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Airbus Ramps Up Production in Response to Air Cargo Demands Spurred by Economic Recovery

Image via Flickr by peter pearson

According to Andreas Hermann, head of freighters for the aircraft manufacturer Airbus, the economic recovery is spurring additional need for more passenger and cargo aircraft, which he expects to drive a need for the aircraft manufacturing industry over the next two decades. Though the recovery and growth is slow, it is there. Airbus is a European aircraft manufacturer, which holds about 10 percent of the aircraft manufacturing market, which is currently dominated by the U.S. manufacturer Boeing. 

Globally, air freight is expected to rise by 4.8 percent per year each year for the next 20 years. Together with the aircraft which will be needed to replace those that wear out or become damaged, this will create a demand for about 870 new aircraft across the industry. These aircraft will be worth an estimated $234 billion to the aircraft manufacturing industry. These additional aircraft will double the current global freight air fleet to about 2,7000 planes.

Much of the growth is expected to be driven my emerging markets, primarily in Asia and Latin America. The Asia Pacific region now holds an air freight market share of 32 percent, which should rise to about 42 percent within the next two decades. China’s share is expected to rise from 15 percent of the market to 22 percent. Japan Airlines recently placed its first order for a passenger aircraft with Airbus.

Airbus currently operates aircraft manufacturing facilities in the United Kingdom, Germany, France, and Spain. The aircraft manufacturer is building an additional facility in the United States at Mobile, Alabama. According to Hermann, the biggest demand is for mid-size cargo craft, which are the preferred craft for running regional cargo routes. The total worldwide revenue for aircraft cargo is expected to be $59 billion this year, which is below the 2011 peak of $67 billion. However, much of the revenue slump is not due to a decrease for demand, but rather a rise in the cost of jet fuel prices.

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