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Airbus: A Positive Prediction of Global Economic Growth => 2030!

Airbus forecasts that the global freighter fleet is to be doubled till 2030, by signaling a very positive prediction about the global trade growth trends in the global economy, against the general negative mood of today’s analyses:

World freighter fleet to reach almost 3,000 aircraft in next 20 years …

According Airbus’ new Cargo Global Market Forecast, world-wide air freight traffic will grow by an average of 4.8 per cent annually over the next 20 years, almost doubling the required global freighter fleet to nearly 3,000 aircraft. This projected growth is driven by numerous positive global trends in economic activity, including world trade, private consumption, and industrial productionThe forecast shows that the overall worldwide air cargo demand by the year 2032 will require around 2,700 new and converted aircraft. Over half of these will be needed for fleet replacement – driven by current old aircraft retirements – with the remainder being for growth. Of these 2,700 aircraft, 870 will be factory-built freighters worth approximately US$234 billion, while around 1,860 will be converted from passenger aircraft. A further 175 in 2032 will be aircraft which are already in service as freighters today. Belly freight usage in passenger aircraft is taken into account – which will remain largely unchanged at around half of commercial air freight on international traffic. Andreas Hermann, Airbus’ Vice President, Head of Freighters says: “Looking forward after a difficult few years, world trade is showing improvements and diverse emerging markets will call for increased flexibility in air cargo transportation – for which mid-size freighters will be the primary means to achieve this.” He adds: “This is why Airbus forecasts that the core of future freighter requirements will be in the mid-size category, where modern-technology freighters will play a large part in future fleet replacement and long term growth.” Illustrating the rise of the emerging economies as the fastest growing markets for air cargo, Asia-Pacific (including India and the PRC) currently represents 36 per cent of the world freight traffic, increasing to 42 per cent by 2032. Overall, China is the single largest individual nation driving air cargo growth: Today China’s share represents 15 per cent, and by 2032 this will rise to around 22 per cent of the global air freight market. By comparison, the combined developed nations’ share in Europe/CIS and North America accounted for 51 per cent of the total traffic in 2012, and although traffic will continue to grow, by 2032 their combined share of total world freight traffic will reduce slightly, to around 45 per cent.

Airbus A380

In the other hand, the IMF predicts that the global economy is going to expand more slowly in 2013. The fund expects a 2.9% growth this year and a 3.6% economic growth in 2014:

IMF cuts global economic growth forecasts for this year and next

Badly handled budget cuts in the United States and a slowdown in activity in big developing countries mean the global economy will expand more slowly than expected this year, the International Monetary Fund has said. Revising down its forecasts for growth in both 2013 and 2014, the fund warned that the performance could be even more lacklustre and said the Federal Reserve, the American central bank, needed to take special care as it contemplated reducing its colossal stimulus to the world’s biggest economy. The IMF now expects the global economy to expand by 2.9% in 2013 and 3.6% in 2014 – down by 0.3 and 0.2 points respectively on its last predictions, made in July – despite signs of recovery in the euro area. ”Global growth is still weak, its underlying dynamics are changing, and the risks to the forecast remain to the downside,” the fund said in its World Economic Outlook (WEO). The half-yearly analysis of global trends was critical of the way across the board budget cuts had been handled in Washington, noting that they had contributed to weaker US growth. ”The US economy remains at the centre of events. Private demand continues to be strong, although growth has been hobbled this year by excessive fiscal consolidation,” Olivier Blanchard, the IMF’s economic counsellor, said. “Politics is creating uncertainty about both the nature and the strength of the fiscal adjustment. The sequester is a bad way to consolidate, and conflicts around increasing the debt ceiling could lead to another bout of destabilising uncertainty and lower growth.” IMF forecasts now show the US growing by 1.6% this year and 2.6% in 2014, down 0.1 and 0.2 points on its last estimates. Even so, it said it was time for the Fed to make plans for an exit from ultra-low interest rates and quantitative easing, the bond-buying strategy that has sought to pump credit into the US economy.

But, how can we define an emerging market? We have to look at two very basic factors: rapid economic growth and industrialization:

Emerging markets-Economic Growth – Wikipedia, the free encyclopedia

An emerging market is a nation with social or business activity in the process of rapid growth and industrialization. The economies of China and India are considered to be the largest. According to The Economist many people find the term outdated, but no new term has yet to gain much traction. Emerging market hedge fund capital reached a record new level in the first quarter of 2011 of $121 billion. The seven largest emerging and developing economies by either nominal or inflation-adjusted GDP are the BRIC countries (Brazil, Russia, India and China), as well as MIKT (Mexico, Indonesia, South-Korea and Turkey). The ASEAN–China Free Trade Area, launched on January 1, 2010, is the largest regional emerging market in the world. In the 1970s, “less developed countries” (LDCs) was the common term for markets that were less “developed” (by objective or subjective measures) than the developed countries such as the United States, Western Europe, and Japan. These markets were supposed to provide greater potential for profit, but also more risk from various factors. This term was thought by some to be politically incorrect so the emerging market label was created to hide the truth. The term is misleading in that there is no guarantee that a country will move from “less developed” to “more developed”; although that is the general trend in the world, countries can also move from “more developed” to “less developed”.

Finally, Airbus’ predictions offers an optimistic tone not only in the aviation industry but also in the global economy. Global trade is an important developmental factor and Airbus knows it well…

 



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