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.
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Rolls-Royce, the world-leading provider of power systems and services for use on land, at sea and in the air, operates in four global markets - civil aerospace, defence aerospace, marine and energy. It is investing in core technology, capability and infrastructure that can be applied across these sectors to take a competitive range of products to market. These investments create high barriers to entry.
Rolls-Royce is a technology leader, employing around 36,000 people in offices, manufacturing and service facilities in 50 countries. Annual sales total £6.6 billion, of which 54 per cent are services revenues. The firm and announced order book is nearly £25 billion, which, together with demand for services, provides visibility of future levels of activity.