Industry Forecast Analysis

Industry Forecast Analysis
Name
Course
Instructor
Date
Background
The growing demand for aircrafts has been consistent in the developed nations, but there is a steady rise in the demand in the emerging market as the standards of living improve. This is consistent with the projections that as people move into cities and urban areas, the rise in the numbers of those with higher disposable income will translate into higher demand for aircraft fleets. The economy also influences the changes in the air cargo traffic change, with a slowdown in the airline industry in 2009 having occurred during the global financial crisis. Despite the projected growth in the industry, the long-term growth trend is likely to slow down (Boeing, 2012).
Data and Statistics
The air cargo traffic was 202.4 billion revenue tonne-kilometers (RTKs) in 2011 and expected to increase to 558.3 billion RTKs in 2031 (Boeing, 2012). In 2011, it was estimated that there 10.5 trillion RTKs containership cargo traffic compared to the global air cargo traffic of 202 billion RTKs in the same year (Boeing, 2012). The aviation industry forecasts mainly focus on the GDP as the explanatory variable to changes in the industry. The other main indicators are the number of passengers, airline traffic, cargo traffic and airplane fleet (Boeing, 2014) In 2012 there were 42 aviation mega- cities, and this would likely increase to around 89 mega- cities in 2032, representing 0.8 million daily passengers for the long haul traffic to, from or through the megacities in 2012 (Airbus, 2013). The number of regional jets in 2013 was 2,620, and would only grow marginally in twenty years (Boeing, 2014).
Projections
The number of dedicated freighters is estimated to increase from 1645 to 2905 in the years 2012 to 2032, representing a 77 % rise (Airbus, 2013). The increase in the world containership traffic is also estimated to outpace the air cargo growth, and the industry has grown steadily over time (Boeing, 2012). Despite projections for growth in the air transport and aircraft size, there will still be ageing aircrafts that will need to be replaced especially in the American and European markets. The demand for the larger passenger aircraft in the next two decades is projected to be strong in the Asia-Pacific region with continued growth in the economies (Airbus, 2013).
Accuracy of forecasts