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Domestic India traffic should grow around 8.9%, and travel to China from Asia should grow around 8.5%
Airbus said it expects passenger traffic to grow 3.6% annually over the long term, led by growth in domestic India flights and across Asia. Photo: indranil mukherjee/Agence France-Presse/Getty Images
Airbus forecasts 3.6% annual passenger traffic growth long term, spurred by India and Asia.
Airbus said it expects passenger traffic to grow 3.6% annually over the long term, led by growth in domestic India flights and across Asia.
The plane manufacturer said that the growth in air travel will require 43,400 new passenger and freighter aircraft deliveries over the next 20 years. Around 34,250 will be single aisle and 9,170 will be widebodies, it said.
Airbus expects a doubling in the global in-service fleet to above 49,000 aircraft by 2044.
Passenger traffic will continue to grow despite short-term uncertainties, it said. The rise will be driven by global economic growth and a 1.5 billion increase in the global middle class.
Domestic India traffic should grow around 8.9%, followed by 8.5% growth in travel to China from Asia, Airbus said.
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The biggest capacity increases in low-cost wide-body traffic this year have come from Asian carriers, such as Singapore’s
Remember the days when New York-London, Los Angeles-Paris and Chicago-Barcelona round trips were sold for around $200? In the minds of many Americans, the much-touted “long-haul, low-cost” transformation of air travel ended when the big disrupter of this market, Norwegian Air Shuttle NAS 2.68%increase; green up pointing triangle, was forced to exit trans-Atlantic routes in 2021.
Yet the revolution may be more alive than ever, just in a different form.
Schedules for July and August show that budget airlines plan to offer 2.7 million monthly seats on wide-body jets such as the Boeing BA 0.33%increase; green up pointing triangle 787 Dreamliner and Airbus’s AIR -0.39%decrease; red down pointing triangle A330 and A350. In 2018 and 2019, which was the heyday of Norwegian and its peers—namely IAG-owned Level, Malaysia’s AirAsia X 5238 -0.61%decrease; red down pointing triangle and Australia’s Jetstar—that figure was below two million, according to Cirium Diio Mi.
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The company sees demand for more than 43,000 passenger and freighter aircraft between 2025 and 2044
Airbus will increase shareholder returns, raising its dividend payout ratio to 30%-50% amid robust aircraft demand.
Airbus said it would increase shareholder returns in the coming years, betting that robust demand for aircraft will continue to fuel growth.
The European plane maker said Wednesday that it was lifting its dividend payout ratio to between 30% and 50% from a current range of 30% to 40%. The company said special dividends and share buybacks remained on the table to return extra cash to shareholders.
The move shows a growing divide between Airbus and Boeing, which suspended dividend payments in March 2020. Airbus’s beleaguered rival has been mired in safety and production issues in recent years and is working to recover from the reputational and financial fallout.
Airbus shares rose more than 3% following the announcement that came during the Paris Air Show. The company bagged several aircraft orders at the annual trade event, underscoring strong demand for planes as airlines continue to expand capacity.
Airbus anticipates global demand for more than 43,000 passenger and freighter aircraft between 2025 and 2044, saying single-aisle planes would account for the bulk of new passenger-aircraft demand over the next two decades.
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Airbus said it won’t be meeting its annual targets for the year, including the number of commercial aircraft it planned to deliver, after its space-systems management team identified further commercial and technical challenges.
The European plane maker on Monday said that it will also book charges of about €900 million ($962.5 million) in the first half of 2024 following an extensive review of its space-systems programs.
Airbus expects to end the year delivering 770 commercial aircraft, down from a prior outlook of 800 commercial aircraft deliveries a couple of months ago.
The company said its A320 ramp-up trajectory has been adjusted to reflect specific supply-chain challenges in a degraded operating environment, and that its target production rate of 75 A320 Family aircraft a month is now set to be reached a year later, in 2027.
Airbus also forecasts adjusted earnings before interest and taxes of about €5.5 billion, below the €6.5 billion to €7 billion expected previously.
Airbus’s free cash flow before customer financing expectations have also been lowered to €3.5 billion from €4 billion, the company said.
The first-half expenses are mainly related to updated assumptions on schedules, workload, sourcing, risks and costs over the lifetime of certain telecommunications, navigation and observation programs, Airbus said.
Airbus’ first-half results are set to be published on July 30.
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