Brazil needs more than 700 new passenger aircraft by 2030 – study


Brazil will require 701 new passenger aircraft of more than 100 seats between today and 2030 as the country becomes the fourth largest domestic air travel market in the world, according to a new Airbus study.

Airbus says that the 501 single-aisle, 174 twin-aisle aircraft and 26 very large aircraft that will be required have an estimated value of US$82 billion.

By 2030, Brazil, the largest and fastest growing passenger market for Airbus in Latin America, will become the fourth largest domestic air travel market in the world with an annual growth rate of 7.4 percent, following the United States, China and India.

Brazil is currently ranked fourth in the world in terms of seats on departing flights, offering twice as many seats today than a decade ago. During the same time span, the country’s international and domestic air travel more than doubled, and as of 2010 Sao Paulo became the biggest gateway city for international travel to Latin America.

Looking ahead, the growth is only expected to continue, Airbus says. Between 2010 and 2030, the country’s GDP is expected to skyrocket 144 percent, 20 percent higher than the Latin America average.

Some of the trends driving Brazil’s air travel growth include outstanding economic growth, increased propensity to travel by air, driven by rapid growth of a travelling middle class and a growing tourism economy contributing to GDP growth.
“Brazil has become one of the world’s top 10 markets for new passenger aircraft in terms of aircraft deliveries over the next 20 years,” said Rafael Alonso, Executive Vice President of Airbus for Latin American and the Caribbean. “With international traffic to and from Brazil doubling over the past decade and showing no signs of slowing, Brazilian carriers have a tremendous opportunity to gain greater market share.”

In the past 10 years, tourism has contributed to Brazil’s GDP by nearly 200 percent and by 2020 it is expected to grow another 60 percent. Brazilian tourists are flying in some of the youngest aircraft fleet in the world. The average age of aircraft in Brazil with more than 100 seats is seven years, which is three years younger than the world and the regional average.

In Latin America, Airbus foresees a 20-year demand for more than 2,000 new passenger aircraft, including 1,653 single-aisle, 334 twin-aisle and 41 very large aircraft, estimated at approximately US$200 billion. Globally, by 2030 some 27,900 new aircraft valued at US$3.5 trillion will be required to satisfy future robust market demand.

With more than 600 aircraft sold and a backlog of nearly 300, over 400 Airbus aircraft are in operation throughout Latin America and the Caribbean. In the last 10 years, Airbus has tripled its in-service fleet, while delivering more than 60 percent of all aircraft operating in the region.

In June, Brazilian aircraft maker Embraer predicted world demand for 7 225 new jet deliveries in the 30- to 120-seat capacity segment over the next 20 years. The equivalent market value is estimated to be US$320 billion. Of this total, 3 125 jets are projected to be delivered between 2011 and 2020, and the remaining 4 100 units between 2021 and 2030.

Embraer predicted that North America will account for 33% of deliveries (2 350 aircraft), while Europe will buy 1 675 aircraft (23% of total), China will account for 13%, Latin America and the Asia Pacific each 9% and Russia and associated states 6%.

Meanwhile, Brazil is expected to become one of the tope ten defence spending nations by 2016, according to a new ASD Report. Brazil’s defence expenditure has grown faster than the majority of the world’s largest defence budgets, at a CAGR of 20.59% between 2005 and 2010, and it is expected to register further growth at a CAGR of 16.69% between 2011 and 2016.

Brazil has the highest defence expenditure in Latin America, and contributes 48% of the region’s total defence expenditure. This is mostly due to its protection of natural resources from illegal mining, deforestation and drug trafficking, as well as its high spending on pensions of former military personnel.

Brazil’s defence expenditure is expected to grow during the forecast period (2011-2016) due to Brazil’s aim to become the leading arms exporter in Latin America.

Brazil’s homeland security expenditure and product procurement is expected to increase during the forecast period to improve security for Brazil’s hosting of major international sporting events. Millions of spectators expected to attend the 2014 Football World Cup and 2016 Olympic Games, which will take place in Brazil, and will require additional security. The country has begun discussions with Israeli security companies in order to receive security services and technology in airports and transport systems.

Brazilian industries are co-operating with South Africa as part of the trilateral IBSA (India, Brazil and South Africa) agreement. Denel Dynamics is working alongside various Brazilian industry companies on the development of the A-Darter, a 5th generation, air-to-air-missile, to meet the needs of the air forces of South Africa and Brazil. In South Africa, the missile will be integrated to the SA Air Force’s Gripen and Hawk aircraft.

The A-Darter missile is a five year project with a value of more than R1-billion. Advanced testing of the infra-red air-to-air missile was completed earlier this year and the final products are due for delivery to the South African and Brazilian air forces in early 2013.

Brazil is looking to buy new fighter jets, something that has been described as a matter of urgency. France’s Dassault-built Rafale, Boeing’s F/A-18 Super Hornet and the Swedish Saab Gripen NG have long been vying for the estimated US$4-7 billion contract to renew Brazil’s dilapidated fleet of air force jets, Reuters reports.

The Brazilian government announced recently it would delay its decision until at least 2012 due to the escalating economic crisis.