Economic rebound
The European commercial aviation market remained strong in 2010, despite losses from snow and volcanic ash closing airports and canceling flights. The Association of European Airlines reports that the total number of scheduled passengers carried by member airlines was up 2.7 percent in 2010, compared to the previous year. Over the same period, members of the European Low Fares Airline Association (ELFAA) experienced a 6.1 percent increase in passengers. European airlines in 2010 acquired more than 270 new airplanes, of which 79 percent were single aisle. European GDP rebounded in 2010, increasing by 2 percent over 2009.
Sustained growth is expected to continue over the next 20 years, with European airlines forecasted to acquire a total of 7,550 new airplanes valued at US$880 billion. A majority of the incoming aircraft are expected to be single aisle, which will account for approximately 75 percent of the total fleet.
Europe is an economically diverse region, with both mature nations as well as newer, high-growth economies. Despite areas of uncertainty, Europe's overall GDP is expected to continue to grow at an average rate of 2 percent per year. The European Union's efforts to pursue transport liberalization are contributing to this growth, with negotiations taking place with Turkey, Brazil, India, Korea, and other countries.
Leading strategic change
Airline operations continue to change as new ventures are launched and new business models are applied. Additional mergers and acquisitions are expected over the next 20 years, along with increased emphasis on collaboration with alliance partners around the world.
There is a trend among large network airlines to shift their focus away from short-haul routes that are targeted by low-cost carriers and focus instead on longer haul routes. In 2010, network carriers announced new routes or increased service to cities such as Buenos Aires, Quito, Guayaquil, Miami, San Juan, Haneda, Singapore, and Rio. Meanwhile, low-cost carriers have continued to add service in the short-haul markets, with ELFAA members in 2010 providing 30 percent of capacity on intra-Europe flights.
Environment
European airlines are continuing to reduce their environmental impact. In part, this is being done by replacing older, less efficient airplanes with newer technology planes such as the 787 Dreamliner. By the end of our 20-year forecast period, more than 94 percent of the jetliners acquired by European airlines will have been delivered as new.
