Asia-Pacific Continues to Be a Primary Contributor in Commercial Aviation Market

The market of the Asia-Pacific region is the most promising and dynamically developing in the world. This statement is agreed with the largest aircraft manufacturers including Airbus and Boeing, the Russian state United Aircraft Corporation (UAC), and the industry research company Flight Ascend Consultancy. By the way, most of the famous companies would like to fight for this region, despite the complicated steps in the tender process . So, let’s find out more about the current situation in the commercial aviation market in the Asia-Pacific region.

Statistics

Over the past decade, the Asia-Pacific region has surpassed the world average in many key drivers closely correlated with industry growth, such as GDP, income growth, and world trade. Moreover, the region’s vast geographical area, including many island nations, generates a strong demand for air travel. Today, roughly one-quarter of world air travel is flown within Asia, the highest share of intra-regional air travel globally. Boeing forecasts Asia traffic’s share will increase to almost 35 percent of all global air travel over the next 20 years.

The factors for the increase in the aviation market of the Asia-Pacific region and China are the same as for other sectors: economic growth, population growth, and increasing its well-being. By 2030, three of the five largest economies will be located in the Asia-Pacific region: China will take the 1st place, Japan ⏤ 4th place, Indonesia ⏤ 5th place, and neighboring India will take 3rd place.

In total, these factors will ensure the growth of aviation traffic. It is expected that the passenger turnover in the Asia-Pacific region and China will increase to 6.68 trillion passenger-kilometers, having increased 2.7 and 3.3 times over 20 years, respectively. World average growth will be 2.4 times to 17.1 trillion passenger-kilometers.

According to the Boeing , the share of all new airplanes that will be delivered to the Asia-Pacific region will be equal to 40%, as well as 21% will be the share of widebody airplanes in the total Asia-Pacific 2038 fleet. Driven by continued market fragmentation, the widebody fleet is projected to more than double in the next 20 years. More detailed information is presented below:

The Peculiarities of the Region

The geographical conditions of the Asia-Pacific region dictate additional requirements for aircraft: it is necessary to base on high-altitude airfields and operate in high temperature and humidity conditions. These requirements are laid down in the design of SSJ100 and MS-21. True, some of the parameters will need to be additionally confirmed during the tests. As a rule, after receiving a type certificate, the developer gets additions to this document, adapting the products to the requirements of new customers and gaining access to new markets. The type certificate issued by the Interstate Aviation Committee, validated by the European Union’s regulator European Aviation Safety Agency (EASA), is recognized in Mexico, Indonesia, and Egypt. In January 2015, the GSS filed an application with the Chinese Civil Aviation Administration for the recognition of an SSJ100 type certificate by the Chinese aviation authorities. The issue of certification of the Russian-French SaM146 engine, which is installed in the SSJ100, is also being addressed. It has already been approved by EASA.

More Aircraft

Since traffic will increase, the region will need new aircraft. By 2036, 11,840 narrow-body airliners (60–90 seats), 270 regional aircraft (more than 90 seats), as well as 3,620 wide-body machines (with two aisles between the rows of seats) will be required in Asia-Pacific region, Boeing expects. This is half of the entire fleet of the world today.

In total, 41,800 vessels will be needed in the next 20 years, of which 40% will be needed in the Asia-Pacific and China. China will need 7,580 new passenger aircraft, including 5,425 medium-haul (with a capacity of more than 120 seats), 1,030 wide-body (with a capacity of 200–325 seats) and 205 large wide-body airliners. Other countries in the Asia-Pacific region need another 8625 aircraft, 5695 of which are narrow-body, and 1965 are wide-body.

The specificity of the Asia-Pacific market is in the increased interest in long-haul aircraft: about 6% more than the market average. The reason is the geographical distance from the world's largest economic and cultural centers.

Conclusions

Civil aviation is a rapidly growing science-intensive industry, which has a significant impact on the development of the modern economy and its normal functioning. To quantify its impact, you can rely on the value of the contribution of aviation to global GDP. A similar analysis can also be carried out on the level of individual regions of the world, knowing their share in the air transportation market.

Demand for air travel depends on many factors, the main of which is the dynamics of changes in GDP. In research on the impact of GDP growth on growth of the number of completed passenger-kilometers by calculating the coefficient correlation, it was found that there is a strong force communication between these two indicators. By calculating the covariance coefficient, it was shown that with the growth of one indicator, there is a growth of another and vice versa.

Forecasting is of importance in the development of the air transport market. This encompasses the needs for new aircraft by a certain date. To develop a similar forecast

it’s useful to know the write-off rate of old aircraft, the planned average annual growth rate of demand for air transportation and changes in the occupancy rate of passenger seats and

load factor.

It is worth to admit that China is projected to become the world’s largest aviation market in the near future. It will require nearly 8,100 new airplane deliveries over the next 20 years, the largest share of any country in the world.

Asia-Pacific is also home to some of the fastest-growing economies in the world, where strong economic and disposable income growth are combining with new airline strategies and business models to spur above average air travel growth. Despite the heterogeneity in the region, many key structural demand forces will drive 5.5 percent average annual air traffic growth for carriers in the region over the next two decades.