Market Outlook
17 July, 2006
CONTINUING ASIA PACIFIC DEMAND TO DRIVE $600 BILLION ENGINE MARKET OVER NEXT
TWO DECADES, SAYS ROLLS-ROYCE
* Predicted Asia Pacific growth 6.6 per cent year-on-year
* 250-350 seaters lead sector demand
* Sustained growth in large widebodies
* New product launches to drive strong corporate jet market
Rolls-Royce expects continuing, strong growth throughout Asia Pacific to
underpin global demand for 51,000 new commercial aircraft, ranging from
business jets to high-capacity airliners, over the next 20 years.
Unveiling its updated civil market forecast on the opening day of the UK's
Farnborough International Airshow, Rolls-Royce said the 114,000 jet engines
required to power the global fleet's growth would have a potential value of
$600 billion.
The company believes that high fuel prices will drive airlines to focus even
harder on operating cost benefits of highly efficient, new-generation
jetliners.
Rolls-Royce, which produces an independent forecast using a wide range of
industry sources, expects air traffic demand in Asia Pacific to grow at an
average of 6.6 per cent year-on-year throughout the forecast period.
Within this estimate, growth in China over the next 20 years is anticipated to
be around 8 per cent per annum. Since the Outlook was last updated in March
2005, over 150 passenger jets have been delivered to Chinese operators. Demand
from China is expected to total 6,500 engines valued at $65 billion through to
2026.
India continues to be recognised as a major, emerging force in commercial
aviation. India is included within the Asia Pacific forecast total, but is
expected to provide a potential market in its own right for at least 1,600
engines in the next two decades.
The North American market, although growing more slowly than other regions,
remains the largest market for single-aisle aircraft and business jets. Much of
the demand is underpinned by the need to replace existing aircraft, giving a
market for around 20,000 engines for mainline and regional aircraft, and 30,000
engines for business jets - worth a total of $160 billion.
Rolls-Royce re-iterates its view that fleets in the CIS and Russia will produce
significant growth, creating a 20-year demand for 3,000 engines. Although used
aircraft are expected to feature widely in the business mix, the growth will
nevertheless have the effect of generating liquidity in the wider market.
The forecast anticipates the single aisle, 110-180 seat segment will create the
largest unit demand with anticipated demand for 29,000 engines worth $185
billion.
The largest sector by value, however, is viewed as that involving small and
medium twin-aisle aircraft of 250-350 seats, triggering engine sales worth $230
billion, with 40 per cent of the demand coming from Asia.
Rolls-Royce also expects to see strong and growing demand for aircraft in the
400 seats plus category. The Outlook points to a potential $85 billion engine
market in this sector, including those needed to power the growing cargo fleet.
Rapid growth in the large business aircraft sector is seen as a major factor
within the corporate jet market, which is expected to generate a requirement
for 51,000 engines with a value of $70 billion.
The forecast in full can be accessed on the Rolls-Royce website,
www.rolls-royce.com/civil_aerospace/overview/market/outlook/default.jsp
For further information contact:
Martin Johnson
Vice President, Communications
Rolls-Royce Civil Aerospace
Email: martin.johnson@rolls-royce.com
Farnborough International Airshow
Hall 4, Stand G17
Chalet D1-4, Row B
Tel: +44 (0)1252 523610