Forecast Indicators

New airline business models and emerging economies

Each year, we begin our analysis for the Current Market Outlook by examining key industry indicators, including fuel, market liberalization, airline capabilities, airline strategies, emerging markets, economic growth, high-speed rail, and the environment. Worldwide economic activity is the most powerful driver of commercial air transport growth and the resulting demand for airplanes. The global gross domestic product (GDP) is projected to grow 3.2 percent per year for the next 20 years, driving both air passenger traffic and air cargo traffic to average 5.0 percent annual growth worldwide over the same period.

Global growth spurred by emerging economies

Emerging economies are projected to grow 5.2 percent per year over the next 20 years, outpacing established economies, which will average 2.1 percent growth. Emerging and developing economies will account for 60 percent of global growth between 2012 and 2032. Their share of real global GDP will increase from 31 percent to 45 percent over the same period. The fastest growing economies include Asia Pacific (projected 4.5 percent growth), Latin America (projected 4.0 percent growth), and the Middle East (projected 3.8 percent growth).

Household income will grow and consumption patterns will change as educated labor forces expand, investment in physical and social infrastructure increases, urbanization progresses, and the relative importance of economic sectors shifts within the world's emerging economies. With urbanization, the labor force shifts toward the industrial and service sectors, which spurs median incomes to converge toward the income levels of developed economies. The emerging global middle class will expect to enjoy standards of living comparable to those in developed economies. As demand for international goods and services rises and leisure time increases, appetite for travel will grow.

Business models and airline strategies

There is a need for 35,280 new airplanes, 41 percent of which will replace older airplanes and 59 percent will expand the fleet. Airline strategies and business models help determine the types of airplanes that airlines purchase and, consequently, the types of airplanes that manufacturers produce. Low-cost carriers drive the strong demand for new, efficient single-aisle airplanes. Their share of the market is expected to grow from 14 percent to 20 percent by 2032. International expansion of network carriers is driving demand for 8,590 new widebody airplanes, including 850 freighters, primarily large freighters such as the 747-8 Freighter and 777 Freighter.