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  • Aircraft Value Dynamics

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    YIRU ZHANG
    Yuri Zhang

    Yiru Zhang, Senior Valuation Analyst, Cirium Ascend Consultancy

    Let’s begin by examining where values and lease rates stand today by aircraft category, and how they’ve moved during the last 12 months and last 60 months. The last 60 months effectively represents a benchmark against 2019, meaning pre Covid.

    Let’s begin by examining where values and lease rates stand today by aircraft category, and how they've moved during the last 12 months and last 60 months.

    You can see that in the last year, there were very large improvements in values and lease rates of narrowbody and widebody jets. For narrowbodies, the increases have been in the high teens on a fleet-weighted average basis.

    For widebodies, lease rates on a fleet-weighted average basis have risen almost 30%.

    But given the significant decreases during Covid, on a weighted average basis this shouldn’t be a surprise.

    And in fact, you can see that for widebody lease rates there is almost no visible rent bar, which means they’ve only just come back to the pre-Covid level.

    Values are still almost 20% down over 2019 and we think that is because a big portion of the fleet were relatively young A330ceos and 777s, production of which concluded during the Covid period. Some of these young fleets, i.e. aircraft that are seven to 10 years old, had significant value declines which may never be fully recovered.

    Narrowbodies on the other hand have seen lease rates recover to 2019 levels, but values are actually ahead, by about 15%.

    The regional aircraft market remains significantly below 2019 levels.
    That’s largely driven by a lack of flying activity in the USA, largely due to the pilot shortage, especially for the regional jet sector. There are also additional factors contributing to this decline, such as rising fuel costs and increasing operational expenses. And in the turboprop market, production has now ended for a lot of types. The DHC 8-400, for which production has been suspended, has seen a lot of market availability.

    And in the turboprop market, production has now ended for a lot of types. The DHC 8-400, for which production has been suspended, has seen a lot of market availability.

    Source: Cirium Core, passenger jets only

    To appreciate this chart, the concept of base value must first be understood. Base value is defined as the theoretical market where supply and demand are exactly balanced. So in good economic times when demand exceeds supply, market to base value should be above one, while in the obverse market value will be lower base and therefore the ratio is below one.

    The chart illustrates the “hot” market that existed at the beginning of 2019, then the downturn triggered by Covid, followed by the recovery starting in Q3 2021 leading through to today. Single-aisle market value exceeds base by 25%, while twin-aisle market value is also more than 15% above base. The twin-aisle increases are driven by some recent market value revisions, the latest of which being the A330ceo, which obviously has a large inventory that impacts the fleet-weighted result here.

    The twin-aisle increases are driven by some recent market value revisions, the latest of which being the A330ce.

    Source: Cirium Core Current Market Values, Current Base Values and fleet counts as at 14 Jun 2024

    Meantime the single-aisle ratio is largely being driven upwards by mid-life and older aircraft where demand remains very strong as a consequence of new aircraft delivery deficits which is presently driving strong demand and hence strong market values for those older aircraft. As shown in the above chart, the single-aisle MV/BV ratio is close to parity for new aircraft but increases with age, reaching approximately 160% by retirement age.

    Source: Cirium Core, passenger jets only

    Source: Cirium Core, passenger jets only

    The long term picture using the same data illustrates how today’s MV/BV ratios are at record levels. It also shows how widebody aircraft ratios did not fully recover after the global financial crisis of 2007/2008. They never even exceeded base for an entire 15-year period, only finally transitioning to positive from late last year, beginning of this year.

    Read more Ascend Consultancy articles. Learn more about Cirium Fleets Analyzer.

  • Lessor Direct Orders – A Good Bet Paying Off

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Thomas Kaplan Senior Valuations Analyst, ISTAT Appraiser
    Thomas Kaplan Senior Valuations Analyst, ISTAT Appraiser

    Thomas Kaplan, Senior Valuations Consultant, Cirium Ascend Consultancy

    During the depths of the pandemic, airlines and operating lessors with new aircraft deliveries due from Airbus or Boeing were typically happy to defer those deliveries if they could. The strategy of lessors having speculative orderbooks was in question as there was increased risk of having to accept delivery of unplaced aircraft, or placing those deliveries at depressed lease rates.   In today’s strong demand environment with reduced delivery rates of new aircraft, a near term delivery slot is suddenly rare and highly prized. With strengthening Market Lease Rates, the lessor strategy of having speculative orders now appears to be paying off.

    Who are the lessors with the largest orderbooks and who have access to the prized near-term slots?

    We will limit the analysis to Airbus and Boeing as they are the most backed-up in terms of orders with almost no availability before 2030, especially in the narrowbody segment. The operating lessor orderbook with Airbus and Boeing is over 2000 aircraft, with most due for delivery this decade.

    Who are the lessors with the largest orderbooks and who have access to the prized near-term slots?

    Source: Cirium Fleets Analyzer fleet data; Airbus and Boeing aircraft

    As we expect the current supply and demand imbalance to persist at least through 2026, the conditions for placing lessor orders should remain favourable in this period. The below chart shows which lessors have scheduled deliveries from their orderbooks from now to the end of 2026. Avolon has the largest lessor orderbook with over 400 aircraft, however only a quarter of these are expected to be delivered in the next two and a half years. This also includes 32 A330-900neos, which do not have the same supply constraints as other types and thus lessens their early-slot advantage.

    The below chart shows which lessors have scheduled deliveries from their orderbooks from now to the end of 2026.

    Source: Cirium Fleets Analyzer fleet data; Airbus and Boeing aircraft

    Air Lease Corporation and AerCap have the largest number of aircraft delivering in this time frame at over 200 and 150 respectively. However, in both cases according to Cirium fleet data, two thirds of these are already placed with airline lessees. If these placements were not negotiated recently during the tighter market conditions, that leaves only around 60 available jets with each lessor to place at good rates. Our database estimates that SMBC Aviation Capital has 75 unplaced narrowbodies due for delivery by 2026 which puts them in a strong position in this seller’s market. Our database may not capture all the negotiated placements and letters of intent, so remaining availability may be even less.

    While stock prices move based on many factors, we note that Air Lease (AL) and AerCap (AER) stocks have performed well this year, increasing by ~10% and ~24% respectively since January.

    In contrast, BOC Aviation, another publicly traded large lessor but with a fewer near-term orderbook positions, has seen its stock more flat, down around 4% YTD. Of course, these stock movements are not just because of an OEM backlog, but investors may want to take note of the current advantage these positions hold.

    Given the lack of lessor orders for 2029 and beyond, lessors will need to order quickly if they want to make furthers bets on speculative delivery slots. Otherwise, the Purchase and Leaseback market will remain the only option for lessors to grow their fleet of new aircraft organically. This has historically been a far more competitive market and if lessors are not able to renew their speculative orderbooks, then it can only become even more competitive with consequences for pricing. But that is a story for another day.

    Learn more about Cirium Fleets Analyzer.

  • Is A330neo Coming to China? – A Suitability Analysis

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Yuanfei Zhao (Scott) Aviation Analyst
    Yuanfei Zhao (Scott) Aviation Analyst

    Yuanfei Zhao (Scott), Senior Aviation Analyst, Cirium Ascend Consultancy

    Recent market developments suggest the potential introduction of the A330neo, the successor to the popular twin aisle type A330ceo, to China. A June release from Bloomberg indicate discussions are ongoing between Airbus and Chinese airlines for the sale of over 100 A330neo aircraft. While Airbus has yet to confirm these discussions, the market awaits further developments.

    This raises the interest to examine the potential of this type to be introduced to the China market. From a cost and performance perspective, the A330 family has been designed primarily for short to medium range dense routes while offers competitive pricing relative to its counterparts, such as the A350s. Cirium’s data illustrates this, with the full life market value of a Trent-powered A330-900neo (built in January 2024) and devoid of additional specifications, estimated at approximately USD107 million. In contrast, the equivalent figure for an A350-900 stands at USD158 million..

    “This pricing strategy positions the A330neo favourably in terms of unit cost, operational expenses, and performance balance within its designated market segment, despite its capability to operate long-haul routes.”

    Such characteristics clearly differentiates itself from other main twin-aisle types such as the A350, or the 787 and the 777, which primarily target longer-range routes.

    The chart below demonstrates the average block range for each of the aforementioned aircraft type operated by Chinese airlines on all flights departing from China since 2015, encompassing both domestic and international routes.

    Cirium Schedules data

    Source: Cirium Schedules data

    The average block range flown by the Chinese A330ceo fleet is 2,250km, whereas for the A350, 787 and 777, the ranges are 2,530km, 2,920km and 3,780km respectively.

    This underscores that not only does the A330ceo fleet operate on shorter routes on average compared to other main twin-aisle types in China, but the average block range of other long-haul types operated by Chinese airlines is also not significantly longer than that of the ceo fleet.

    Analysis of flights operated by Chinese airlines between 2015 and 2023 reveals that only 14% of these flights exceed 5,000km. Given this context, it appears economically prudent for Chinese airlines to utilise more of the A330 fleet on the majority of their short to medium-range routes.

    Cirium Fleets Analyzer

    Source: Cirium Fleets Analyzer

    From a fleet planning perspective, out of the 212 in-service and stored A330ceo aircraft in China, 33 units (15% of the total fleet)  are currently aged 15 years or older.

    “These aircraft are likely to face fleet planning decisions before the end of this decade. Additionally, approximately 22% of the fleet is on operating leases with foreign lessors, including Chinese fund-backed lessors registered outside of China.”

    The destinies of these leased aircraft upon lease expiries are subject to higher uncertainties, with lessors having the flexibility to decide whether to extend leases, relocate assets to more lucrative markets, retire and part out the aircraft for better value extraction, or covert them from passenger aircraft to freighters based on prevailing market dynamics.

    In summary, the cost and performance characteristics of the A330 family aircraft align well with the Chinese market, offering a balanced combination of asset unit cost, operational cost (on a per-seat basis) and type/route suitability. If Chinese airlines intend to maintain or even expand their A330 fleet in the long run, it is advisable to commence planning for the new generation neos. However, major considerations include the scarcity of delivery slots and production rate constraints of OEMs, which have resulted in virtually no available delivery slots for aircraft like the A350 and 787 before the end of this decade. While there may be a limited number of A330neo delivery slots still available during this decade due to the relatively small orderbook of this type, they are unlikely to be plentiful.

    Consequently, it may be until the next decade before new A330neos can establish a sizeable fleet within Chinese airlines for replacement or growth, even if orders are confirmed and placed promptly.  

    Learn more about Cirium Schedules, Cirium Fleets Analyzer.   

  • Path to Net Zero: Rising Carbon Footprint in Aviation, Part 3

    EmeraldSky logo representing aircraft and flight emissions
    Andrew Doyle
    Andrew Doyle

    Andrew Doyle, Senior Director – Market Development, Cirium

    Please note: this is part three of a three-part series. Read part one and two.

    Taking a look at the Airbus and Boeing passenger types that made up the global in-service fleet in April 2024 – compared with the previous emissions peak in July 2019 – most notable has been the introduction of approaching 1,500 latest-generation 737 Max aircraft (since the type’s worldwide grounding order was lifted in late-2020), and the addition of almost 1,800 A320neo and A321neo aircraft. Meanwhile the in-service fleet of previous-generation A320ceos has declined by more than 500 and more than 450 737-800s have been removed. 

    On the widebody side, only 20 ageing passenger-configured 747-400s remain in service – down from 130 – and the legacy 767-300 fleet is reduced by approaching 190 units. The active A380 fleet has fallen from 233 to 160 and there are over 110 fewer A330-300s in service. These have been replaced and supplemented by almost 400 additional latest-generation A350s and A330neos, together with more than 270 787s. The combined in-service Airbus and Boeing passenger jet fleets have grown by over 1,000 units to almost 21,000 over this five-year period, which has more than offset the per-flight efficiency gains resulting from the increasing prevalence of latest-generation engine technology. 

    Here’s our take. 

    The commercial aviation industry stands at a crossroads, facing the dual challenge of meeting growing travel demand while drastically reducing its environmental impact. The path forward requires a concerted effort from airlines, aircraft manufacturers, governments, and stakeholders to invest in sustainable technologies and fuels.

    Addressing the urgency of the situation, embracing innovation, and committing to ambitious carbon reduction targets are essential steps to ensure that the future of air travel aligns with the planet’s health. The journey towards sustainability is a complex one, but with proactive measures and collaborative initiatives, the aviation industry can rise to meet this critical challenge. 

    Learn more about accurate aircraft and flight emissions insights; Emerald Sky Aircraft and Flight Emissions.  

  • Predicting Delays: How Airlines Use AI to Minimize Disruptions

    Alex Brooker, VP of Research, Development and Discovery, Cirium

    Time is a precious commodity, the skies are more crowded than ever, and flight delays have become a common headache for travelers. The ripple effects of these disruptions extend far beyond frustrated passengers, costing airlines many millions of dollars annually in crew expenses, fuel consumption, and damaged reputations. However, a quiet evolution is underway in the aviation industry, as airlines and airports harness the power of big data, machine learning, and artificial intelligence to predict and minimize flight delays like never before.

    Traditionally, airlines have relied on historical data analysis and weather forecasts to anticipate potential delays. But these methods often fall short in providing the granular, real-time insights needed to make proactive operational decisions. “The most obvious clue, of course, is checking the weather,” says airline pilot Patrick Smith. “There are, however, lots of variables here. Some hubs are more prone to delays than others. A few inches of snow in Denver or Detroit aren’t a big deal. Snow in Washington or Dallas, on the other hand, can cause problems.”[1]

    Enter the new era of AI-powered delay prediction. By analyzing vast troves of data from sources like satellite imagery, radar, aircraft sensors, and weather stations, machine learning algorithms can identify patterns and forecast delays with unprecedented accuracy. These systems continuously learn and refine their models with each new data point, enabling airlines to make smarter, faster decisions that minimize the impact of disruptions.[2]

    Leading the charge in this space are airlines like JetBlue[3], Delta, and United. JetBlue has partnered with weather intelligence provider Tomorrow.io to develop a system that can predict delays hours or even days in advance.

    By providing hyper-accurate forecasts tailored to specific airports and flight paths, the system allows JetBlue to proactively adjust schedules, reroute aircraft, and keep passengers informed.

    The results have been impressive, with the airline reporting savings of $300,000 to $600,000 per hub per year.[4]

    Delta Airlines, meanwhile, has developed its own proprietary app that leverages real-time weather data to set threat index alerts. United Airlines has taken a similar approach with its investment in micro-weather technology, which provides localized forecasts that help optimize flight routes and fuel efficiency.

    The benefits of these AI-driven systems extend beyond just operational efficiency. By minimizing delays and cancellations, airlines can significantly improve the passenger experience and build stronger brand loyalty. In an industry where a single negative incident can turn a customer away for life, this is no small feat. “What the airline is trying to do is delay the flight as little as possible, as late as possible,” explains Flighty app founder Ryan Jones. “And what we’re trying to do is tell the truth as soon as possible.”[5]

    Of course, implementing these advanced prediction systems is not without its challenges. Integrating AI into existing aviation infrastructure requires significant investment in both technology and personnel training. There are also valid concerns around data privacy and security that must be addressed through robust governance frameworks.

    But for airlines willing to make the leap, the potential rewards are immense. A 2019 analysis by Cirium found that every minute of block time delay costs European low-cost carriers around $60. Extrapolated across an entire fleet, this can add up to tens of millions of dollars in annual losses. By leveraging AI to minimize these delays, airlines can boost their bottom lines while also enhancing the travel experience for their customers.

    average cancellation rate

    However, realizing this potential will require close collaboration between airlines, airports, technology providers, and regulators. Data sharing and interoperability standards will be key to unlocking the full value of these systems across the aviation ecosystem. There must also be a concerted effort to ensure that the benefits of AI are distributed equitably, rather than concentrating among a handful of major players.

    At the same time, it’s important to recognize that AI is not a panacea for all of aviation’s challenges. Factors like infrastructure constraints, labor shortages, and rising fuel costs will continue to put pressure on airlines’ operations. Addressing these issues will require a holistic approach that combines technological innovation with sound policy and strategic investments.

    For travelers, the message is clear: the days of being left in the dark about flight delays may soon be a thing of the past.

    With AI working behind the scenes to keep planes running smoothly and on time, passengers can look forward to a future where air travel is more predictable, more efficient, and more enjoyable than ever before. And that is a future worth getting excited about.

    How is Cirium Traveler Services enabling travel providers to create better traveler experiences? Read more here.

    [1] How to Find Out If Your Flight Will Be Delayed Before It’s Even Announced (travelandleisure.com)
    [2] Q&A – Power travel applications with best-in-class data – Cirium
    [3] JetBlue Case Study | Tomorrow.io
    [4] 4 Ways Weather Intelligence Can Improve Operations for Airlines and Airports (tomorrow.io)
    [5] How to Find Out If Your Flight Will Be Delayed Before It’s Even Announced (travelandleisure.com)

  • The Helicopter Leasing Industry: Room for More?   

    Sara Dhariwal Valuations Manager
    Sara Dhariwal Valuations Manager

    Sara Dhariwal, Senior Aviation Analyst, Lead Appraiser – Helicopters & AAM, Cirium Ascend Consultancy

    While lessors have established themselves in the commercial fixed-wing market for around 40 years, the civil helicopter market is relatively new. The emergence of Milestone Aviation Group in 2010 marked the beginning of the growth of specialized leasing companies in this sector. Helicopters became an attractive investment due to their long lifespan and strong value retention. Initially, the focus was on the offshore support market, which presented an ideal opportunity for leasing as it required capacity for a specific period with the ability to return the asset to the lessor afterwards. Twin turbine helicopters are particularly sought after by lessors and often require significant financing.

    The leasing model experienced significant growth during the expansion of the offshore sector between 2012-2014, driven by high oil prices.

    Operating lessors have become increasingly important players for manufacturers, having received nearly 300 new civil twin turbine helicopters over the past decade. This accounts for almost 10% of all civil twin turbine deliveries. Additionally, lessors serve as a crucial source of finance for operators through sale-and-leaseback arrangements involving both new aircraft and those available on the second-hand market.

    Operating lessors have become increasingly important players for manufacturers, having received nearly 300 new civil twin turbine helicopters over the past decade.

    Source: Cirium Fleets Analyzer

    With hindsight, it can be argued that there was an excessive number of orders and subsequent deliveries of offshore-configured helicopters driven by the market demand. The unprecedented downturn in the oil and gas industry which started in 2014 resulted in overcapacity as oil production, and thereby demand for helicopters to transport workers to and from rigs, reduced.

    A considerable increase in number of available aircraft put significant pressure on asset values.

    For lessors, the downturn exposed a vulnerability for lessors who had a fleet model heavily concentrated in one sector.

    As the downturn persisted longer than expected, both offshore operators and lessors faced challenges to stay financially viable. By the end of 2018, Waypoint, the second-largest lessor at that time, filed for Chapter 11 bankruptcy protection.

    In response to these challenges and in an effort to mitigate risk, the lessor industry has undergone fleet diversification. The proportion of offshore-configured twin turbine helicopters in the lessor fleet has reduced from approximately 60% in 2014 to around 40% by the end of 2023. Emergency medical services (EMS) now account for about 30% of the twin turbine lessor owned fleet, while the utility sector represents around 20%.

    In response to these challenges and in an effort to mitigate risk, the lessor industry has undergone fleet diversification.

    Source: Cirium Fleets Analyzer

    Since 2017, the proportion of the leased fleet has remained relatively stable at 20%. Furthermore, there has been a stabilization in the offshore sector over the past few years. This was achieved by reassigning excess capacity and redeploying a significant portion of the fleet as the oil and gas industry began to recover. Additionally, modest new deliveries have helped in bringing the overall fleet size back to a more appropriate level.

    Source: Cirium Fleets Analyzer

    The decline in delivery numbers of helicopters to the offshore sector cannot solely be attributed to the industry’s caution and restraint. Several factors have contributed to this decline, including:

    • Scarce financing: The downturn in the oil and gas industry has made investors wary, resulting in limited access to financing for new helicopter purchases. This scarcity of financing options has hindered the ability of operators to acquire new equipment.
    • Disparity in contract terms: There is often a disparity in perception regarding contract terms between operators and contracting oil companies. This discrepancy can be seen as increased investment risk for new helicopters.
    • Supply chain challenges: The supply chain for helicopters faces its own set of challenges, leading to lengthy lead times for the delivery of new aircraft. These extended lead times require long-term investment commitments, which may further contribute to a decrease in delivery numbers.
    • Future use of fossil fuels: the debate about decreasing the reliance on fossil fuels and the emphasis on ‘green financing’ is affecting the investment case for oil and gas support.

    The consequence of these factors is that the current fleet is aging with a limited pipeline of new equipment entering service.

    According to the Cirium Helicopter Forecast, it is predicted that approximately 20% of the total helicopter fleet will need replacement within the next 10 years. Within this figure, the offshore sector is expected to account for around 5%, which translates to under 400 helicopters. This projection suggests that an average of 40 new deliveries per year will be required for the offshore sector alone over the next decade.

    In comparison, over the past decade, there has been an average of 30 new offshore deliveries per year. Therefore, meeting the forecasted demand would require a production increase of just over 30% in order to accommodate these additional deliveries.

    This data highlights the potential growth and demand in the offshore sector and indicates a need for increased production capacity to meet future requirements.

    This data highlights the potential growth and demand in the offshore sector and indicates a need for increased production capacity to meet future requirements.

    Source: Cirium Fleets Analyzer

    In early 2024, Norway expressed growing concerns about the limited pipeline of new helicopters and the lack of diversity in available types. As a response to this issue, Equinor, an oil major, made a rare move by announcing their own fleet order. While such actions are not unheard of, they are relatively uncommon.

    Towards the end of April 2024, a new player entered the helicopter leasing market with GD Helicopter Finance (GDHF). Spearheaded by Michael York, who gained experience in the industry at Milestone Aviation over the past decade, GDHF is backed by Chinese helicopter lessor and operator GDAT. Notably, GD Helicopter Leasing aims to primarily focus on serving the offshore market.

    GDHF positions itself as offering “near-term availability of the newest technology” indicating that they recognize the opportunity that exists.

    The lessor has currently earmarked 20 H175 and 50 H160 through a mix of firm orders and LoIs. Would all the aircraft be delivered, they would make up nearly 20% of the forecasted replacement demand.

    The growth of lessor portfolios does not solely rely on new deliveries but also involves providing financing options such as sale-and-leaseback arrangements both upon delivery and in the secondary market.

    In the commercial fixed-wing sector, leased fleets comprise about 50% of the total thus a comparison indicates the helicopter sector has potential for growth. However, such growth, does not necessarily equal more market participants. There has been some consolidation amongst the lessors in the past decade with Macquarie acquiring Waypoint along with most of its portfolio following the bankruptcy. LCI acquired a portfolio from Lobo Leasing in 2022 and some asset trading between lessors continuing.

    It begs the question of whether existing lessors can withstand increased competition without comprising their stability? Or is it just what the market needs to signal optimism for growth and innovation?

    Learn more about Cirium Ascend Consultancy and Ascend Fleets Analyzer.

  • Emirates’ Unstoppable Ascent: Navigating the Skies Post-Covid

    Mike Malik, Chief Industry Officer, Cirium

    On May 13th, the Emirates Group announced its best-ever financial performance. Not bad for an airline that launched in the 1980s! In its latest fiscal year, Emirates enjoyed record revenues, record profits, and record levels of cash. Net profit for the 12 months that ended in March was US$5.1 billion, up 71% from the year before. Revenues were up 15% to US$37.4 billion. It’s quite a feat after two years of crisis in our industry, brought on by the Covid-19 pandemic.

    Historic Growth and Fleet Expansion

    Four decades ago, when Emirates was a small startup airline in Dubai, no one could have imagined it becoming what it is today. As Cirium Diio® airline planning data shows, it’s currently the largest airline in the world outside of the United States, measured by scheduled ASKs (available seat kilometers). Only United, American, and Delta are larger by this measure. According to Cirium Ascend Fleets Analyzer® data, Emirates today has nearly 250 planes, all of them either Airbus A380s or Boeing 777s. It’s the largest operator of both models. Soon, it will start receiving Airbus A350s, followed by Boeing 787s and Boeing’s next-generation 777s.

    Adapting and Innovating

    Like any strong company, Emirates is changing and adapting to meet the challenges ahead.

    It’s now in the process of retrofitting and upgrading the interiors on nearly 200 of its planes. This will include all-new Business Class seats and its new Premium Economy product, to go along with its famous first-class showers on A380s. As Emirates President Sir Tim Clark recently said, “We’re topping up our multi-billion-dollar investment in the retrofit program to introduce cutting-edge cabin products on more of our A380s and Boeing 777s, demonstrating a clear commitment to elevating the customer experience with a best-in-class suite of products across every cabin.”

    Expanding Loyalty and Partnerships

    Emirates is also expanding its Skywards loyalty plan, which now has 2.5 million members.

    Earlier this year, the head of Skywards, and Divisional Senior Vice President, Dr. Nejib Ben Khedher unveiled what he called a “landmark partnership” with Visa, a world leader in digital payments. “This agreement,” he said, “is a major milestone for Emirates Skywards as it continues to lead the industry with innovative digital-first products and experiences.” One important benefit for Skywards members is free inflight Wi-Fi.

    Sustainability Initiatives

    To help achieve IATA’s goal of net-zero carbon emissions by 2050, Emirates is working to improve fuel efficiency, invest in sustainable aviation fuels (SAF), and electrify ground vehicles, and a host of other initiatives. The new planes arriving from Airbus and Boeing will also be more fuel-efficient. The company has also committed to spending US$200 million on researching and developing new fuel and energy solutions for aviation. Making the airline industry more environmentally friendly is certainly a hot topic here at Cirium, where we just introduced Emerald Sky™, a revolutionary methodology that seamlessly integrates Cirium’s comprehensive data, advanced analytics, and innovative techniques to achieve unmatched precision in measuring both current and forecasted CO2 emissions from flights.

    Global Network and Market Presence

    There’s perhaps nothing more important to the success of Emirates than its expansive global network from Dubai.

    Based on an analysis using Cirium Diio, the United Kingdom is the airline’s most important country market outside of the United Arab Emirates (measured by total seat capacity). A close second is India, followed by the United States, Australia, and Saudi Arabia. Emirates currently flies 19 times a day from Dubai to the U.K., serving London’s Heathrow, Gatwick, and Stansted airports, in addition to Manchester, Birmingham, Newcastle, and Glasgow. It flies to nine airports in India and 12 airports in the U.S.

    Dubai to Heathrow is the airline’s single busiest route by total seat capacity. Next is Dubai to Bangkok. Rounding out the top ten routes are Mumbai, Cairo, Manchester, London Gatwick, Jeddah, Paris, Delhi, and Kuwait. The airline’s newest destination is Colombia’s capital Bogotá, served from Dubai with a stop in Miami. It will be its fourth destination in South America, joining São Paulo, Rio de Janeiro, and Buenos Aires. It’s starting to get hard to find a major world city that Emirates doesn’t serve!

    The longest route in its system is currently Dubai to Auckland, which is about 8,810 miles, or 14,178 kilometers.

    We can also use Cirium Diio to track connecting passenger flows. Our FM Traffic tool, for example, shows that many of the passengers flying from Dubai to Bangkok on Emirates are connecting from Europe, led by cities like Manchester, Paris, and Amsterdam. A lot of passengers on its Heathrow flights are connecting to and from Australia, the Maldives, and the Indian subcontinent. One other fun fact about Emirates that we can see from analyzing Cirium Diio data: The longest route in its system is currently Dubai to Auckland, which is about 8,810 miles, or 14,178 kilometers.

    Future Prospects

    I’m sure Emirates will add many more destinations in the years to come. Eventually, it will move to Dubai World Central airport, envisioned to become the world’s largest. Last year, Dubai began constructing a nearly US$1 billion engineering facility at the new airport. This year, it’s moving forward on a new passenger terminal. It will support the airport’s plan to handle as many as 260 million passengers annually! In 2023, the current airport handled 83 million.

    Emirates will face many competitive challenges in the years ahead.

    It’s very ambitious for sure, but that’s nothing new for Dubai and its national airline. Of course, Emirates will face many competitive challenges in the years ahead. Other countries like Saudi Arabia, India, and Turkey are also investing heavily in their aviation sectors, hoping to create their own global airlines and hubs. Low-cost airlines are expanding in the Gulf region as well.

    However, competition is something Emirates has faced before. A long history of success shows it can smoothly fly through stormy weather. Personally, I can’t wait to see what’s next!

    Largest Markets for Emirates

    Largest Markets for Emirates

    Source: Cirium Diio

    About Cirium 
    Cirium® is the world’s most trusted source of aviation analytics. The company delivers powerful data and cutting-edge analytics to empower a wide spectrum of industry players. It equips airlines, airports, travel enterprises, aircraft manufacturers, and financial entities with the clarity and intelligence they need to optimize their operations, make informed decisions, and accelerate revenue growth. 

    Cirium® is part of LexisNexis® Risk Solutions, a RELX business, which provides information-based analytics and decision tools for professional and business customers.  The shares of RELX PLC are traded on the London, Amsterdam and New York Stock Exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX. 

    For more information, follow Cirium® on LinkedIn or visit cirium.com.

  • EmeraldSky by Cirium Revolutionizes Aircraft Emissions Accuracy

    EmeraldSky logo representing aircraft and flight emissions

    The most accurate way to capture data for aircraft carbon emissions and fuel burn globally

    This data enables seat-by-seat emissions to be precisely tracked by management companies, corporate travel departments, aircraft finance firms and airlines

    London, 29 May 2024: Cirium, the leader in aviation analytics, has introduced the industry’s most precise independent standard for measuring aircraft emissions and fuel burn. 

    This groundbreaking and revolutionary methodology analyses each flight’s specific aircraft type and design specifications, combined with real-time operational data and flight conditions, ensuring unparalleled accuracy and reliability in emission tracking.

    Cirium’s EmeraldSky seamlessly integrates Cirium’s comprehensive data, advanced analytics, and innovative techniques to achieve unmatched precision in measuring both current and forecasted CO2 flight emissions.

    Unlike traditional carbon calculators that depend on broad estimates and loose assumptions – such as using pre-planned routes instead of actual flown paths, and ignoring variables like wind speed and direction – EmeraldSky provides emissions results based on the seat in a specific class of service and sets a new standard in aircraft emissions measurement.     

    Jeremy Bowen, CEO of Cirium, said: “Cirium’s mission is to establish the industry standard for accurate fuel burn and carbon emissions data to empower the aviation sector to deliver on its sustainability targets. Cirium’s world-beating methodology even considers each aircraft’s typical operating weight, passengers and baggage, cargo payload, and degradation in engine efficiency over time to provide the most accurate data available to help achieve aviation’s ambitious sustainability goals.”

    Endorsed by airlines and industry stakeholders, EmeraldSky offers users access to both historical data for up to five years and predictive carbon footprint for the upcoming 12 months.    

    This robust data enables precise, independent assessment of each aircraft’s emissions, supporting more informed decision-making across the aviation sector. This ensures more precise flight emission reporting, which is critically important in meeting current and future climate regulations.

    With superior data, EmeraldSky enables users to:

    • Undertake a thorough assessment of sustainable aircraft and fleet options
    • Identify opportunities for aircraft upgrades
    • Promote eco-friendly travel by providing sustainable flight options
    • Comply with emissions regulations and ESG reporting requirements
    • Evaluate investments in aviation carbon offset and elimination programs
    • Forecast the demand for sustainable aviation fuels (SAF)
    • Identify opportunities for aircraft upgrades.

    In a world with an immense focus on the environmental impact of aviation, EmeraldSky’s rigorous approach is essential for accurate reporting and responsible aviation practices.

    EmeraldSky supports Cirium’s ongoing mission to make a meaningful positive impact on the future of aviation and the environment, alongside the industry’s Net Zero targets. 

    Contact us to learn more about EmeraldSky.

    For media enquiries please contact:
    Cirium – media@cirium.com
    The PC Agency – cirium@pc.agency (UK)
    Juliett Alpha – mike@juliettalpha.com (Global)

    About Cirium 
    Cirium® is the world’s most trusted source of aviation analytics. The company delivers powerful data and cutting-edge analytics to empower a wide spectrum of industry players. It equips airlines, airports, travel enterprises, aircraft manufacturers, and financial entities with the clarity and intelligence they need to optimize their operations, make informed decisions, and accelerate revenue growth. 

    Cirium® is part of LexisNexis® Risk Solutions, a RELX business, which provides information-based analytics and decision tools for professional and business customers.  The shares of RELX PLC are traded on the London, Amsterdam and New York Stock Exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX. 

    For more information, follow Cirium® on LinkedIn or visit cirium.com.

  • Tackling Greenwashing With Accurate Aviation Emissions Data

    JIm Hetzel Director of Product Marketing
    JIm Hetzel Director of Product Marketing

    Jim Hetzel, Director of Product Marketing, Cirium

    Wilson Caulfield, Head of Sales, EMEA, Cirium

    The European Commission recently took decisive action against 20 airlines for making invalid green claims, commonly known as “greenwashing” as stated in the European Commission April 30, 2024 press release – Commission and national consumer protection authorities starts action against 20 airlines for misleading greenwashing practices. These airlines were found to have exaggerated or misrepresented their environmental efforts, misleading consumers and stakeholders. This crackdown underscores the growing regulatory scrutiny and the urgent need for the aviation industry to adopt transparent and objective measures of greenhouse gas emissions.

    The Implications of Greenwashing

    Greenwashing not only tarnishes the reputation of airlines but also erodes public trust and investor confidence. It undermines genuine sustainability efforts and can lead to significant financial and legal repercussions. For the aviation industry, which is under increasing pressure to meet net zero targets by 2050, the ramifications are severe. Effective and credible climate action hinges on the ability to provide accurate data and transparent reporting.

    The Need for an Independent Monitoring System

    To counteract these issues and foster trust among all stakeholders, the aviation industry must implement an independent monitoring system that ensures reliable and scientifically accurate emissions data. Such a system would:

    • Enhance Transparency: Provide verifiable and science-based data that stakeholders can trust.
    • Support Regulatory Compliance: Align with international standards and regulations to avoid penalties.
    • Build Investor Confidence: Demonstrate genuine commitment to sustainability, attracting environmentally conscious investors.
    • Improve Customer Trust: Assure customers that the airline’s green initiatives are legitimate and impactful.

    A Focus on Independent and Accurate Flight Emissions

    Cirium is dedicated to advancing the industry towards its Net Zero goals by 2050 through its trusted and independent data analytics. To support this mission, it has developed Emerald Sky, an advanced methodology that integrates data, analytics, and innovative approaches to achieve unparalleled precision in measuring both flown and forecasted CO2 flight emissions.

    Unlike traditional carbon calculators that rely on broad estimates and assumptions, Emerald Sky uses cutting-edge techniques

    Unlike traditional carbon calculators that rely on broad estimates and assumptions, Emerald Sky uses cutting-edge techniques and proprietary data to accurately calculate aircraft fuel-burn and CO2 emissions. This ensures more precise flight emission reporting, which is critical for meeting current and future climate regulations.

    With Emerald Sky, Cirium aims to provide the industry with the accuracy and transparency it requires to achieve its environmental commitments.

    Moving the Industry Forward

    Airlines must move beyond merely stating intentions to reduce carbon emissions. It’s time to take ownership of their environmental impact and work towards tangible, scientifically backed results.

    Addressing aviation and airline greenwashing and adopting a robust emissions monitoring system isn't just a regulatory requirement

    Addressing greenwashing and adopting a robust emissions monitoring system isn’t just a regulatory requirement—it’s a strategic imperative for building a sustainable future in aviation. Let’s work together to ensure our industry’s environmental claims are as high-flying as our planes.

    Contact Cirium today to learn how to obtain an objective and scientifically accurate measure of greenhouse gas emissions. Cirium’s solution ensures sustainability efforts are transparent, credible, and aligned with global net zero targets.

  • Path to Net Zero: Rising Carbon Footprint in Aviation, Part 2

    EmeraldSky logo representing aircraft and flight emissions
    Andrew Doyle
    Andrew Doyle

    Andrew Doyle, Senior Director – Market Development, Cirium

    Please note: this is part two of a three-part series. Read part one and three.

    According to Cirium’s proprietary Emerald Sky methodology and data analytics, of the 200 airline operators with the greatest CO2 emissions in 2019 – which together accounted for 93% of total emissions and out of which 185 remain in operation today – 81 are on track to have reduced their CO2 per ASK by more than the average 3.9% over the five years to July 2024. The most-improved carrier (Icelandair) is expected to register a reduction of more than 24% thanks to a major fleet replacement programme. Other carriers – for example British Airways, which is on track for an 8.1% decline – made decisions during the pandemic to phase out entire fleets of particularly fuel-thirsty aircraft, such as 747-400s.

    Conversely, Finnair’s estimated CO2 per ASK is forecast to have increased by more than 10% between 2019 and 2024, but principally due to the non-availability of Russian airspace following that country’s invasion of Ukraine in February 2022.

    This resulted in the Finnish flag-carrier’s A350 fleet using approximately 20% more fuel per ASK due to extended flight times to/from points in Asia, as captured by Cirium’s air minutes rather than great circle distance-based methodology.

    The principal sustainability challenge facing the industry is that the forecast growth of the commercial airliner fleet will result in absolute CO2 emissions continuing to increase until supply of sustainable aviation fuels can be massively ramped up. Although aviation as a whole contributes a relatively small portion of global emissions, roughly 2% on latest international estimates, it remains in the spotlight precisely because of this lack of immediate alternatives to fossil fuel use, as well as the potential multiplier of greenhouse effects through cirrus cloud formation at altitude.

    Check back next week for part three: The impact of changes to in-service fleets. Contact us to learn more about Emerald Sky.

  • Path to Net Zero: Tackling Aviation’s Rising Carbon Footprint

    EmeraldSky logo representing aircraft and flight emissions
    Andrew Doyle
    Andrew Doyle

    Andrew Doyle, Senior Director – Market Development, Cirium

    Please note: this is part one of a three-part series. Read part two and three.

    In an era marked by significant incremental advances in engine technology and aircraft design, one might expect the commercial aviation industry to be on a clear flight path towards environmental sustainability. Yet, the reality is more complex and concerning. Despite these technological strides, the sector finds itself at a critical juncture, with greenhouse gas emissions projected to soar beyond previous levels, challenging the global commitment to combat climate change.

    Latest forecasts from Cirium show that monthly carbon dioxide (CO2) emissions from scheduled passenger flights will hit an all-time high of 74m tonnes in July 2024, exceeding the pre-pandemic record of 73m tonnes set in July 2019.  But there is good news. Over this five-year period, efficiency measured as CO2 per available seat kilometre* (ASK) will have improved by over 3.8%, thanks mainly to the increasing proportion of aircraft equipped with the latest engine technology.

    Journey to Net Zero: The rising carbon footprint of commercial aviation

    July 2019 saw nearly 3.1m flights deliver 915bn ASKs at an average of just over 70g of CO2 per ASK. Cirium’s forecast for July 2024, based on published airline schedules linked to actual fleets, includes more than 3.2m flights providing almost 980bn ASKs at an average of a little under 68g of CO2.

    Journey to Net Zero: The rising carbon footprint of commercial aviation

     *Assumes 75% of flight-level CO2 from widebodies is attributable to passengers, with 25% accounted for by belly cargo

    This efficiency improvement would have been greater were it not the case that hundreds of Pratt & Whitney PW1100G-powered Airbus A320neo Family aircraft are grounded pending engine inspections, while deliveries of Boeing’s 737 Max models were constrained in the wake of the extended grounding of the type after two fatal crashes. General post-Covid supply chain issues and certification challenges also led to fewer latest generation widebodies entering service than had been envisaged back in 2019.

    Check back next week for part two: Factors influencing airlines reduction in CO2 emissions. Contact us to learn more about Emerald Sky.

  • Quantifying Volatility in Aircraft Values

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    Thomas Sweeney - Cirium Ascend Consultancy
    Thomas Sweeney - Cirium Ascend Consultancy

    Thomas Sweeney, Valuations Associate, Cirium Ascend Consultancy

    In the current supply constrained environment, the majority of aircraft values are on an upward trajectory. All of our existing market analysis indicates that this constrained supply will continue for several years yet and potentially for the majority of this decade. Demand is projected to resume its growth trend, although there is some risk in this assumption. Having just experienced the extreme downturn of the pandemic we are well placed to assess the risk that each asset presents based both analysis of historical data and understanding of the market dynamics of that type.

    To illustrate how various assets have performed, we plot the graphical distribution of Market-to-Base Value ratio around a balanced market, which is represented by a MV/BV ratio of one. Below are examples of these graphs for three different aircraft types on a 10-year horizon which demonstrate the full range from stable to highly volatile.

    The Airbus A350-900 is an asset which has proved very popular with operators and investors. An efficient new generation aircraft, it is an optimal size for many operators’ long-haul networks and production has been more stable than for its competitor, the Boeing 787. This has resulted in relatively stable values for the type:

    It is unsurprising that Market Values for the type have mostly been below Base, given that a large proportion of its in-production life has been taken up with the pandemic.

    It is more noteworthy that Market Values have barely gone below 90% of Base.

    It demonstrates the relatively low volatility of this type. Demand for this aircraft is high with a diverse operator base and it has had time to prove its performance. It is the largest in-production type at present, as the 777X continues to struggle in certification. This is driving the view that demand, and hence values, are unlikely to fall significantly in the near and medium-term.  

    The newest Boeing 737-700s (2012-2018) have a less stable profile, with Market Values showing significant time spent between 75% and 90% of Base:

    Quantifying Volatility in Aircraft Values

    The Boeing 737NG family has been a very successful programme and demand for this key narrowbody type can only fall so far. However, this variant of the family is one of the more volatile types. The smallest variant in a family is generally less popular as a consequence of its relatively poorer seat mile economics. The -700 is highly concentrated with Southwest Airlines, which has 380 aircraft, comprising over half of its in-service commercial fleet. These younger aircraft are both a smaller portion of the fleet and face faster depreciation and higher volatility as they are late in the production cycle, already being taken over by newer technology. Despite these aspects, the type retains the same engines as other more popular variants of the 737NG family and as such, is prevented from the extreme volatility that can be seen on other types.

    The Airbus A380 is an example of a type that has shown very high volatility as scepticism over its economic viability became increasingly widespread over the past decade:

    By now, the Airbus A380’s weaknesses are well known – such a large aircraft requires a high load factor to remain profitable and selling enough seats to maintain this load factor is challenging on all but the densest routes.

    Its very high concentration in Emirates’ fleet, with which the type is almost synonymous, and very small operator base renders it difficult to trade on the open market.

    The pandemic showed that the A380 was amongst the earliest aircraft types to be stored or retired and this is reflected in the third chart, where the Market Values fall below even 50% of Base.

    In conclusion, understanding the value trends and market dynamics for different aircraft types is essential in the current supply-constrained environment. These types show that there isn’t one key factor in volatility. Both elements of the physical value of the asset, such as position in production cycle and technical capability, and economic value, such as an optimised size for high load factors and yields, play a part in volatility. A statistically rich historical dataset and understanding of the market position of each asset allows us to both quantify downside value risk and predict future volatility.

  • Can COMAC Truly Challenge the Airbus and Boeing Duopoly?

    Cirium Ascend Consultancy is trusted by clients across the aviation industry to provide accurate, timely, and insightful aircraft appraisals. The team provides the valuations and analysis the industry relies on to understand the market outlook, evaluate risks and identify opportunities.

    Discover the team’s industry reports & market commentaries. Read their latest expert analysis, viewpoints and updates on Thought Cloud.

    RobMorris Cirium
    RobMorris Cirium

    Rob Morris, Global Head of Consultancy, Cirium Ascend Consultancy

    Since the unfortunate 737-9 Max accident in January laid bare Boeing’s continued 737 production woes, we have been asked many times about the potential for COMAC to step up and fulfill single-aisle aircraft demand which is being frustrated by slow Boeing deliveries. The question is further magnified when considering Airbus’s own struggles to ramp A320 family production, which came close to averaging 60 aircraft per month in 2019 before reverting to less than 40 per month through the pandemic, up from the current 50 or so per month towards the planned target of 75 per month in 2026. As one senior leasing executive put it at ISTAT Asia in Hong Kong in early May “Boeing and Airbus have offered a window of opportunity for COMAC”. Another said “AB today becomes ABC in ten-years time”. In essence, the door is open for COMAC but can they step through it?

    From a demand perspective, the opportunity certainly exists.

    Our latest Cirium Fleet Forecast, published in November 2023, projects demand for more than 40,000 single-aisle and twin-aisle passenger jet deliveries over the next 20 years.

    In the 20-year period 2000-2019 Airbus and Boeing between them delivered just under 19,600 commercial passenger jets (including five from the legacy McDonnell-Douglas range which Boeing had acquired in 1997, rendering 2000 the year that the large commercial aircraft market became the duopoly we know today). Hence, unless today’s duopolists are able to double their output through 2043, there is certainly headroom for a third player.

    But can COMAC step up with the current C919 to exploit the opportunity in the commodity single-aisle space where that demand projection estimates almost 33,000 deliveries? The orderbook signals optimism, with 998 aircraft currently recorded as on firm order in Cirium’s fleet database to add to the five which have already been delivered. However, as the chart below illustrates that backlog is shown as scheduled for delivery through 2040, a far longer delivery horizon than any competing Airbus or Boeing single-aisle. Only 46% of the backlog is committed to six airlines, all of whom are domiciled in China. The remaining 543 aircraft are on order with 12 operating lessors, all of whom are Chinese owned and domiciled aside from BOC Aviation. These aircraft will need to find customer placements and it is unusual for a new aircraft programme to feature so many lessors so early in its genesis. This perhaps suggests how airlines are viewing the C919 for now, although the recent orders for 100 each from Air China and China Southern are likely to have a much firmer status than many of the lessor orders.

    Cirium’s Fleet Forecast also signals optimism, with the current projection for just under 1,700 C919 programme deliveries through 2042. The vast majority of those deliveries are expected to be to domestic customers, with only around 250 aircraft expected to be sold to export customers largely in belt and road countries where political influence can drive sales campaigns. With more than 6,000 new single-aisle deliveries expected in China over the forecast period, C919 is expected to capture around 25% market share compared to Boeing’s 30% and Airbus’s 45%.

    With that optimism, how is COMAC performing today as it strives to break into the single-aisle market, and how does that performance benchmark to the most recent successful market entrant which of course was Airbus in the late 1980s? Airbus delivered its first A320 to Air France in March 1988. COMAC delivered its first C919 aircraft to China Eastern Airlines in December 2022. 17 months later, COMAC have now delivered five aircraft to that single customer. Within 17 months of the first delivery of its A320 back in 1988, Airbus had delivered 49 units to nine different airlines in Europe, North America and Asia. Ten times as many aircraft delivered globally by Airbus more than 35 years ago when the market was inter alia much smaller than it is today. Airbus did have one significant advantage over COMAC today, in that since the 1960s Airbus’s partner companies in France and the UK had manufactured and delivered more than 630 passenger single-aisle aircraft, Caravelles, Tridents and One-Elevens, to almost 90 customers globally, facilitating aircraft support networks which Airbus was able to leverage to ensure their customers enjoyed dispatch reliability and performance necessary to establish the A320 family as a credible and global competitor to the then competing Boeing and McDonnell Douglas single-aisle aircraft. COMAC does not have that support network in place and thus has to work very hard to build it to support airline customers who will be expecting performance and dispatch reliability that benchmarks favourably against those delivered by the established Airbus and Boeing products.

    How are the aircraft already delivered performing today? Cirium’s data shows that China Eastern’s five aircraft are presently scheduled on three domestic routes from Shanghai Hongqiao to Chengdu, Beijing and Xi’an.

    Flight tracking data confirms that in April the aircraft operated a total of 398 flights, averaging 5.9 hours per day.

    In the same month, all Boeing 737-8 Max and A320neo in service in China averaged 8.1 and 8.4 hours flown per day respectively, so C919 is clearly being scheduled and flown conservatively for now averaging around 70% of the Boeing and Airbus peers, as the aircraft starts to prove itself in operational service. However, there are already signs of improvement since as recently as February C919 was achieving only around 50% of the average daily hours of 737 and A320. There are also signs of improvement from a route perspective, with a C919 reportedly scheduled to operate a single Shanghai Hongqiao to Hong Kong return sector on 1 June 2024, with further reports that this will subsequently become a regular route for the aircraft type.

    What about the future? As already noted, Cirium’s backlog indicates an expectation that COMAC will deliver more than 130 aircraft to customers in 2031. COMAC themselves have stated an intention to develop a production capacity of up to 150 aircraft annually within the next five years. COMAC are also developing a family of aircraft, somewhat akin to Airbus’s strategy with the A320 augmented with smaller and larger A319 and A321 variants. The shorter fuselage ‘plateau’ version was launched in February with an order by Tibet Airlines. At face value the potential to manufacture 150 aircraft annually by 2029 seems ambitious. It took Airbus more than ten years to achieve more than 150 annual deliveries, albeit the 168 A320 family aircraft delivered in 1998 did represent more than 30% market share in the then single-aisle market where Boeing delivered 324 aircraft that year and McDonnell Douglas (by then owned wholly by Boeing) delivered 42 aircraft. Cirium’s forecast projects delivery of around 1,800 single-aisle aircraft globally in 2029, so 150 aircraft from COMAC would represent less than 10% of the total market.

    There is no doubt that the door is potentially open for COMAC to step through and join Airbus and Boeing in the large commercial aircraft market. However, this analysis suggests that the pace at which COMAC will walk through that door is relatively slower than Airbus walked through the same door more than 30 years ago. At present Boeing is clearly weakened, but with time Boeing will fix its issues and return the Boeing 737 family to a level of production some four times larger than COMAC’s stated intent in 2029. In the same timescale Airbus is likely to be producing its own A320 family at around six times the scale that COMAC intend.

    The barriers to entry in the large commercial aircraft market have always been huge – potentially insurmountable for many as witnessed by Bombardier’s ultimately doomed efforts with its CSeries. COMAC are the latest challenger. COMAC does enjoy is a huge domestic market, where China will perhaps consume as many as 15% of all new single-aisle deliveries. It can leverage that domestic market to generate sales. But for now the relative pace of those sales seems set to be much slower than even Airbus achieved as it entered the market in the 1980s. Hence, it seems likely that it will be a very long time before AB today genuinely becomes ABC.

    LEARN MORE ABOUT CIRIUM FLEET FORECAST.

  • Middle East Reshapes Aviation’s Future With Innovation

    Alex Brooker, VP of Research, Development and Discovery, Cirium

    In the heart of the Middle East, a quiet revolution is taking place. The region’s aviation industry, long a symbol of ambition and growth, is undergoing a remarkable transformation that promises to reshape the future of air travel.

    With a commitment to innovation, sustainability, and passenger experience, the Middle East is poised to set new standards for the global aviation community. As global stakeholders gather for the Arabian Travel Market in Dubai this week, let’s explore the initiatives and specific regional opportunities.

    At the forefront of this transformation is the United Arab Emirates, home to some of the world’s most renowned airlines and airports. Dubai-based Emirates Airline, a $29 billion entity, has consistently pushed the boundaries of what’s possible in aviation.

    With a fleet of over 250 aircraft and a network spanning more than 140 global destinations, Emirates has leveraged the latest technologies to deliver an exceptional passenger experience. From in-flight entertainment systems to biometric security measures, the airline’s commitment to innovation has set a high bar for the industry.

    But Emirates is not alone in its pursuit of excellence. Abu Dhabi-based Etihad Airways and low-cost carriers like flydubai and Air Arabia have also made significant strides in enhancing their services and expanding their reach. For pure operational performance, Oman Air won Cirium’s regional OTP award for 2023 and was placed 3rd globally. In March 2024, King Khalid International Airport (RUH) was the second most on time airport globally with an on time departure of 87.32%. These airlines and airports have recognized the importance of adapting to changing customer needs and embracing sustainable practices to ensure long-term success. To that end, minimising cancelled flights and delays is something everyone can agree is a positive step – in what has been a challenging month for aviation in the region overall.

    Cirium’s Middle East and Africa OTP Regional Update – Published April 2024

    Middle East & Africa witnessed a 12% surge in the number of flights canceled in March. The region had 1,950 flights canceled compared to 1,739 last month. Safair (FA) was still the undisputed leader in both the Middle East & Africa region and the low-cost carrier category in March.

    The airline concluded the month with an outstanding OTP of 96.67%, up nearly three points from 93.96% in February.

    This was also the highest performance score among all carriers across all global regions and all categories. Oman Air (WY) followed in second place, also with an impressive OTP of 93.32%. With a remarkable thirteen-point increase over last month’s performance, Royal Jordanian (RJ) climbed from seventh to third place this month with an OTP of 89.68%. Gulf Air (GF) remained in fourth place with an OTP of 88.35%, a 4-point increase over February’s OTP of 84.08%. Qatar Airways (QR) finished the month in fifth place with an OTP of 87.36%, a 4-point increase over the previous month’s OTP of 83.27%. Airports in the region also showed huge improvements in their performance this month. King Khalid International Airport (RUH) secured the second-place spot in the global airports category with an OTP of 87.32% following a 4-point increase from last month’s OTP of 83.13%. Kuwait International Airport (KWI) delivered an OTP of 87.32%, up nearly 7 points from February’s performance of 80.51%. Meanwhile, Izmir Adnan Menderes Airport (ADB) turned in an OTP of 91.61%, a 2-point increase over last month’s OTP of 89.57%.

    Innovation Hubs Enable Collaboration

    One of the most exciting developments in the region’s aviation industry is the emergence of innovation hubs like Emirate’s Ebdaa in Dubai. Ebdaa serves as a catalyst for creativity, collaboration, and sustainable energy. This state-of-the-art facility brings together the brightest minds from universities, technology suppliers, and startups to drive the development of cutting-edge solutions. From hydrogen-powered aircraft prototypes to advanced air traffic management systems, the groundbreaking projects emerging from Ebdaa are testament to the region’s commitment to shaping the future of aviation.

    But innovation is not limited to the development of new technologies. The Middle East’s aviation industry is also pioneering new approaches to training and passenger experience.

    Emirates, for example, has also embraced extended reality and immersive experiences to enhance the onboarding and training of its aircrew and employees. By providing realistic simulations of the working environment, these technologies are reducing training times and ensuring a smoother transition for new hires.

    Similarly, Dubai International Airport, one of the world’s busiest, is leading the charge with its plans for a fully touchless, walk-through experience through 2024. Passengers will enjoy seamless check-in, security clearance, and boarding processes, thanks to advanced biometric technology. This initiative not only reduces wait times and enhances safety but also provides a more hygienic and convenient travel experience in the wake of the COVID-19 pandemic. Similar advancements are being implemented across the region, revolutionizing the way passengers navigate airports and interact with airline staff.

    However, the rapid growth and innovation in the Middle East’s aviation industry are not without challenges. The region faces a shortage of skilled labour, with estimates suggesting that the UAE alone will require around 22,000 pilots and crew members by 2033. To address this issue, countries in the region are investing in training and development programs, partnering with educational institutions to nurture the next generation of aviation professionals.

    Another challenge is the need for sustainable practices in the face of climate change. While the Middle East’s airlines and airports have made significant strides in reducing their carbon footprint, there is still much work to be done. The adoption of sustainable aviation fuels, the development of more fuel-efficient aircraft, and the implementation of eco-friendly ground operations are all critical steps in ensuring the industry’s long-term sustainability. To this end airlines and airports across the region are investing heavily in eco-friendly initiatives, such as the adoption of sustainable aviation fuels, the development of fuel-efficient aircraft, and the implementation of green ground operations. Etihad Airways, for example, has pledged to reduce its carbon emissions by 50% by 2035 and achieve net-zero emissions by 2050. These efforts are not limited to operational benefit but are also vital for securing the financial backing for the industry with many deals coming with “green strings attached”. Cirium has also invested heavily in this area and recently secured accreditation for Emerald Sky from the Rocky Mountain Institute for the first climate-aligned finance framework tailored for the aviation industry.

    Despite these challenges, the mood in the Middle East’s aviation industry is one of optimism and determination.

    The region’s leaders recognize the immense potential of the sector and are committed to investing in its future. From the ambitious plans of Saudi Arabia to the strategic partnerships being forged across the region, there is a sense of unity and purpose in driving the industry forward.

    In the coming years, we can expect to see even more groundbreaking advancements emerging from the region. From the development of hydrogen-powered aircraft to the implementation of seamless, touchless travel experiences, the Middle East’s aviation industry is pushing the boundaries of what’s possible. As these innovations take flight, they will not only transform the way we travel but also inspire a new generation of entrepreneurs and innovators. The Middle East’s aviation success story is a testament to the power of vision, collaboration, and innovation. As the region continues to invest in its people, its infrastructure, and its technologies, it is laying the foundation for a brighter, more sustainable future. With its eyes fixed firmly on the horizon, the Middle East is ready to take the global aviation industry to new heights, one innovation at a time.