Asia is world’s largest buyer of planes but still underserved on Population Per Aircraft Seat basis

5 February 2018, Global – Asia is now the world’s biggest buyer of aircraft, accounting for 34% of the total number of aircraft on order globally. China leads with 1,248 aircraft on firm order, followed by India and Indonesia. More importantly, by the time all the firm aircraft orders are delivered, Asian owners will have the largest share of the global aircraft capacity, overtaking Europe and North America. Despite staggeringly high aircraft orderbook-to-fleet ratios (over 200% for India, Indonesia, Vietnam, Malaysia), Asia remains underserved with one aircraft seat for every 3000 persons. This will fuel the need to order more aircraft, increasing Asia’s lead over the rest of the world, emerging as the most important aviation market globally.

CHINA IS THE LARGEST AIRCRAFT BUYER IN ASIA, FOLLOWED BY INDIA AND INDONESIA

Asia is now the world’s largest buyer of aircraft, accounting for 34% of the total number of aircraft on order globally. China leads with 1,248 aircraft on firm order, followed by India (907), Indonesia (504), Malaysia (503) and Singapore (384).

Chart: Total number of aircraft ordered by the Asia Pacific countries (2018)

Chart: Total number of aircraft ordered by the Asia Pacific countries (2018)

 

ASEAN COUNTRIES AND INDIA HAVE THE MOST AGGRESSIVE AIRCRAFT FLEET PLANS IN ASIA

The number of aircraft orders amounts to 70% of the existing aircraft in service for Asian owners. The aircraft orderbook-to-fleet ratio is staggering for ASEAN countries and India at 379% for Indonesia, 367% for India, 286% for Malaysia, 216% for Vietnam and 160% for Brunei.

Chart: Asia Pacific countries: Aircraft orderbook-to-fleet ratio (2018)

Chart: Asia Pacific countries: Aircraft orderbook-to-fleet ratio (2018)

ASIA WILL HAVE THE LARGEST MARKET SHARE OF GLOBAL AIRCRAFT CAPACITY, OVERTAKING EUROPE AND NORTH AMERICA

By the time these orders are delivered, Asia will become the world’s largest aircraft owner with 29% market share of the global aircraft capacity from 26% currently, overtaking Europe and North America, emerging as the most important aviation market globally.

European aircraft owners’ market share will drop 4ppts to 28% while North American owners’ market share will drop 3ppts to 27%. Middle Eastern aircraft owners’ market share will rise 3ppts to 9% while Latin American owners’ market share will rise 1ppt to 5%. African owners’ market share will remain steady at 2%.

 Chart: Global aircraft in service and on order by ownership region (2018)

Chart: Global aircraft in service and on order by ownership region (2018)

 

YET WE EXPECT MORE AIRCRAFT ORDERS, INCREASING ASIA’S LEAD AND EMERGENCE AS THE MOST IMPORTANT AVIATION MARKET IN THE WORLD

Part of the aircraft orders is meant for fleet replacement as the Asian airlines tend to keep their aircraft fleets relatively young. Moreover, even after taking into account the aircraft on firm order, Asia still looks relatively under-served compared to North America and Europe when we compare their population per aircraft seat ratios.

Globally, there is one aircraft seat for every 1,800 persons on average based on the current world population and aircraft fleet capacity. In Asia, there is one aircraft seat for every 3,000 persons. This is nearly half the global average population per aircraft seat ratio and one-fifth of the average ratio in Europe and North America, implying more opportunity for aircraft seat capacity growth in the longer term.

With continued economic development and rising disposable incomes, we expect air travel demand to continue to grow in Asia. This will fuel the need to order more aircraft, increasing Asia’s lead over the rest of the world, emerging as the most important aviation market globally.

Chart: Population per aircraft seat in each region (2018)

Chart: Population per aircraft seat in each region (2018)

 

SINGAPORE RESIDENTS HAVE ACCESS TO THE LARGEST NUMBER OF AIRCRAFT SEATS ON A PER CAPITA BASIS IN ASIA, FOLLOWED BY HONG KONG AND BRUNEI

There is one aircraft seat for every 110 persons in Singapore, thirty times more than the Asian average. This is followed by Hong Kong (119 persons per aircraft seat) and Brunei (218 persons per aircraft seat). China is still far behind at 2500 persons for every aircraft seat while India has even more catching up to do at 13,000 persons per aircraft seat.

Chart: Population per aircraft seat in each country (2018)

Chart: Population per aircraft seat in each country (2018)

 

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