Airbus 2010 Annual Report Download - page 50

THE BIG PICTURE
28
EADS ANNUAL REVIEW 2010
Customers outside Europe
and North America drive new growth
With the rise in importance of emerging countries,
aerospace and defence companies are globalising
their businesses, seeking further orders from these
rapidly growing countries, while also outsourcing
some production to them.
China remains the world’s fastest growing economy.
The IMF anticipates growth of 10.5% in 2010. India is also
growing strongly, with 9.7% projected for 2010, while Brazil
led Latin America’s expansion, achieving 7.5% growth.
Developing Asia and Latin America & the Caribbean
are expected by the IMF to grow at 9.4% and 5.7%,
respectively, during 2010, with strong private sector
demand signifying that recovery is sustainable.
By contrast, Central and Eastern Europe is forecast to
expand at a rate of 3.7% — only a little above the rate
of developed economies.
High value creation amongst Asia-Pacific airlines
As wealth rises, so air traffic is expanding. IATA
forecasts that global passenger numbers will rise from
2.5 billion in 2009 to 3.3 billion by the end of 2014, with
360 million of the 800 million increase occurring in the
Asia-Pacific region.
Already the Asia-Pacific region’s rapidly growing airlines
are the world’s most profitable. IATA reported that they
earned profits of US$ 7.6 billion in 2010, nearly half
the global industry’s total. As of 2010, Air China is the
world’s biggest airline by stock market capitalisation,
at US$ 20billion, followed by Singapore Airlines at
US$ 14billion, Cathay Pacific at US$ 12 billion and China
Southern at US$ 11 billion.
In anticipation of future growth, emerging market airlines
are ordering large numbers of new aircraft.
Asia-Pacific and Middle Eastern customers now account
for approximately half of EADS’ order backlog — with
the majority of these orders being for Airbus aircraft.
As recently as 2002, these regions contributed only 10%
of EADS’ revenues. According to PricewaterhouseCoopers,
by 2028 regions outside Europe and North America will
own roughly half of the commercial aircraft in service.
According to data gathered in Airbus Global Market
Forecast 2010, in developed economies such as Europe
or the United States, on average around one to two air
trips were made per person per annum in 2009. Emerging
countries such as China (approx. 0.2 trips) and India (less
than 0.1 trips) continued to trail far behind. Air travel in
those countries is expected to increase significantly as
dynamic growth translates into higher standards of living.
Industrial interests on the agenda
As well as bringing new market opportunities,
emerging countries offer benefits of a broader supply
chain and a wider talent pool.
Developing an industrial footprint takes longer in aerospace
than in many other high-tech sectors. Aerospace and
Emerging economies leading the recovery
A320neo EC225 A380 in Hong Kong