Airbus 2015 Annual Report Download - page 62

AIRBUS GROUP REGISTRATION DOCUMENT 2015 l 30 l
Informationon GroupActivities
1.1 Presentation of the Group
significant demand between the major hub cities, which are
often among the world’s largest urban centres (such as London,
Paris, New York and Beijing). Airbus has identified 47major
hub cities in its current market analysis, with this number
expected to grow to over92 by 2034. Airbus believes that it is
well positioned to meet current and future market requirements
given its complete family of products.
Alliances. The development of world airline alliances has
reinforced the pattern of airline network development described
above. According to data from Ascend, a UK-based aviation
industry consultancy, just over one-third of the world’s jetliner
seats being flown today are operated by just 13 airlines as of
January2016. In the 1990s, the major airlines began to enter
into alliances that gave each alliance member access to the
other alliance members’ hubs and routings, allowing airlines to
concentrate their hub investments while extending their product
offering and market access.
Market Structure and Competition
Market segments. According to a study conducted by Airbus,
a total of 17,350passenger aircraft with more than 100seats
were in service with airlines worldwide at the beginning of 2014.
Currently, Airbus competes in each of the three principal market
segments for aircraft with more than 100seats.
“Single-aisle” aircraft, such as the A320 Family, have 100 to
more than 200seats, typically configured with two triple seats
per row divided by one aisle, and are used principally for short-
range and medium-range routes.
“Twin-aisle” or “wide-body” aircraft, such as the A330 /
A350XWB Families, have a wider fuselage with more than
210seats, typically configured with eight seats per row and
with two aisles. The A330/ A350XWB Families are capable of
serving all short- to long-range markets.
“Very large aircraft”, such as the A380 Family, are designed to
carry more than 400passengers, non-stop, over very long-range
routes with superior comfort standards and with significant
cost-per-seat benefits to airlines, although such aircraft can
also be used over shorter ranges in high-density (including
domestic) markets.
Freight aircraft, which form a fourth, related segment, are often
converted ex-passenger aircraft. See “— Regional Aircraft,
Aerostructures, Seats and Aircraft Conversion—EFW”.
Airbus also competes in the corporate, VIP business jet market
with the ACJ, an A319-based Corporate Jetliner, and the A318
Elite. As well as these, other members of the Airbus family can
serve the business jet market in private, corporate shuttle and
in government/ VIP roles.
Geographic differences. The high proportion of single-aisle
aircraft in use in both North America and Europe reflects the
predominance of domestic short-range and medium-range
flights, particularly in North America due to the development of
hubs following deregulation. In comparison with North America
and Europe, the Asia-Pacific region uses a greater proportion of
twin-aisle aircraft, as populations tend to be more concentrated
in fewer large urban centres. The tendency towards use of twin-
aisle aircraft is also reinforced by the fact that many of the
region’s major airports limit the number of flights, due either
to environmental concerns or to infrastructure constraints that
limit the ability to increase flight frequency. These constraints
necessitate higher average aircraft seating capacity per flight.
However, Airbus believes that demand for single-aisle aircraft in
Asia will grow over the next 20years, particularly as domestic
markets in China and India and low-cost carriers continue to
develop in the region. Aircraft economics will also help to drive
aircraft size, with airlines looking to reduce the cost per seat
through higher density aircraft cabins and the use of larger
aircraft types and variants where possible.
Competition. Airbus has been operating in a duopoly since
Lockheed’s withdrawal from the market in 1986 and Boeing’s
acquisition of McDonnell Douglas in 1997. As a result, the
market for passenger aircraft of more than 100seats is now
effectively divided between Airbus and Boeing. According to the
manufacturers’ published figures for 2015, Airbus and Boeing,
respectively, accounted for 45% and 55% of total commercial
aircraft deliveries, 58% and 42% of total net orders (in units), and
54% and 46% of the total year-end backlog (in units), an industry
record. Airbus commercial aircraft deliveries (635 in 2015) were
the 14thyear in a row of increased production at Airbus.
Nevertheless, the high technology and high value nature
of the business makes aircraft manufacturing an attractive
industry in which to participate, and besides Boeing, Airbus
faces aggressive international competitors who are intent on
increasing their market share. Regional jet makers Embraer and
Bombardier, coming from the less than 100-seat commercial
aircraft market, continue to develop larger airplanes (such as
the new 100- to 149-seat C-Series launched by Bombardier).
Additionally, other competitors from Russia, China and Japan will
enter the 70- to 150-seat aircraft market over the next few years.
Customers
As of 31December 2015, Airbus had 387customers and a
total of 16,351Airbus aircraft had been ordered, of which
9,520aircraft had been delivered to operators worldwide. The
table below shows Airbus’ largest commitments in terms of total
gross firm orders by customer for the year2015.
Customer Firm orders(1)
Indigo 250
Wizzair 110
Avianca 100
IAG Group 65
GECAS 60
Air Lease Corporation 59
International Air Finance Corporation
(Saudi Arabian Airlines) 50
(1) Options are not included in orders booked or year-end backlog.
Financial Statements 2015
11 22 33 44 55
QRegistration Document 2015
Annual Report 2015 Financial Statements 2015