Global airlines will need to buy 28,000 new aircraft worth US$4 trillion (Dh14.69tn) to meet the demand for air travel over the next 20 years, according to Airbus, the giant European planemaker.
In its latest Global Market Forecast, published yesterday, Airbus predicts the global passenger plane fleet will rise to more than 32,550 aircraft by 2031, from 15,500 today. The prediction is 1.3 per cent higher than Airbus anticipated last year.
In the same period, the world's freighter fleet will almost double from 1,600 to 3,000 aircraft.
During this time 10,350 aircraft will be replaced by new, more efficient designs.
Airbus' predictions compares with its competitor Boeing's July forecast for 34,000 planes valued at $4.5tn over the next 20 years. However, Boeing included demand for an estimated 2,020 regional jets Airbus did not count.
The Asia-Pacific area will account for 35 per cent of all new aircraft deliveries, said the Airbus survey, followed by Europe and North America with 21 per cent each. In value terms, the single biggest market will be China followed by the United States, the UAE and India.
"Aside from growth in international traffic, by 2031 four of the world's biggest traffic flows will all be domestic - in the US, China, western Europe and India," said John Leahy, the Airbus chief sales officer.
"In 20 years from now, China's domestic passenger traffic will overtake the US domestic traffic to become the number one traffic flow in our forecast. Aviation is not just essential for international commerce but also for domestic economies, too.
"Emerging economic regions will represent more than half of all traffic growth in the next 20 years," said the Airbus survey. "Increasing urbanisation and the doubling of the world's middle classes to 5 billion people is also driving growth.
By 2031 mega-cities will more than double to 92 and more than 90 per cent of the world's traffic will be between or via these points."
More than 1,700 very large aircraft with 400 seats and above, such as the A380 and the Boeing 747-8 will have been delivered by 2031, valued at $600 billion. Of these, more than 1,330 are passenger aircraft valued at some $500bn and the rest freighters.
Asia-Pacific leads demand for these high-capacity aircraft, with 46 per cent of the total, followed by the Middle East with 23 per cent and Europe at 19 per cent.
Demand for twin-aisle aircraft of 250 to 400 seats, such as the Airbus A330, the A350 XWB, the Boeing 787 Dreamliner and the Boeing 777 will stand at some 6,970 new passenger and freighter aircraft, valued at $1.7tn. Of these, 6,500 will be passenger aircraft. Again leading demand will be Asia-Pacific, again with 46 per cent, Europe with 17 per cent and North America with 13 per cent, the report said.
In the next 20 years, in excess of 19,500 single-aisle aircraft worth more than $1.6tn will be delivered. A third of deliveries will be in Asia-Pacific followed by North America with 25 per cent and Europe with 22 per cent. Some 30 per cent of all deliveries in this category will be for low-cost carriers.
As Airbus released its survey, Boeing announced it was raising its forecast for the Indian plane market yesterday, saying the country would need 1,450 new aircraft worth $175bn by 2031. Last year, Boeing forecast demand at 1,320 planes to 2030, worth $150bn.
"India will have the highest passenger-traffic growth in the world, higher than even China's in the next 20 years," said Dinesh Keskar, Boeing's senior vice president for Asia-Pacific and India, contradicting the Airbus prediction China's would be greater.
dblack@thenational.ae
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
THE SPECS
GMC Sierra Denali 1500
Engine: 6.2-litre V8
Transmission: 10-speed automatic
Power: 420hp
Torque: 623Nm
Price: Dh232,500
