IMPRESSIVE AVIATION GROWTH FORECAST POSE COLLATERAL CHALLENGES FOR PRIVATE AND PUBLIC SECTORS TO ENSURE ADEQUATE SAFETY LEVELS

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ARTICLE: Embraer Publishes 20-Year Market Outlook

growthFarnborough provides a stimulus for aviation announcements and the Brazilian manufacturer started off this event with an interesting growth forecast for aircraft over the next 20 years. The macro numbers are strong — 6,795 sales in the 30-120 seat market with a total value of $315,000,000,000. The forecast is driven by a 5% annual increase in revenue passenger miles.

More revealing are Embraer’s micro estimates—where these vehicles are expected to be delivered. The report uses the phrase “center of gravity” to describe the trend for more sales eastward, towards Asia Pacific and southward, towards Latin America. The world’s largest market will be China/Asia Pacific with 34%, followed by North America and Europe, each with 21%.

The big changes, in part driven by historically low numbers, are the Middle East, with a forecast increase of 7.2%, closely followed by China (7.0%), Latin America (7.0%), and then Asia Pacific (5.8%), CIS (5.6%) and Africa (5.3%). Even the mature markets (North America 3.2% and Europe 4.1 %) will require additional aircraft.

The estimates have significant collateral implications requiring strategic planning by the private and public sectors.
There is also forecast shortfall in the number of pilots. Government and industry will have to design mechanisms to recruit, train, qualify and retain pilots (this is an area which JDA knows). Cabin crews and mechanics will be needed to operate/maintain these larger fleets. The geographical distribution, particularly in regions like Latin America and Asia Pacific with lower bases of these personnel, will pose new challenges and may involve interregional recruitment.

The governments involved also must act now to meet the increased demand. The rationale for NextGen is to create an Air Traffic Control/Management System that can handle these increased operations. The press is closely reporting on the FAA’s successes and failures in meeting its milestones on that project. EUROCONTROL and other ATC organizations are moving to this satellite-based infrastructure.

With more planes, pilots, ATC operations and need for ground capacity (runways at existing airports and new facilities), the Civil Aviation Authorities of the world will have to ramp up. Refining their regulatory mechanisms, hiring the necessary cadre of professionals, managing them and defining their surveillance regime will also tax their leadership. Outside experts might be invaluable in this sprint to have the governmental structures match the private sector increases.

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