliance” became the first alliance established by LCCs. LCCs operating in the

Southeast Asian region cooperate with each other to provide services such as transit reservations

and through-ticketing. If things go according to plan, it is thought that LCCs will be able to

provide passengers with effective Medium to Long Range transit services by means of smooth

connections between LCCs.

Furthermore, aviation liberalization is progressing in this region as well. Preparations began

with the reference to the Open Sky Policy made during the 1995 ASEAN Summit, and at this

time, all ASEAN members have ratified, under the RIATS roadmap, which promotes integration

of air travel sectors, the multilateral agreement on full liberalization of air freight services

(MAFLAFS), the multilateral agreement on air services (MAAS) and the multilateral agreement

for the full liberalization of passenger air services (MAFLPAS). As a result, the designated

airlines are granted third, fourth and fifth freedom traffic rights in sub-regions within the

ASEAN region, cities where international airports are located, and between capitals.

LR 1.5%

MR 5.7%

SR 6.7%

RR 6.9%



19% 25%

18%24%

32%

35%

32%15%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance rangeSoutheast Asia

LR

MR

SR

RR


111

[ South Asia ]

This region, including the Indian subcontinent, has a large interior. In addition, many migrant

workers are sent from the countries in the region to the Middle East, and the Middle East

(Dubai) is no further than a Medium Range (2,000 to 4,500 km) haul from the entire region.

RPK in South Asia in 2019 was 275×109 passenger kilometers, of which the Short Range

(1,000 to 2,000 km) market was the largest accounting for 36%, followed by the Medium Range

(2,000 to 4,500 km) market accounting for 30%. The average growth rates in the various

distance ranges over the next 20 years are expected to be 7.1% to 8.3% in the Medium and

Short Range markets respectively, and 7.5% in the Regional Range market. By 2039, the

Medium and Short Range are expected to account for 31% and 45% respectively. Those routes,

combined with those in the Regional Range will drive air transport demand on the Indian

subcontinent.

Among current airplanes, for distances of 500 to 4,000 km, especially 500 to 2,000 km, many

narrow body airplanes are used. While the number of aircraft gradually decreases between 2,000

to 4,000 km, they are still the main airplanes utilized for hauls in this range. Widebody airplanes

begin to be used for hauls exceeding 2,000 km, but up to around 4,000 km, they are used along


Center : New Delhi



112

with narrow body airplanes, and beyond 4,000 km, only wide body airplanes are used and these

are few. Many passenger turboprop airplanes are used in a Regional Range of 100 to 800 km,

with peak use around 300 km.

India is representative of this region in terms of both population and economic power, and in

recent years has, along with experiencing remarkable economic growth as a cornerstone of

BRICS, increased RPK and continued to procure new equipment. GDP per capita is around

$2,000, and travel demand is rapidly increasing as income levels rise. However, GDP is

expanding due to population growth, the growth of GDP per capita is gradual, and income level

and thus freight demand is still low. In this environment, in which domestic airlines compete

ruthlessly for market share and have been unable to generate satisfactory profits, Jet Airways,

which was the second largest in India, disappeared due to company liquidation in 2019.

Immediately following the collapse of Jet Airways, the yield of the remaining airlines

increased, but a recurrence of share competition may be inevitable. Based on the actual data for

the past 20 years and the future economic outlook, this forecast predicts that the RPK in this

region, excluding Long-Range hauls, will grow at a rate of over 7%. To realize this growth,

however, a long-term, sustainable balance between regional income levels and airline yields

needs to be established.

LR 2.6%

MR 8.8%

SR 6.2%

RR 6.6%



19% 25%

18%24%

32%

35%

32%15%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance rangeSoutheast Asia

LR

MR

SR

RR


113

[ Northeast Asia ]

As defined by JADC, the region consists of Taiwan, North and South Korea, and Mongolia,

but Taiwan and South Korea are the cores of economic power and RPK. The land area of each

of these countries is small, much of the air transport involves flights to different regions, and

Long Range hauls occupied 48% of the RPK in 2019. At the same time, all Southeast Asia is

within a Medium Range (~4,500 km) haul, Taiwan to Korea is only 2,000 km, Taiwan to Japan

Kansai is also only 2,000 km, and Taiwan to Hokkaido is 3,000 km. In recent years, LCCs have

become much more active in this region.

RPK in Northeast Asia in 2019 was 232×109 passenger kilometers, of which the Long Range

(4,500 km or longer) market was the largest, accounting for 48%, followed by the Medium

Range (2,000 to 4,500 km), Short Range (1,000 to 2,000 km) and Regional range (up to

1000km) markets, accounting for 30% and 11% respectively. Average growth rates in the

various distance ranges over the next 20 years are expected to be 3.9% and 3.3% in the Short

Range and Medium Range markets respectively, and with increases in Short and Medium


Center : Taipei



114

Ranges, as of 2039, the Long Range and Medium Range markets are expected to account for

39% and 37% respectively.

Among current airplanes, passenger turboprop airplanes are also used in a Regional Range up

to 300 km, and in the 300 to 3,700 km range, many narrow body airplanes are used, with their

peak utilization on hauls between 400 to 500 km. The use of widebody airplanes also starts at

distances of more than 500 km, and continues until distances of 13,000 km. Widebody airplanes

are used alongside narrow body inside the Short Range, and the number in use is almost the

same as that of narrow body airplanes used in these Ranges. For haul ranges of 4,000 km or

longer, only widebody airplanes are used, and they are especially prevalent in distances above

9,000 km.

LR 1.1%

MR 3.3%

SR 3.9%

RR 0.9%



11% 9%

11% 15%

30%37%

48% 39%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance rangeNortheast Asia

LR

MR

SR

RR


115

[ Japan ]

The distance between Japan (Tokyo) and the West coast of the United States is approximately

9,000 km, and the East coast is about 11,000 km. The main part of Europe is also about 10,000

km from Japan. The only Southeast Asian countries, which are thought to be “close” to Japan,

that can be reached from Tokyo by medium-range airplanes (covering up to 4,500 km), are

Thailand (Bangkok), the Philippines, Vietnam, Myanmar (Naypyidaw), etc., while Malaysia,

Singapore and Indonesia are more than 4,500 km far away from Tokyo, and are covered by

long-range airplanes.

The only destinations which airplanes can reach from Japan on a Short Range up to 2,000 km

are limited to places such as Beijing, Shanghai, and Northern Taiwan. Regional flights under

1,000 km include all domestic routes, as well as the main Tokyo-Sapporo, and Tokyo-Fukuoka

routes.

RPK in Japan in 2019 was 204×109 passenger kilometers, of which the Long Range (4,500

km or longer) market was the largest accounting for 39%, followed by the Regional Range

(1,000 km or shorter), Short Range (1,000 to 2,000 km) and Medium Range (2,000 to 4,500 km)

markets which account for 33%, 18% and 10% respectively. Regarding markets for different


Center : Taipei



116

distance ranges over the next 20 years, average growth rates are expected to be 4.2% and 4.0%

in the Medium Range and Short Range markets respectively. As of 2039, we expect the Short to

Medium Range markets to grow more than currently, with the Long Range, Medium Range,

Short Range, and Regional Range markets accounting for 36%, 12%, 23% and 29%,

respectively.

Among current airplanes, narrow body airplanes are mainly used in a haul range from 500 to

2,000 km, and many are used in a range of around 1,300 km. Widebody airplanes are used in

Long Range (up to 11,000 km) down to Regional Range routes. Both narrow body and wide

body jets reach peak utilization around the 900 km distance range. Regional jets and passenger

turboprop airplanes are used in a Regional Range; and both, along with wide body airplanes, are

used in almost the same number in a range from 500 to 700 km. Mostly small-scale turboprops

are used for distances less than 500 km, with peak use occurring around 300 km.

LR 2.3%

MR 4.2%

SR 4.0%

RR 2.2%



33% 29%

18% 23%

10% 12%

39% 36%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance range ‐Japan

LR

MR

SR

RR


117

[ Oceania ]

As defined by JADC, the region consists of Australia, New Zealand, Papua New Guinea and

the island states which lie to the east of these countries. These are in isolated positions in the

Pacific Ocean, and even if a circle is drawn with a radius of 10,000 km centered on Sydney, for

example, contact with Southeast Asia is possible, but no major land masses can be reached. One

must travel 7,000 to 8,000 km to reach Japan and Singapore from around the Sydney area, even

utilizing a Great Circle route. Even within the region, the distance between Sydney and

Wellington is approximately 2,500 km.

RPK in the Oceania region in 2019 was 211×109 passenger kilometers, of which, due to its

geographical features, the Long Range (4,500 or longer) market is the largest, accounting for

46%. Average growth rates in the various distance range markets in the next 20 years are

expected to be 4.2% and 4.3% in the Medium Range and Short Range markets respectively, and

with increases in Short Range to Medium Ranges, as of 2039, the Long Range market (36%

share) and the Medium Range market (33% share) are expected to expand.

Among current airplanes, many small and medium or large passenger turboprop airplanes are

used in a Regional Range of 700 km or less, mostly around 400 km. Narrow body airplanes are


Center : Sydney



118

mainly used in haul ranges from 700 to 4,500 km, especially in a range from 500 to 2,700 km.

Although there are not many widebody airplanes, they are used in a range that extends from

Long Range to Short Range (2,200 km to 13,400 km).

LR 1.7%

MR 4.2%

SR 4.3%

RR 2.6%



14% 13%

14% 18%

26%33%

46%36%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance range ‐Oceania

LR

MR

SR

RR


119

9.4 Middle East

The Middle East is located at the junction of the Eurasian and African continents. By Great

Circle distance, for example, Dubai-London is 5,500 km, Dubai-Cape Town is 7,700 km, Dubai-

Singapore is 5,900 km, and Dubai-Tokyo is 8,000 km. By utilizing aircraft capable of cruising

ranges of about 10,000 km, passengers can reach Europe, Africa, and Asia by connecting in

Dubai. (11,500 km from Dubai to Washington, 14,000 km from Dubai to Los Angeles)

Taking advantage of its geographical features, airlines in the Middle East have captured

global Long Range air transport demand with sixth freedom traffic rights, and have experienced

double-digit growth in both passenger and freight demand over the past 20 years. In particular,

Emirates, Etihad Airways and Qatar Airways have expanded their routes around the world,

centering on Dubai, Abu Dhabi and Doha, and have captured much of the transfer flight

demand.

RPK in this region in 2019 was 774×109 passenger kilometers, of which the Long Range

(4,500 km or longer) market accounted for a remarkable 63%, and over these past 20 years, this

market has shown an annual average growth rate of 15%, driving growth in the air transport of

this region.

Since 2015, however, the pace of growth has slowed. This is likely due to the end of the


Center : Dubai



120

increase in transport demand accompanying the opening of new routes and the end of

re-splitting the transport share of other airlines.

Among current airplanes, narrow body airplanes are mainly used in a haul range of 4,000 km,

but widebody aircraft are used in ranges between 2,000 and 4,000 km. Only widebody aircraft

are used at distances greater than 4000 km, with a concentration in the 4,500 to 6,500 and

11,000 to 12,000 km ranges.

In this forecast, the average growth rate, in terms of RPK, for Long Range hauls over the next

20 years is expected to be 3.2%. It is expected that the Medium Range and Short Range markets

will show growth rates of 5.8% and 4.4% respectively, and even if growth in the Long Range

market slows down, transport demand in this region is expected to keep growing, albeit on a

small scale compared to the growth of the Long Range market (37% of RPK in 2019). The

average growth rate across all distance ranges is expected to be 4.06%.

LR 3.2%

MR 5.8%

SR 4.4%

RR 3.8%

LR 14.0%

MR 10.2%

SR 8.5%

RR 6.2%



14% 7% 5% 5%

14%11% 8% 9%

30%28%

24%33%

41%54% 63%

54%

0%

20%

40%

60%

80%

100%

1999 2009 2019 2039

RPK share by distance rangeMiddle East

LR

MR

SR

RR

12 22 41

87 12

33 62 148 26 83

183

562

36 162

488

917

0

400

800

1200

1600

2000

1999 2009 2019 2039

( ×109 ) RPK by distance range ‐Middle East

RR SR MR LR


121

The Long Range market, which has grown due to the demand for transit, carries mostly

passengers who live outside the Middle East, but RPK analysis shows that the Medium Range

and shorter routes are mainly used by people living in the region.

Airlines in the Middle East developed primarily around Long Range routes, but airline

liberalization has even started in the Middle East. In Saudi Arabia, Flynas (formerly Nas Air),

which is the only private airline in the country, and also operates as an LCC, was founded in

2010 and operates domestic and Short Range international flights. In the UAE, flydubai was

founded as an LCC in 2008. The airline, in cooperation with Emirates Airlines, has expanded

their routes including the opening of direct flights from Dubai to Helsinki (737MAX8).

Major airlines in this region have proactively participated in the air freight transport “belly

cargo” business using vacant spaces in the lower holds of their large widebody passenger

airplanes, and they have realized remarkable growth while major global airlines have been

struggling to grow or maintain their air freight transport businesses (refer to Appendix G).

Emirates Airlines has increased its RTK by focusing on belly cargo, and in addition, it has

begun strengthening transport by freighter jets since 2013, although its total RTK growth has

stagnated somewhat since 2016. Qatar Airways has increased its RTK by belly cargo and

freighter jets at almost the same growth rate, and it continued growing in 2018.

Four countries including Saudi Arabia cut off their diplomatic relations with Qatar in June,

2017, and even decided to refuse to allow aircraft from Qatar to fly over their territory. This

stopped Qatar from transporting daily commodities by land, and Qatar has since relied on

transportation by sea and air. For this reason, it is expected that air cargo transportation will

continue to be of critical importance.

In the Middle East, over the past 20 years from 2000 to 2019, GDP grew at an average annual

rate of 3.9%, passenger traffic demand at 12.4%, and cargo demand at 12.9%. Significant

growth continues to be expected for the period from 2020 to 2039, with GDP set to grow at an

average annual rate of 2.9%, passenger traffic demand at 4.1%, and cargo demand at 4.6%.

The number of airplanes in service in the Middle East (including cargo aircraft) will increase

from 1,454 in 2019 to 2,832 in 2039. Over this period, the units delivered and the sales value (at

2019 list prices) are expected to be 2,427 units, worth 573.3 billion U.S. dollars, respectively. Of

the units delivered, 57% will be new demand. In addition, widebody airplanes will account for

46% of new deliveries (2,217 units) for passenger airplanes.

Previously, airlines in the Middle East required large, widebody airplanes with excellent load


122

capacity as well as a long flight range, and their purchasing power allowed them to exert great

influence on airplane manufacturers. Development of the 777X began with purchase orders

from airlines in the Middle East, while the A380 came to an end due to order cancellation. Since

then, as the RPK growth rate in the Long Range has declined, airlines have already canceled

orders, postponed orders, and redesigned aircraft. Depending on the actual growth rate in the

future, along with a trend towards continuing to use existing equipment, the number of

deliveries may be further reduced, especially for large, widebody aircraft.

1,454

405

0

1,049

0

1,378

0

1,000

2,000

3,000

2019 2039

No

. of

Air

pla

nes

Fleet Developments of Airlines in Middle East

Replacement

Growth

Retained

NewDeliveries

%

43%

2,832

2,427

57%

Middle East New Deliveries New Deliveries2019 2039 2020-2039 2019 2039 2020-2039



100-119 seats 12 98 96 GDP 2.9 ％

120-169 seats 476 634 520 RPK 4.1 ％

170-229 seats 62 424 413 RTK 4.6 ％

(subtotal) Narrowbody Jets (NJ) 550 1,156 1,029 Fleet 3.4 ％

230-309 seats 239 485 404 Sales (2019 List Price) 573 US$ billion 310-399 seats 342 795 726 400 seats and larger 146 64 9 (subtotal) Widebody Jets (WJ) 727 1,344 1,139 (Total) JP = RJ + NJ + WJ 1,328 2,550 2,217

Fleet Fleet


123

9.5 Latin America

As defined by JADC, this region consists of Mexico, the Central American region south of

Mexico, the South American continent, and the Caribbean region. Along with Asia, Latin

America has shown significant growth over the past several years. With a surge in direct

investment in Latin America thanks to the development of resources and the Free Trade

Agreement, nominal GDP more than doubled during the ten-year period from 2000 to 2010, and

the real GDP growth rate from 2003 to 2008 was 5.1%. However, recently, there has been a

deceleration in the economies of developed countries and China, and as prices of resources,

including oil, have fallen and exports have declined, the domestic demand that supported the

Latin American economy has also declined, causing the economies of Argentina, Brazil,

Venezuela, and other Latin American countries to decelerate rapidly. According to analytical

institutions, real GDP will grow at an average rate of 2.8% over the next 20 years, but the total

real GDP in the region will have been in a “level-off” state since 2013, and it is likely that the


Center : Quito



124

economic growth rate will continue to decline in the mid-term as well.

Airline mergers have taken place in Latin America as in the U.S. and Western Europe. Among

major airlines, cross-border mergers have taken place between AVIANCA in Colombia and

TACA in El Salvador, and between LAN Airlines in Chile and TAM Airlines in Brazil,

respectively. As a result, airlines in this region have been consolidated into two major

companies. Airline restructuring in Brazil made progress as the result of domestic mergers.

In addition, in this region too, the progress of airline liberalization has led to the founding of

LCCs such as GOL in Brazil, Interjet and Volaris in Mexico, and Viva Colombia in Colombia.

Regarding available seat capacity for intra-regional routes, the share of LCCs rose by about 12

times, from about 3% in 2001 to 35% in 2017. In addition, in order to attract domestic demand

in countries other than their own, LCCs have established subsidiaries to operate in those

countries.

RPK in this region in 2019 was 442×109 passenger kilometers, of which the Long Range

market was the largest, accounting for 41%, followed by the Short Range market, which

accounted for 26%. Over the next 20 years, while the Short Range market will grow at an

average rate of 4.4%, the other haul markets will grow at an average rate ranging from 2.5% to

3.2%. It is ex expected that in 2039 the Short Range market will have expanded, while the Long

Range market will have decreased.

Currently, narrow body aircraft are the main airplanes used for distances between 300 to

5,000 km. The number of aircraft is particularly large in the range of 300 to 1,300 km, followed

by 2,500 km. Widebody aircraft are used in the 6,500 to 13,000 km range, but not in large

numbers. Turboprops are often used in the Regional Range of less than 700 km, and peak use

occurs around 300 km. Regional jets are also used in the 400-1,000 km range. In the Regional

Range (up to 1,000 km), all three categories other than wide body aircraft are used.

In Latin America, over the past 20 years from 2000 to 2019, GDP grew at an average annual

rate of 2.1 %, passenger demand at 6.0%, and cargo demand at 1.5%. As for the growth rate

forecast from 2020 to 2039, GDP will grow at an average annual rate of 2.8%, which will be

almost the same as the growth rate for global GDP, but passenger demand will decrease to 3.0%,

while cargo demand is expected to grow at 2.0%.


125

LR 2.5%

MR 2.5%

SR 4.4%

RR 3.2%



23% 23%

26% 33%

10%9%

41% 35%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance rangeLatin America

LR

MR

SR

RR

2,011

423

0

1,588

0

945

0

1,000

2,000

3,000

2019 2039

No

. of

Air

pla

nes

Fleet Developments of Airlines in Latin America

Replacement

Growth

Retained

NewDeliveries%

2,956

2,533

63%

37%

Latin America New Deliveries New Deliveries2019 2039 2020-2039 2019 2039 2020-2039



100-119 seats 71 262 251 GDP 2.8 ％

120-169 seats 941 1,022 777 RPK 3.0 ％

170-229 seats 95 525 517 RTK 2.0 ％


230-309 seats 132 153 115 Sales (2019 List Price) 254 US$ billion 310-399 seats 26 74 63 400 seats and larger 0 0 0 (subtotal) Widebody Jets (WJ) 158 227 178 (Total) JP = RJ + NJ + WJ 1,449 2,239 1,915

Fleet Fleet


126

9.6 Africa

Africa has abundant underground resources such as oil and minerals, and in recent years it has

been growing rapidly mainly due to the development of these resources. Chinese investment in

these resources has been well documented. Some take the view that air transport demand will

grow because of the increase in the size of the middle class will drive consumption. However,

there are many problems which are yet to be solved such as poverty, regional conflicts and

infectious disease. Per capita GDP in Africa will show little increase over the next 20 years, and

the increase in GDP is expected to be due to population growth.

RPK by African airlines in 2019 was 180×109 kilometers, of which the Long Range (4,500

km or longer) market accounted for the most significant share at 37%. In this forecast, the

Medium Range market in the next 20 years is expected to grow at an average rate of 5.3%,

followed by the Short Range market at 3.4%. RPK in 2039 is expected to be 354×109

passenger kilometers, of which the Medium Range market will be the largest, accounting for

39%

Currently, narrow body aircraft are the main airplanes used for distances between 400 to

2,000 km. They are also used for distances up to 4,500 km, but gradually decrease in number as


Center : 10 degrees north latitude

20 degrees east longitude



127

LR 2.3%

MR 5.3%

SR 3.4%

RR 1.6%



13% 9%

22% 22%

28% 39%

37% 30%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance rangeAfrica

LR

MR

SR

RR

1,392

265

0

1,127

0

333

0

1,000

2,000

2019 2039

No

. of

Air

pla

nes

Fleet Developments of Airlines in Africa

Replacement

Growth

Retained

NewDeliveries

%

1,460

1,725

77%

23%

AFRICA New Deliveries New Deliveries2019 2039 2020-2039 2019 2039 2020-2039



100-119 seats 45 106 104 GDP 3.6 ％

120-169 seats 397 394 305 RPK 3.4 ％

170-229 seats 7 233 233 RTK 3.8 ％

(subtotal) Narrowbody Jets (NJ) 449 733 642 Fleet 1.1 ％

230-309 seats 116 157 117 Sales (2019 List Price) 156 US$ billion 310-399 seats 58 113 94 400 seats and larger 0 0 0 (subtotal) Widebody Jets (WJ) 174 270 211 (Total) JP = RJ + NJ + WJ 807 1,077 917

Fleet Fleet


128

the distance increases. Turboprops are often used in the Regional Range of less than 700 km,

and peak use occurs around 200 km for small aircraft and around 300 to 350 km for

medium-sized aircraft. Regional jets are also used for distances around 500 km.

In Africa, over the past 20 years from 2000 to 2019, GDP grew at an average annual rate of

4.0%, passenger demand at 5.0%, and cargo demand at 9.0%. As for the growth rate forecast

from 2020 to 2039, GDP will grow at an average annual rate of 3.6%, passenger demand at

3.4%, and cargo demand at 3.8%.

9.7 CIS

Lead by Russia, with 8 consecutive years of economic growth since 2000, the economies of

the CIS member countries, such as Ukraine*, which have tried to promote a transparent

market-oriented economy, and Kazakhstan and Turkmenistan, which have shown steady

economic development related to their rich resources, have continued to grow after overcoming

the destructive economic crisis which followed the collapse of the former Soviet Union. In

Russia, the average wage rose from 2,200 rubles in 2000 to 12,500 rubles in 2007, and the


Center : Moscow



129

number of people with middle-class income increased significantly. Instability, however, has

continued in recent years, due to falling crude oil prices and Western economic sanctions over

the Ukraine situation. (*: Still included in the CIS in order to maintain statistical continuity.)

Air transport is important for movement within the region because the CIS are spread out

over a vast land area, and thus distances between cities are vast. Accordingly, there has been

strong air transport demand. Especially during the ten-year period from 2004 to 2014, when

economic growth in this region was stable, the average annual growth rate of RPK reached

8.9%. Although it has stopped growing since then due to the economic slowdown in emerging

countries, RPK was thought to have been 290×109 passenger kilometers in 2019.

RPK consisted of the Medium Range (2,000 to 4,500 km) market, which accounted for 44%,

followed by the Short Range (1,000 to 2,000 km) market, which accounted for 26%. For 2039,

it is expected that the average growth rate of the Regional and Short Range markets will be

3.3% each, which is relatively high, and the growth rate of the Medium and Long Range

markets will be 2.4 and 2.6% respectively. The intra-regional share of RPK in 2039 is expected

to be almost the same as that in 2019.

In the CIS, over the past 20 years from 2000 to 2019, GDP grew at an average annual rate of

4.0%, passenger demand at 8.6%, and cargo demand at 11.7%. As for the growth rate forecast

from 2020 to 2039, GDP will grow at an average annual rate of 2.1%, passenger demand at

2.8% and cargo demand at 3.7%.

LR 2.4%

MR 2.6%

SR 3.3%

RR 3.3%



7% 8%

26% 29%

44% 43%

22% 21%

0%

20%

40%

60%

80%

100%

2019 2039

RPK share by Distance rangeCIS

LR

MR

SR

RR


130

Among the airplanes operated in the CIS, those manufactured during the former Soviet era

have been decreasing, with a shift to airplanes manufactured in the U.S. and Western Europe. As

of the end of 2016, 72% of airplanes in service being operated by airlines in the CIS and 82% of

the backlog are airplanes made by Western manufacturers including Airbus and Boeing.

1,495

335

0

1,160

0

469

0

1,000

2,000

2019 2039

No

. of

Air

pla

nes

Fleet Developments of Airlines in CIS

Replacement

Growth

Retained

NewDeliveries

%

1,964

1,629 71%

29%

CIS New Deliveries New Deliveries2019 2039 2020-2039 2019 2039 2020-2039



100-119 seats 78 152 146 GDP 2.1 ％

120-169 seats 522 601 462 RPK 2.8 ％

170-229 seats 147 325 282 RTK 3.7 ％

(subtotal) Narrowbody Jets (NJ) 747 1,078 890 Fleet 1.4 ％

230-309 seats 80 155 143 Sales (2019 List Price) 193 US$ billion 310-399 seats 50 101 90 400 seats and larger 9 1 1 (subtotal) Widebody Jets (WJ) 139 257 234 (Total) JP = RJ + NJ + WJ 1,117 1,520 1,266

Fleet Fleet


131

10. Airplane Demand

This section shows the number of units (passenger planes and freight planes) to be newly

built and delivered during the current forecast period (2020-2039), as well as the sales amount

and share.

The sales amount is calculated by multiplying each price by the number of units delivered by

model determined in the demand forecast calculation, and the price for each model is mainly

based on the sales price each manufacturer makes available to the public. These prices are

so-called “catalog prices”, and the prices in actual contracts are said to be 60% or 70% of these,

but since individual contract details are not disclosed, catalog prices will be used for our

calculations.

10.1 Jet Airplane (Passenger and Cargo) Sales Forecast by Region

8,021 7,676

14,190

2,305 1,952

938 1,305

1,137 1,233

2,319

572

246 148 188

0

1,000

2,000

3,000

0

5,000

10,000

15,000

North America Europe Asia-Pacific Middle East Latin America Africa CIS

No. of Airplanes


36,387 Airplanes5,842 US$ billion

Total

2019 Price(US$ billion)

＊Total of passenger jets and jet freighters

Jet Airplane Sales Forecast by Region

North America

19%

Europe21%Asia/

Pacific40%

Middle East10%

Latin America

4%

Africa3%

CIS3%

Jet Airplane Sales Share by Region(Pax.Planes & Freighter)


132

10.2 Passenger Jet Sales Forecast

Most sales will be seen in the 170-229-seat class. The number of delivered aircraft will be

only slightly more than the 120-169-seat class aircraft, but the sales amount will be higher due

to the larger body size and higher per unit price.

Narrow body aircraft cost less per unit, but the number of airplanes is higher. For that reason,

their total sales amount exceeds that of wide body aircraft.

7,664 7,595

13,967

2,217 1,915

917 1,266

1,041 1,210

2,239

539

236 142 176

0

1,000

2,000

3,000

0

5,000

10,000

15,000


No. of Airplanes



Total



Passenger Jet Sales Forecast by Region

20-590%

60-992%

100-1194%

120-16920%

170-22928%

230-30922%

310-39924%

400 over0%

Passenger Jet Sales Share

NarrowbodyWidebody

(Seats)

46%52%


133

North America, Europe, and China, will have the highest number of aircraft, respectively, and

the highest sales will occur in Europe ($1.2 trillion), North America ($1.04 trillion), and China

($1.00 trillion).

7,664 7,595

13,967

2,217 1,915

917 1,266

1,041 1,210

2,239

539

236 142 176

0

1,000

2,000

3,000

0

5,000

10,000

15,000


No. of Airplanes



Total



Passenger Jet Sales Forecast by Region

6,697

806

4,931

1,033

7,686

2,823

608 232

3,719

1,630 560

161

1,580 577 690 109 529 114

1,328 333

1,449 324 807

160 1,117

254

7,664 7,595

13,967

675

6,154

595

3,607

2,227

709

2,217 1,915

917 1,266

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2019

2039

2019

2039

2019

2039

2019

2039

2019

2039

2019

2039

2019

2039

2019

2039

2019

2039

2019

2039

2019

2039

2019

2039

2019

2039

Passenger Jet Fleet and Delivery Forecast by Region

2019 Year End: 2039 Year End: 2020-2039 Deliveries:

Total Fleet24,01541,27435,541

Retained

N.of Airplanes

New Delivery

8,470

NorthAmerica

Europe AsiaPacific

MiddleEast

8,628

16,790

2,550

LatinAmerica

Africa CIS

2,239 1,077 1,520

Japan OceaniaSouthAsia

SoutheastAsia

NortheastAsia

China

2019 2039

ExistingRetained

New Delivery


134

10.3 Passenger Turboprop Airplane Demand Forecast

Compared with the jets, the number of turboprop passenger planes makes up just over 10% of

the market and sales are insignificant at about 1.5%.

Aircraft demand is highest in the Asia-Pacific region, but in terms of the breakdown (number

of aircraft), Southeast Asia has the highest demand, followed by South Asia (mainly India),

followed closely by Oceania. There is very little demand in China. Except for a few areas,

turboprop aircraft are in strong demand in almost all regions, as they appear to be a critical link

in people’s daily lives.

885 678

568

1,390

557

0

500

1,000

1,500

2,000

15-19 20-39 40-59 60-79 80-99

Total4,078 Units

85 US$ billion

Size (No. of Seats)

Passenger Turboprop Sales Forecast by SizeNo. of Airplanes2019 Price

(US$ billion)

7

1212

36

0

10

20

30

18

40

474 512

1,925

47 453 433

234 9

12

43

1.1 8 8 4

0

10

20

30

40

50

0

400

800

1200

1600

2000


Passenger Turboprop Sales Forecast by RegionNo. of Airplanes


4,078 Airplanes85 US$ billion

Total



135

10.4 Airplane Sales (total) (passenger jets, passenger turboprops, and jet freighters)

672

113

571

158

1,096

414 55 27 74

35 34 19

319 164 248

87 366

82 45 19

448

92

520

95 231

50

474 512

1,925

29 117 13

754 640

372

47

453 433 234

0

400

800

1,200

1,600

2,000

2,40020

19

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

201

9

203

9

Total Fleet 2019 Year End： 3,583 2039 Year End： 5,019 2020-2039 Deliveries：

4,078

No.of Airplanes

587

North America

Europe Asia Middle

670

2,339

66

545 528

284

Latin Africa CISJapan China OceaniaSouthAsia

SoutheastAsia

NortheastAsia

Passenger Turboprop Fleet and Delivery Forecast by Region

2019 2039

ExistingRetained

New Delivery

8,495 8,188

16,115

2,352 2,405 1,371 1,539

1,145 1,244

2,362

573

254 156 193

0

1,000

2,000

3,000

4,000

0

5,000

10,000

15,000

20,000


No. of Airplanes



Total

2019 Price

＊Total of passenger jets, passenger turboprops and jet freighters

Airplane Sales Forecast by Region


136

846 new freighters will be delivered at a cost of $260.3 billion, with large aircraft, the size in

highest demand, making up $165.6 billion of the total and medium-sized wide body aircraft

accounting for $94.6 billion.

North

America

21%

Europe

20%

Asia-Pacific

40%

Middle East6%

Latin

America

6%

Africa

3%

CIS4%

New Deliveries Units

North

America

19%

Europe

21%

Asia-Pacific

40%

Middle East10%

Latin

America

4%

Africa

3%

CIS3%

Total Sales : US$ billion5,927 40,465

Market Share of Airplane Demand and Sales by Region 2020-2039

(Passenger Airplanes (Jet & Turboprop) and Freighters)


137

11. Aero Engine Demand

This forecast covers new engine deliveries and the associated sales amount for the forecast period

(2020-2039). Aero engine demand is comprised of two segments: engines installed on airplanes at

the time of delivery, and spares (finished products). The former is the result of multiplying the

number of airplanes sold by the number of engines mounted on the airplanes, and the latter is the

result of multiplying the number of engines mounted on airplanes at the time of delivery by a spare

ratio of 10%. An engine is the most expensive equipment to purchase among the components of an

airplane, and engine prices account for about 20% of the amount of airplanes sold.

8,976 2,875

56,839

3,320 17,418

0

20,000

40,000

60,000

80,000

TurboProp <12 12-35 35-65 65-115

No.of Engines Value(US$billion)

Turboprop 8,976 19Jet 80,453 1,299

Total 89,429 1,318

CRJ200/700/900EMB135/145/170/190

ARJ21

ATR42/72DHC-8L410

Aero Engine Delivery and Sales Forecastby Thrust RatingNo. of Engines

019 15

641

55

588

200


Thrust(×1000 lbs)

400

800

A318,A319,A320,A321A340-200/-300737,MD-80/-90

MRJ70/90,CS100/300

A300-600,A310A340-500/-600747,757,767

A380A350,A330

777,787

* Including 10% of total number of engines installed on airplanes as spare engines.

600

17,927 17,880

35,106

5,020 5,236 2,990 3,343

268 280

534

12860 37 46 0

200

400

600

800

0

10,000

20,000

30,000

40,000


Aero Engine Delivery and Sales Forecast by RegionNo. of Engines


Total89,429 units

1,318 US$ billion


* Including 10% of total number of engines installed on airplanes as spare engines.


138

Intentionally Blank


139

12. Methodology

Passenger Forecast Methodology

The demand forecasting flow is divided into three sections (air traffic, open ASK, and aircraft

sales forecast) as shown below:

Forecasted air traffic demand (RPK) is calculated using an econometric method as a function

of GDP and yields, because it is strongly affected by the correlation between income and fares.

However, RPK can change significantly because of various events, such as major shifts in

aviation policies (e.g. liberalization of air transport), new entry of LCCs, and development of

other transportation modes (e.g. high-speed railways). Given the difficulty of forecasting future

demand based only on the correlation of GDP and yields, JADC forecasts RPK by considering

the impact of possible future events as well as by conducting an analysis based on causal

models using GDP and passenger yields. The RPK forecast is categorized by region (13 regions)

and distance (4 segments).

The available transportation capacity to be delivered in the future (open ASK) is calculated by

the retirement forecast of existing aircrafts as well as the forecast of the available transportation

capacity necessary to transport the air traffic demand which is calculated by macro analysis. The

forecast is categorized by region (13 regions) and distance (4 segments), as well as by seat size

(15 segments).

The number of aircraft that will be delivered in the future is calculated based on the open

ASK, aircraft performance (number of seats per aircraft, cruise range etc.) and sales capacity of

each manufacturer, then aggregated by category.


140

Cargo Forecast Methodology

Cargo demand forecasting flow is divided into three sections (traffic forecast, capacity

forecast and freighter forecast) as shown below:

Air cargo demand is known to have a correlation with GDP and cargo yields as is the case

with the passenger aircraft demand. JADC forecasts the air cargo demand by analyzing past data

based on causal models using GDP and real cargo yields and by evaluating various factors that

affect the air cargo demand considering present and future trends. After consolidating the global

flight routes into 33 markets, the air cargo demand is forecasted by market.

A forecast for supplied transportation capacity of cargo freighters is calculated using a

macroeconomic forecasting method (Top Down Analysis), in which the forecast is categorized

by region (7 regions) and payload (3 segments). Air cargo is transported by cargo freighters or

in the lower deck hold of passenger aircrafts. The forecasts of the cargo transport demand (as

RTK) and supplied transportation capacity (as ATK) of cargo freighters can be calculated by

deducting the lower hold capacity of those passenger aircrafts from the results of the forecasted

air cargo demand. The RTK and ATK of those passenger aircrafts are estimated based on the

results of the forecasted passenger aircraft demand.

Air cargo transport volume = Cargo transport volume carried in the lower deck hold of

passenger aircrafts + Cargo transport volume carried by freighters

By analyzing the fleet composition by aircraft type and flight routes and simulating the

service life of freighters, the supplied transportation capacity needed in the future is forecasted

by category. The forecasted number of aircrafts to be sold is calculated by allocating the

supplied transportation capacity needed in the future to specific aircrafts in view of aircraft

performance, including payloads and cruising distance, and the ratio of newly-built aircrafts and

converted freighters.

Cargo Demand

Economic Forecast

(GDP)

YieldForecast

Cargo Capacityneeded

FreighterCapacityneeded

FreighterDemand

Production Freighter Deliveries

Lower HoldCapacity

PassengerForecast

Retirement

Converted Freighter

Network Analysis

FleetAnalysis

Traffic Forecast Capacity Forecast Freighter Forecast

Freighter Demand Forecast Flow Chart


141

Appendix A : Definitions of Airplane Category

Passenger Turboprops

　　15－19 seats DHC6-400, Do228, BE1900, L410

　　20－39 seats DHC8-200, Saab 340, Do328, Su-80

　　40－59 seats ATR42, DHC8-300, An-140, MA60/600

　　60－79 seats ATR72, DHC8-400, Il-114

　　80－99 seats (ATR92)

Passenger Jets

Regional Jets

　　20－39 seats ERJ135, Do328JET

　　40－59 seats CRJ100/200, ERJ140/145

　　60－79 seats CRJ700, E170, E175, MSJ M100, An-148,

　　80－99 seats CRJ900/1000, E175E2, E190/E2, MSJ M90, ARJ21, SSJ100

　Narrowbody

　　100－119 seats A220-100, E195/E2, A318, 717, 737-600,

　　120－169 seats A319ceo/neo, A320ceo/neo, 737-700/-800, 737MAX-7/-8,

A220-300, 727, C919-200, MS21-200/-300, Tu234

　　170－229 seats A321ceo/neo～XLR, 737-900ER, 737MAX-9/-10, 757,

　Widebody

　　230－309 seats 787-8/-9, A330ceo/neo, 767, A300, A310, MD-11, Il-96

　　310－399 seats A350-900/-1000, 787-10, 777-8/9, 777, A340

　　400－499 seats 747

　　　>500 seats A380

Jet Freighters

　　Narrowbody (< 50 ton) A320, A321, BAe146, CRJ100/200, DC-8, DC-9, MD-80,

707, 727, 737, 757, Tu-204

　　Medium Widebody (40-70 ton) A300, A310, A330, DC-10-10, L-1011, 767, 787, Il-76

　　Large (>70 ton) A350, DC-10-30/-40, MD-11, 747, 777, An-124, An-225

Note: Aircraft are segmented according to number of seats based on 1-class seat configuration for 99 seats or less, 2-class seat configuration for 100–229 seats, and 3-class seat configuration for 230 seats or more.


142

Appendix B : Definitions of Aero Engine Category

Engine ManufacturerThrust

(x1000 lb)Aircraft Type (No. of Engines)

65～115 CF6-80E1 GE/SNECMA 67～72 A330(2)

GEnx GE 67～73 B787(2), B747-8(4)

GE90 GE/SNECMA 75～115 B777(2)

GP7000 GE/PW 76～82 A380(4)

PW4000-100 PW 64～70 A330(2)

PW4000-112 PW 74～98 B777(2)

TRENT 700 RR 67～71 A330(2)

TRENT 800 RR 75～95 B777(2)

TRENT 900 RR 68～84 A380(4)

TRENT 1000 RR 64～74 B787(2)

TRENT 7000 RR 68～72 A330neo(2)

TRENT XWB RR 83～92 A350XWB(2)

CF6-50 GE/SNECMA 46～54 B747(4), A300(2)

CF6-80A GE/SNECMA 48～50 B767(2), A310(2)

CF6-80C2 GE/SNECMA 52～62 B747(4), B767(2), A300-600(2), A310(2)

MD-11(3)

JT9D PW 43～56 B747(4), B767(2), A300(2), A310(2)

PW4000-94 PW 52～68 B747(4), B767(2), A300-600(2), A310(2)

MD-11(3)

RB211-524G/H RR 58～61 B747-400(4), B767-300(2)

TRENT 500 RR 56 A340-500/600(4)

PW2000 PW 38～42 B757(2)

RB211-535C/E4 RR 37～43 B757(2)

12～35 V2500 IAE 22～30 A319(2), A320(2), A321(2), MD-90(2)

CFM56 CFM INT'L 18～34 B737-300/400/500(2),

B737-600/700/800/900(2)

A318(2), A319(2), A320(2), A321(2),

A340-200/300(4)

LEAP-1 CFM INT'L 18～33 A319neo(2), A320neo(2), A321neo(2),

737MAX(2), C919(2)

PW1000G PW 15～35 MSJ M100/90(2), A220-100/300(2), MS-21(2)

A319neo(2), A320neo(2), A321neo(2)

E175E2(2), E190E2(2), E195E2(2)

JT8D-200 PW 18～21 MD-80(2)

PW6000 PW 20～23 A318(2)

BR700 BMW/RR 18～22 717(2)

SMI46 SNECMA/NPO 17.4 SSJ100(2)

～12 CF34 GE 8.6～20 CRJ100/200(2), CRJ700(2), CRJ900(2), CRJ1000(2)

E170(2), E175(2), E190(2), E195(2),

ARJ21(2)

AE3007 ALLISON 7.2～12 ERJ135(2), ERJ140(2), ERJ145(2)

PW300 PWC 4.2～5.7 328JET(2)

CT7 GE 1700～1940 SHP CN235(2), SAAB340(2), L610(2)

PW100 PWC 2000～5000 SHP ATR42(2), ATR72(2),

DHC8-100(2)/300(2)/400(2), Do328(2)

EMB120(2)

PT6A PWC 700～1300 SHP DHC-6-400(2), BEECH1900

TPE 331 GARRETT 700～1100 SHP CASA212(2), Metro(2), Do228(2)

Turboprop

ThrustCategory(x1000 lb)


143

Appendix C : Air Passenger Traffic

Region

1999 2019 2039 2020-2039

North America 1,121 1,923 3,564 3.1%

Europe 928 1,975 4,323 4.0%

Western Europe 912 1,877 3,942 3.8%Eastern Europe 16 98 381 7.0%

Asia-Pacific 714 2,903 7,407 4.8%

Japan 166 204 356 2.8%China 130 1,333 3,345 4.7%Northeast Asia 98 232 359 2.2%Southeast Asia 175 648 1,892 5.5%South Asia 46 275 1,076 7.1%Oceania 99 211 380 3.0%

Middle East 86 774 1,713 4.1%

Latin America 139 442 802 3.0%

Africa 68 180 354 3.4%

CIS 55 290 500 2.8%

World 3,111 8,486 18,664 4.0%

Average AnnualGrowth RateRPK ( ×10 9 person km)


144

Appendix D : Air Cargo Traffic

Market

Average AnnualGrowth Rate

1999 2019 2039 2019-2039

Intra Africa 0.3 0.8 1.7 3.4%

Intra Asia Pacific 12.3 41.2 107.2 4.8%

Intra Europe 2.7 6.2 10.0 2.3%

Intra Latin America 0.4 1.8 2.6 1.8%

Intra Middle East 0.5 1.3 3.1 4.5%

Intra North America 14.0 25.2 29.9 0.7%

Africa - Asia Pacific 0.3 1.3 3.7 2.8%

Africa - Europe 3.2 5.5 9.6 2.7%

Africa - Middle East 0.2 2.8 9.1 5.9%

Asia Pacific - Europe 23.2 38.7 87.8 3.6%

Asia Pacific - Middle East 1.1 14.2 48.6 6.2%

Asia Pacific - North America 15.5 52.3 105.3 3.4%

Europe - Middle East 2.2 12.6 24.3 3.2%

Europe - Latin America 3.9 7.2 14.6 3.5%

Europe - North America 17.3 23.5 36.6 2.1%

Latin America - North America 2.8 6.9 15.9 4.2%

Rest of World 1.3 16.5 23.4 1.6%

World 96.9 267.0 543.2 3.5%

RTK（ ×10 9 ton km）


145

Appendix E : Airplane Demand Forecast

Changes in Airplanes and Sales by Region

Changes in Airplanes and Sales by Airplane Capacity

Region 2019 Fleet Retire Convert New Deliveries 2039 Fleet Value (US$B)

(new build only)

North America Total 8,319 7,189 526 8,495 10,151 1,145 Passenger Turboprop 672 559 － 474 587 9

Passenger Jet 6,697 5,891 － 7,664 8,470 1,041

Jet Freighter 950 739 526 357 1,094 96

Europe Total 5,802 4,542 188 8,188 9,636 1,244 Passenger Turboprop 571 413 － 512 670 12 Passenger Jet 4,931 3,898 － 7,595 8,628 1,210 Jet Freighter 300 231 188 81 338 23

Asia-Pacific Total 9,148 5,813 475 16,115 19,925 2,362 Passenger Turboprop 1,096 682 － 1,925 2,339 43 Passenger Jet 7,686 4,863 － 13,967 16,790 2,239 Jet Freighter 366 268 475 223 796 80

Middle East Total 1,454 1,049 75 2,352 2,832 573 Passenger Turboprop 45 26 － 47 66 1 Passenger Jet 1,328 995 － 2,217 2,550 539 Jet Freighter 81 28 75 88 216 33

Latin America Total 2,011 1,588 128 2,405 2,956 254 Passenger Turboprop 448 356 － 453 545 8 Passenger Jet 1,449 1,125 － 1,915 2,239 236 Jet Freighter 114 107 128 37 172 10

Africa Total 1,392 1,127 89 1,371 1,725 156

Passenger Turboprop 520 425 － 433 528 8

Passenger Jet 807 647 － 917 1,077 142

Jet Freighter 65 55 89 21 120 6CIS Total 1,495 1,160 90 1,539 1,964 193

Passenger Turboprop 231 181 － 234 284 4 Passenger Jet 1,117 863 － 1,266 1,520 176 Jet Freighter 147 116 90 39 160 12

World Total 29,621 22,468 1,571 40,465 49,189 5,927 Passenger Turboprop 3,583 2,642 － 4,078 5,019 85 Passenger Jet 24,015 18,282 － 35,541 41,274 5,582 Jet Freighter 2,023 1,544 1,571 846 2,896 260

Airplane Category 2019 Fleet Retire Convert New Deliveries 2039 Fleet Value (US$B)

(new build only)

Passenger Turboprop 15-39 seats 1,736 1,574 － 1,563 1,725 19 40-59 seats 589 494 － 568 663 12 More than 60 seats 1,258 574 － 1,947 2,631 17 Total 3,583 2,642 4,078 5,019 85

Passenger Jet 20-59 seats 1,064 1,062 － 0 2 0 60-99 seats 2,340 2,006 － 2,744 3,078 92 Regional Jet (subtotal) 3,404 3,068 － 2,744 3,080 92 100-119 seats 580 468 － 2,628 2,740 14 120-169 seats 12,534 9,103 － 10,799 14,230 85 170-229 seats 2,823 2,184 － 11,562 12,201 1,575 Narrowbody (subtotal) 15,937 11,755 － 24,989 29,171 1,674 230-309 seats 2,582 1,827 － 4,332 5,087 108

310-399 seats 1,697 1,338 － 3,457 3,816 1,305

More than 400 seats 395 294 － 19 120 8

Widebody (subtotal) 4,674 3,459 － 7,808 9,023 1,422

Total 24,015 18,282 － 35,541 41,274 3,188

Jet Freighter Narrow Body 748 746 1,125 0 1,127 0 Medium Widebody 649 477 187 396 755 95 Large 626 321 259 450 1,014 166 Total 2,023 1,544 1,571 846 2,896 260


146

Fleet and New Deliveries by Region

2019 Fleet

North America Europe Asia-Pacific Middle East Latin America Africa CIS World

Passenger Turboprop 15-39 seats 401 207 432 10 279 308 99 1,736 40-59 seats 109 53 153 9 74 86 105 589 More than 60 seats 162 311 511 26 95 126 27 1,258Total 672 571 1,096 45 448 520 231 3,583

Passenger Jet 20-59 seats 759 58 9 11 51 109 67 1,064 60-99 seats 1,239 371 318 40 133 75 164 2,340 Regional Jet (subtotal) 1,998 429 327 51 184 184 231 3,404 100-119 seats 179 131 64 12 71 45 78 580 120-169 seats 2,706 2,889 4,603 476 941 397 522 12,534 170-229 seats 1,120 509 883 62 95 7 147 2,823 Narrowbody (subtotal) 4,005 3,529 5,550 550 1,107 449 747 15,937 230-309 seats 458 542 1,015 239 132 116 80 2,582 310-399 seats 231 308 682 342 26 58 50 1,697 More than 400 seats 5 123 112 146 0 0 9 395 Widebody (subtotal) 694 973 1,809 727 158 174 139 4,674Total 6,697 4,931 7,686 1,328 1,449 807 1,117 24,015

Jet Freighter Narrow Body 273 140 182 3 85 38 27 748 Medium Widebody 400 71 49 23 28 15 63 649 Large 277 89 135 55 1 12 57 626Total 950 300 366 81 114 65 147 2,023

2039 Fleet


Passenger Turboprop 15-39 seats 296 161 649 13 264 206 136 1,725 40-59 seats 63 64 249 4 111 107 65 663 More than 60 seats 228 445 1,441 49 170 215 83 2,631Total 587 670 2,339 66 545 528 284 5,019

Passenger Jet 20-59 seats 2 0 0 0 0 0 0 2 60-99 seats 1,511 394 661 50 203 74 185 3,078 Regional Jet (subtotal) 1,513 394 661 50 203 74 185 3,080 100-119 seats 788 691 643 98 262 106 152 2,740 120-169 seats 2,306 2,869 6,404 634 1,022 394 601 14,230 170-229 seats 2,426 2,794 5,474 424 525 233 325 12,201 Narrowbody (subtotal) 5,520 6,354 12,521 1,156 1,809 733 1,078 29,171 230-309 seats 1,023 1,043 2,071 485 153 157 155 5,087 310-399 seats 414 818 1,501 795 74 113 101 3,816 More than 400 seats 0 19 36 64 0 0 1 120 Widebody (subtotal) 1,437 1,880 3,608 1,344 227 270 257 9,023Total 8,470 8,628 16,790 2,550 2,239 1,077 1,520 41,274

Jet Freighter Narrow Body 319 166 393 20 127 67 35 1,127 Medium Widebody 472 75 79 29 32 19 49 755 Large 303 97 324 167 13 34 76 1,014Total 1,094 338 796 216 172 120 160 2,896

2020-2039 New Deliveries


Passenger Turboprop 15-39 seats 279 148 590 11 251 182 102 1,563 40-59 seats 54 59 202 4 88 99 62 568 More than 60 seats 141 305 1,133 32 114 152 70 1,947Total 474 512 1,925 47 453 433 234 4,078

Passenger Jet 20-59 seats 0 0 0 0 0 0 0 0 60-99 seats 1,311 341 645 49 192 64 142 2,744 Regional Jet (subtotal) 1,311 341 645 49 192 64 142 2,744 100-119 seats 754 653 624 96 251 104 146 2,628 120-169 seats 2,033 2,195 4,507 520 777 305 462 10,799 170-229 seats 2,256 2,734 5,127 413 517 233 282 11,562 Narrowbody (subtotal) 5,043 5,582 10,258 1,029 1,545 642 890 24,989 230-309 seats 938 891 1,724 404 115 117 143 4,332 310-399 seats 372 780 1,332 726 63 94 90 3,457 More than 400 seats 0 1 8 9 0 0 1 19 Widebody (subtotal) 1,310 1,672 3,064 1,139 178 211 234 7,808Total 7,664 7,595 13,967 2,217 1,915 917 1,266 35,541

Jet Freighter (New Build) Narrow Body 0 0 0 0 0 0 0 0 Medium Widebody 236 47 47 12 25 12 17 396 Large 121 34 176 76 12 9 22 450Total 357 81 223 88 37 21 39 846


147

Appendix F Evaluation of Secondary Deliveries

These demand forecasts for the next 20 years are calculated without including the number of

airplanes delivered within the forecast period and retired early within that period in that the

average retirement age of production airplanes has been around 25 years so far (longer than the

forecast period). However, in recent years, some groups of airplanes, though not many, have

begun to be retired before they reach 20 years old. It is surmised that these airplanes were

operated with high frequency by LCCs or FSCs on short-haul domestic routes. Considering the

recent boom in LCCs, the number of airplanes that retire at a younger age may increase in the

future. Light orange bars in the graph show the number of units (secondary deliveries) that will

be delivered to replace them during the forecast period in order to keep the Fleet numbers

constant. (The secondary deliveries are not included in the number of units in this forecast.)

Of secondary deliveries, 1,630 units will be narrowbody airplanes with 100 to 229 seats and 435

units will be widebody airplanes with 230 or more seats, accounting for 6.5% and 5.6% of the

primary deliveries, respectively.

(Fleet : airplanes which will be in service at the beginning of the forecast period)

(Remaining : airplanes in the original fleet which will be in service at the end of the period)

(Primary retired : airplanes which will retire during the period* out of the initial Fleet)

(Primary deliveries : airplanes that satisfy replacement demand for primary retired airplanes and

those for new demand)

(Secondary retired : airplanes which will retire during the period* out of the primary deliveries)

(Secondary deliveries : airplanes that satisfy replacement demand for secondary retired

airplanes) (* 2020-2039)

0194

112

985

473 191242 20

2744 2628

10799

11562

4332

3457

192 334

112

3431

639 755 359 1011062

2006

468

9103

2184 18271338

294

‐2000

0

2000

4000

6000

8000

10000

12000

14000

16000

20 〜 59seats

60 〜 99seats

100 〜 119seats

120 〜 169seats

170 〜 229seats

230 〜 309seats

310 〜 399seats

400seats

over

Passenger Jet Fleet and Delivery Forecast by Seat Category

2340 25822823

12534

580

14230

27403078

2 395

1697

120

3816

5087

12201

1064

2039 Remaining

2020‐2039 Retired (Primary)

2020‐2039 Delivery (Primary)

2039 Fleet

2020‐2039 Delivery (Secondary)2019 Fleet


148

Appendix G Changes in Cargo Transportation Results by Major Airlines (2006-2018)

This page shows the detailed version of the graph “Air Cargo Traffic Trends for Major Airlines”

in Chapter 7.2, Page 77.

0

2

4

6

8

10

0 2 4 6 8 10 12 14 16

RTK

by Lower Deck Hold of Passenger Airplanes

(×10 9 )

RTK by Freighters (×10 9 )

Emirates Qatar Airways

Air France British Airways

Lufthansa Federal Express

Japan Airlines All Nippon Airways

Singapore Airlines Cathay Pacific Airways

China Airlines EVA Air

China Eastern Airlines China Southern Airlines

Air China Korean Air

Changes in Cargo Transportation by Major Airlines(2006-2018)

BA

Singapore

KAL

Cathay

Emirates

ANA

Qatar

AF

LH

FedEx

Source : IATA WATSJALC.South

C.East

China AL

EVA

A.China


149

Glossary of Terms

ASK or Available Seat Kilometers

Passenger transport capacity

The number of seats × Transportation distance (kilometers)

RPK or Revenue Passenger Kilometers

Transportation performance with revenue passengers on board and flown

The number of revenue passengers × Transportation distance (kilometers)

Passenger Load Factor

A numerical value indicating the ratio of the number of revenue passengers on board

to the total number of seats, that is, an indicator for measuring seat sales

Revenue passenger kilometers (RPK) ÷ Available seat kilometers (ASK)

Different from a boarding rate which does not include non-revenue passengers

Yield

Revenue per kilometer (or per mile) for one passenger

Obtained by “Passenger revenue ÷ Revenue passenger kilometers”

In the case of cargo, revenue per kilometer (or per mile) for one ton of cargo

Obtained by “Cargo revenue ÷ Revenue ton kilometers”

CASK or Cost per ASK

An indicator for cost per unit passenger transport capacity

Obtained as cost per seat kilometer (ASK)

ATK or Available Ton Kilometers

Air cargo capacity

Payload capacity (tons) × Transportation distance (kilometers)

RTK or Revenue Ton Kilometers

Transportation performance with revenue cargo on board and flown

Revenue Cargo (tons) × Transportation distance (kilometers)

Cargo load factor

Revenue ton kilometers (RTK) ÷ Available ton kilometers (ATK)


150

Abbreviations

A4A Airlines for America

AAPA Association of Asia Pacific Airlines

ACI Airports Council International

AEA Association of European Airlines

ASEAN Association of South-East Asian Nations

BRICs Brazil, Russia, India, China,

BTS Bureau of Transport Statistics, U.S. Department of Transportation

CAPA Centre for Asia Pacific Aviation

CIS Commonwealth of Independent States

COVID-19 Coronavirus diseases 19 (2019)

DOT U.S. Department of Transportation

EIA Energy Information Administration

ETS Emission Trading Scheme

EU European Union

FTA Free Trade Agreement

GDP Gross Domestic Product

HOM Heavy and Oversize air cargo Market

IATA International Air Transport Association

ICAO International Civil Aviation Organization

IEA International Energy Agency

JADC Japan Aircraft Development Corporation

JETRO Japan External Trade Organization

JICA Japan International Cooperation Agency

MLIT Ministry of Land, Infrastructure, Transport and Tourism

NIID National Institute of Infectious Diseases

OPEC Organization of Petroleum Exporting Countries

SARS Severe Acute Respiratory Syndrome

UIC International Union of Railways

UN United Nations

UNWTO UN World Tourism Organization


151

Abbreviations (cont.)

ASK Available Seat Kilometers

ATK Available Ton Kilometers

CASK Cost per ASK

FFP Frequent Flyer Program

FSC Full Service Carrier

LCC Low Cost Carrier

RASK Revenue per ASK

RPK Revenue Passenger Kilometers

RTK Revenue Ton Kilometers

TEU Twenty-Foot Equivalent unit


152

Reference Materials

In preparing the "Japan Aircraft Development Corporation, Commercial Aircraft Market

Forecast 2020 - 2039", the data and materials published by the following organizations and

groups were used.

AACO Arab Air Carriers Organization

AAPA Association of Asia Pacific Airlines

ACI Airports Council International

AEA Association of European Airlines

AFRAA African Airlines Association

ALTA Latin America & Caribbean Air Transport Association

A4A Airlines for America

BTS Bureau of Transport Statistics, U.S. Department of Transportation

CAAC Civil Aviation Administration of China

DOT U.S. Department of Transportation

EIA U.S. Energy Information Administration

ERAA European Regional Airline Association

EUROCONTROL European Organisation for the Safety of Air Navigation

IATA International Air Transport Association

ICAO International Civil Aviation Organization

IEA International Energy Agency

JETRO Japan External Trade Organization

MLIT Ministry of Land, Infrastructure and Transport of Japan

RAA Regional Airline Association

UN United Nations

Air Transport World Aviation Week

Aviation Daily Aviation Week

Cirium Cirium

IHS Connect IHS Markit

OAG OAG Aviation Worldwide Limited


5

The “Commercial Aircraft Market Forecast 2020 – 2039” can be found on our website at:

http://www.jadc.jp

Although this material is prepared based on various data which are believed to be reliable under

the present conditions, risk data and uncertainty factors are also included in past performance

data, and our association does not guarantee its accuracy and completeness in any way.

We are not responsible for any decisions made, or actions taken by users which are based on this

material, or any consequences thereof. Users should take personal responsibility for their own

decisions when referring to this forecast.

In addition, when copying this material, either in whole or in part, permission of the copyright

owner is required, so please contact us. Be sure to mention Japan Aircraft Development

Corporation when quoting.

Contact details:

Market Analysis Group


Naohiko Ito ([email protected])

Postal address:

Hibiya Kokusai Bldg. 7F

2-2-3, Uchisaiwai-cho

Chiyoda-ku, Tokyo

100-0011, Japan

TEL: 03-3503-3212

FAX: 03-3504-0368

URL: http://www.jadc.jp

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