Onwards And Upwards

Image source: Thiago B TrevisanThiago B Trevisan - Shutterstock

What's going on?

European aircraft manufacturer Airbus upped its projections for the next 20 years of global jet demand on Monday.

What does this mean?

High energy costs have been testing airlines recently, but Airbus reckons theres a silver lining in those turbulence-inducing clouds for manufacturers. The aircraft makers latest 20-year outlook predicts rising fuel prices layered with increasingly stringent emissions standards will motivate more airlines to buy the latest fuel-efficient aircraft to keep their costs down and stick to climate goals. And the transitions already underway: 20% of todays active aircraft are from the latest generation of fuel-efficient planes, up from 13% in 2019 despite supply chains and orders lagging during the pandemic-stricken last couple of years.

And since that trends set to continue, Airbus increased its forecast for global jet deliveries over the next two decades to nearly 40,000. It projects that around 80% will be single-aisle planes used on short and medium-haul routes, while roughly 6% will be cargo-carrying freight aircraft.

Why should I care?

Zooming in: Asias airborne.
Asia has a big part to play in all this: the regions driven demand for planes for much of the last decade, and its expected to make up a whopping 45% of all projected deliveries over the next 20 years. Indias set to grow the fastest, with its domestic market expected to ramp up by an average of 6.6% a year more than triple the 2.1% average of the US. And China, meanwhile, is still on track to overtake the US as the worlds busiest aviation market in the coming years.

Zooming out: Brace yourselves.
China might be in for a bumpy ride in the meantime, mind you: the countrys battling another batch of Covid outbreaks, sending around 30 million people back under some form of movement restriction. There are now worries that entire cities could be sent back into the strict lockdowns that hurt growth last quarter, leading spooked investors to send the countrys CSI 300 index down 2% on Monday.

Originally posted as part of the Finimize daily email.

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