Monday, September 19, 2011

Discuss supply and demand in the industry.

Despite the financial concerns at this time, Airbus, a unit of European Aeronautic Defence & Space Co. NV, said it expects demand for nearly 27,800 new passenger and freight aircraft, worth a total of $3.5 trillion, between 2011 and 2030. The forecast encompasses potential demand for Airbus and its U.S. rival. This results in high demand because of the dramatic increase of population in the coming years. Airbus said the number of mega-cities which it defines as cities with 10,000 passengers flying in and out each day is expected to double to 87 by 2030 from 39 currently. Airbus said Asia-Pacific will account for approximately 34% of demand, followed by Europe and North America each taking a 22% share. In terms of passenger traffic on domestic routes, India at 9.8% and China at 7.2% will have the fastest growth rates over the coming 20 years. The demand will be on the large aircraft that seat more than 400 passengers. Next few years the world market's suppliers will face many surprises, because of the extremely demand, which will be caused not only by population growth, and even an increase in wealth and greater urbanization are also driving increased demand for planes. Airbus's increased forecast mirrors that of Boeing, which in June raised its 20-year global commercial aircraft forecast for the market by 8%, saying demand would total 33,500 aircraft worth $4 trillion.

But, the world financial problem is Still, Airbus voiced some concerns about aircraft-financing power among European banks. "We are watching a potential dollar crunch," Mr. Leahy said. ""We have the capability to help [airlines] with financing ... but we have limited ability and can't finance everything."

Late last week, the European Central Bank said it would coordinate with the U.S. Federal Reserve, Bank of England, Bank of Japan and Swiss National Bank to ensure European banks have unlimited dollar funding through the end of the year. Aircraft purchases are funded in dollars.


2 comments:

  1. Statistics based on the company, in the coming years there will be a dramatic demand, because of the population growth , is the financial situation at that time will be able able to provide the extreme demand?

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  2. Saoud,

    This post did a good job of summarizing and analyzing your article. Nevertheless, Airbus' commercial sector does not fall within the defense and aerospace industry. Please try to focus more on your industry when preparing your next post.

    --CB

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