Exports are skyrocketing. Global civil aviation market Position on the Russian market
The aviation industry as an industry was formed at the beginning of the twentieth century. By 1910-12, many countries had several enterprises engaged in the production of aircraft. Interest in the industry arose during the times of world wars, in particular the Second World War, when air supremacy became one of the determining factors in a particular battle. After 1945, the industry continued its rapid growth, during this period paying more attention to civil aviation. By the end of the 80s aviation industry approached the modern model and then practically did not change its appearance. Currently, several countries have emerged as leaders in the aviation industry and are maintaining their positions in this sector.
Modern leaders - what are their characteristics
Currently, world leadership in the aviation industry belongs to several countries, including the USA, Russia, the EU and Brazil. These countries have the largest number of factories and factories operating in this industry. Some companies within the state can afford to produce single parts, but all of them ultimately go to larger enterprises that form the basis of the national aircraft industry.
The peculiarity of leading companies in countries that are leaders in the aviation industry is the fact that they all cooperate with the state. If we are talking about civil aviation, then this is servicing large carriers, national flights, if about the military - meeting the needs of the armed forces.
Leading companies in the civil aviation industry
The civil aircraft industry is the most expensive group, which includes only large enterprises with a narrow specialization at the national or international level.
In the civil aircraft industry today there are two large corporations leading:
- Boeing (American company);
- Airbus (EU united corporation);
- United Aviation Corporation of Russia.
There are no enterprises of similar scale in other countries. A key feature of these companies is the dispersal of production throughout the country or several countries (EU). This approach makes it possible to focus production at one plant for the production of one part, to bring factories closer to resources and, therefore, to minimize production costs. In addition, these companies were able to appear only thanks to the merger of giants. So, for example, the UAC includes several large enterprises “Su”, “Mig”, “Il”, “Tu”, “Yak”, focused on general production.
Other large companies producing aviation in the world are: Lockheed Martin, Northrop-Grumman, United Technologies, Textron (USA).
China will most likely be among the leading aircraft manufacturers in the near future, but today its production cannot yet compete with the world giants.
Military aviation
In the military sector, aviation industry leaders look different. The following brands fall into this category:
- Su (made in Russia);
- Mig (Russia);
- Panavia Tornado (Germany);
- Eurofighter Typhoon (produced by the European Union);
- Boeing (United States Production).
In this sector, it is quite difficult to determine leadership between brands, since companies producing such equipment are reluctant to advertise their own sales. However, we can say with confidence that in this sector the top three remain unchanged: the USA, the European Union and Russia. Interesting developments in this industry also belong to Israel, Canada, China and some other countries, but they are produced in a much more modest volume.
After the collapse of the Soviet Union, an American-European duopoly emerged in the production of long-haul passenger airliners (i.e., aircraft with a capacity of 150 or more people and a maximum flight range of more than 4000–5000 km): the market was divided by Boeing and Airbus (aircraft of the same size are produced in Russia - Tu -204 and Il-96, but their production is sporadic for state needs). The same concentration occurred in the production of regional jet airliners (with a capacity of up to 100 people and a maximum flight range of less than 4,000 km): by the early 2000s, there were only two companies left that truly mass-produced such aircraft - the Canadian Bombardier and the Brazilian Embraer (in Russia). and in Ukraine there is, or rather, small-scale production of this class of aircraft An-148 vegetates). It was in the regional segment that countries that wanted to enter the narrow circle of jet aircraft manufacturers first made their mark. passenger aircraft: Russia with the Sukhoi Superjet project, China with the ARJ-21 aircraft and Japan with the Mitsubishi Regional Jet aircraft. But the long-haul aircraft market is much more capacious and profitable, and at the turn of the 2010s. three more players announced projects in this segment (analogues of the Boeing 737 and A319/320/321): Russia with the MC-21 project of the Irkut corporation, China with the C919 aircraft of the COMAC company and the Canadian Bombardier, whose new CSeries airliner is approaching in passenger capacity " from below" to the shortest versions of the Boeing 737 and to the European A319.
Giants Predictions
Aircraft corporations regularly publish 20-year forecasts for the passenger aircraft and transportation markets—few industries present such long-term forecasts to the public. The demand for specific models is not indicated - the breakdown is by class of aircraft. Forecasts are compiled on the basis of thorough and many years of marketing and economic research, but, of course, they cannot foresee events that once hit the market hard, such as the terrorist attacks in the United States on September 11, 2001 or the global financial crisis of 2007–2008. As follows from the last one (published in the fall of 2014) Boeing forecast, by 2033, 36,770 long-haul airliners will be produced, and their global fleet will increase from 20,910 aircraft in 2013 to 42,180 in 2033. The cost of aircraft that will be produced before 2033 will be a mind-boggling figure of $5.2 trillion (almost a third of the US GDP or approximately three times the GDP of Russia in 2014). Of those produced over the forecast twenty years, 25,680 aircraft, i.e., almost 70%, will be, in the Boeing classification, “long-haul single-aisle aircraft” (Boeing 737, A320, MC-21 and C919), and in value terms their share will be about 48%. Regional aircraft, to which Boeing includes Sukhoi Superjet, will produce 2,490 units, but their monetary share will be less than 2%, or about $100 billion. At the same time, the market capacity of Russia and the CIS countries, which are allocated by the American corporation as a separate regional market along with the North America, Latin America, Europe, the Asia-Pacific region, the Middle East and Africa, will amount to 1,330 aircraft worth $150 billion by 2033 (or 3% of the entire world market). The former USSR will need 990 MS-21 aircraft, and 160 regional airliners.
Why did “Tu” and “Il” disappear?
IN best years The Soviet aviation industry produced up to 150 passenger jets per year. In 1991, the last year of the existence of the USSR, 37 Tu-154, six Il-86, one Il-96, two Tu-204 and 13 Yak-42 were produced, i.e. a total of 59 jet airliners, while EADS (now Airbus) produced about 170 and Boeing about 600 passenger aircraft. Throughout the 90s. in the West, processes of consolidation of the aircraft industry were underway (as a result of which in the United States, instead of three aircraft manufacturers, only Boeing remained), while all Soviet design bureaus and factories were privatized (or separated into state enterprises) separately. After the collapse of the USSR, the civil aircraft industry in Russia found itself in a state of collapse, which was led by a combination of many factors: a severe economic crisis, the lack of implementation of new projects, the lack of modern technical maintenance and financial support for aircraft sales, and the collapse of air travel resulting in a large surplus fleet of virtually free for airlines cars Beginning in 2001, the state began to look for forms of industry consolidation, which ended only in the second half of this decade with the creation of the UAC. At the same time, there was a difficult process of integration “from below”, the core of which was the two surviving companies that had funds from sales of fighters to China and India - Sukhoi and Irkut. It is not surprising that it was these two companies that put forward projects for new civil aircraft - Sukhoi Superjet, which won the competition in 2002 to create a regional aircraft, and MC-21, the government decree on the creation of which was issued in 2010. At the same time, neither Tu-204, of which only about 80 units were produced, neither the Il-96 (more than 20) never became truly mass-produced due to lack of production in the 90s - early 2000s. their engines, very weak sales support, and the IL-96 - and because of the four-engine design, less economical than that of its Western competitors. At the same time, Boeing and Airbus did not sit idle on the Russian market during the 2000s. took a dominant position on it as Soviet aircraft were written off en masse. The issue of international cooperation is no less important. In the mid-2000s, the European EADS was the closest to becoming the main partner of the Russian aviation industry: it became the owner of a 10% stake in Irkut, and the Russian VTB Bank bought a 5% stake in EADS on the market. However, decisive steps towards partnership were never taken - for various reasons, including political ones.
Airbus's 20-year forecast, published at the Le Bourget air show in June, is not radically different from Boeing's, but is more moderate. Sales by 2034 will be $4.9 trillion, the total number of new aircraft produced will be 32,585 (12% lower than Boeing), the number of single-aisle aircraft will be 22,927, and the cost will be 55%. There is, however, a notable difference: Airbus predicts that demand for ultra-large jets (such as the A380 and Boeing 747) will be 1,550 aircraft, while Boeing believes that only 620 units will find buyers. This is not surprising, since the largest and most modern aircraft of this type - the A380 - is produced by Airbus, while Boeing abandoned the development of a machine of this size in favor of a radical modernization of the Boeing 747. The forecast of the European aviation concern suggests that in 20 years the number of largest air hubs in in the world will increase to 91 from the current 47 (from Russia both now and in 20 years they will be represented only by the Moscow air hub), and the A380 concept is focused on transportation between them.
Share for Sukhoi Superjet
Bombardier of Canada's forecast, published last year, focused on aircraft of the size it produces. The company's marketers believe that by 2033, the demand for airliners from 100 to 149 seats (which includes short versions of the Boeing 737 and A319, as well as the CSeries airliner being developed by the Canadian company) will amount to 7,100 units, or $465 billion in monetary terms. Embraer, in its forecast published at the last Le Bourget, expects the delivery of 6,350 jet aircraft with a capacity of 70 to 130 seats by 2034, including 380 in Russia and the CIS countries.
Thus, all forecasts of global aircraft manufacturers provide for a significant market niche for Sukhoi Superjet. The truly serial production of this aircraft that began last year (37 units were produced) led to the fact that it took up approximately 10% of the total sales of regional jet airliners.
View from Russia
A representative of Sukhoi Civil Aircraft said that, according to company forecasts, for the period 2015–2034. The market capacity of cars with a capacity of 91–120 seats will be 2600 units, and the share of SSJ will be 14%, i.e. 364 units.
However, much more ambitious is the MC-21 project, aimed, like the Chinese C919, at the most capacious niche of the world market, where it will face much tougher competition from Boeing and Airbus, which will launch it on the market in 2016–2017. its new modifications of the Boeing 737MAX and A320neo, equipped with new highly efficient engines. The MC-21 will have the same engine as the A320neo, but it will be the first airliner with a composite (black) wing and will be equipped with a large number of the latest innovative systems, only the first flight is planned in 2016 (Sukhoi Superjet from the first test flight to the first commercial one took about four years).
Executive Director of the Aviaport agency Oleg Panteleev believes that the feasibility of sales plans for new types of Russian aircraft is determined by three factors. Firstly, the production capabilities of assembly sites - and there are no risks here. Secondly, the stability of cooperation in the supply of components - and the Russian aviation industry does not control this risk in the event of an aggravation of the international situation. Thirdly, the opportunities for promotion to the world market - this issue is also not under the control of the aviation industry, but if the existing export support policy is maintained, the situation will look controlled.
Russian aircraft and helicopter manufacturers today face new challenges. They will have to integrate more actively into the global market, quickly introduce new technologies and, if necessary, exchange qualified personnel.
These and other steps are contained in the draft updated Aviation Industry Strategy until 2030. In addition, the document includes the gradual privatization of some state-owned companies. “We are in favor of actively attracting private capital to the industry,” explained Minister of Industry and Trade Denis Manturov.
Benefits are not canceled
For industry participants, existing state support measures will remain and even expand. "We will encourage our airlines to acquire a fleet aircraft Russian-made," Denis Manturov said.
According to him, a new generation of suppliers must emerge, working to the most stringent standards, in demand not only in the domestic but also in the world market. “Aviation industry corporations are already working in this direction,” the minister clarified.
As before, the state is relying on aviation science and ensuring the technological sovereignty of the country. “As a result, we expect to build an economically stable, globally competitive industry, integrated into the international division of labor,” Manturov concluded.
The supplier is small but smart
A new generation of suppliers, including small and medium-sized businesses, will work not only for the aviation industry, but also for related industries - automotive, space, shipbuilding, transport engineering and others.
Today, all of the world's largest aircraft and helicopter manufacturers work with a variety of large and small component manufacturers, concentrating on the best product development, quality workmanship and impeccable after-sales service.
In Russia, the outdated industrial model of “full cycle” enterprises is still used - from casting to assembly of final products. IN modern world There are almost no such enterprises left - it is unprofitable.
The world welcomes broad cooperation and division of labor, the authors of the document state. According to Oleg Panteleev, executive director of the Aviaport agency, the strategy directly points to the key features of the “domestic aircraft industry” and proposes ways to solve them in line with trends in the global aviation industry. This means that the emphasis must be placed on the independent development of so-called critical technologies that ensure competitiveness, on inclusion in international cooperation and division of labor.
Digital Factory
The most pressing problem for Russian aircraft manufacturers is the cramped domestic market and the closed nature of many foreign markets.
"The United Aircraft Corporation (UAC) plans to produce about 35 SSJ100 aircraft per year in the near future. The capabilities allow us to double production and ensure production profitability due to the scale of the business. But aircraft in such quantities are not required within the country. Our passengers do not earn that much and they don’t fly as often as Europeans or Americans,” Oleg Panteleev explained to Rossiyskaya Gazeta. That is why it is extremely important for Russian aircraft manufacturers to gain access to the international market.
“A breakthrough into the Asian markets can be ensured by the implementation of the joint Russian-Chinese project of a wide-body long-range aircraft (WLDMS),” believes Oleg Panteleev.
The development of military aircraft exports will be facilitated by the successful combat use of attack aircraft in Syria.
“It is important to understand what will be in demand in other countries. We are relying on new aircraft models. These are SSJ100, MC21, Ka62, Mi38, Ansat,” the ministry explains.
Let us remind you that the SSJ100 is a regional passenger aircraft created in close international cooperation, the Ansat is a modern helicopter for wide use for civil and special purposes. Ka62 and Mi38 are multi-purpose helicopters, MC21 is a short-medium-haul aircraft.
The aviation industry now has more than 250 industrial enterprises and over 400 thousand employees
The updated Aviation Industry Strategy places emphasis on enhanced scientific and technical development of the industry. Despite the implementation of promising projects recent years, Russia has accumulated a gap with industry leaders, especially in the civilian segment. Many key technologies in the Russian aviation industry were developed back in the 1980s. And now the world market demands for future aircraft related to digital technology and innovation.
For example, Airbus is introducing a “digital factory” into production - an innovation that will increase productivity and reduce logistics and energy costs by 30%. Boeing and Airbus are beginning to use a 3D printing method that increases the strength of products by five times and reduces raw material costs by 90 percent. The development of after-sales service is also important: with the help of new developments in the world, the speed of service provision is increasing.
The projects that will turn the situation around could be the MC21 and the Russian-Chinese aircraft ShFDMS, the Ministry of Industry and Trade expects.
Let's fly into the alliance
What methods of integration into the global aviation industry are offered? In addition to export government support measures, there is close cooperation with countries developing their own aviation industry.
"For example, China does not have sufficient experience in the design of civil wide-body aircraft and aircraft engines. India does not have its own developments in fifth-generation fighter aircraft, civil regional aircraft, narrow- and wide-body aircraft. The Russian aviation industry has competencies and technologies in these areas and can be a reliable partner for these countries,” the Ministry of Industry and Trade explains.
In addition, they plan to build international alliances according to the “competence in exchange for market” scheme (for example, with China and India). Moreover, the possibility of creating joint ventures with developing countries to develop, produce and promote aircraft is being considered.
In projects with international participation with high-tech countries, Russia is aimed at cooperation with France, Germany, the USA, Great Britain, and Japan. “The creation of conditions for international cooperation will be achieved, among other things, through political support from the state, in particular, at the level of intergovernmental agreements,” the Strategy says.
When purchasing foreign aircraft, industry participants, together with the state, will look for opportunities to meet the requirements of potential partners - include domestic companies in international supply chains, localize the production of components in Russia, and conduct joint research and development work.
A separate topic is supporting the domestic market for civil aircraft. When asked by RG what incentives airlines that are renewing their fleet with domestic civilian airliners SSJ100 and MC21 will be able to count on, they said that they will create special conditions under which Russian aircraft will be competitive in operation.
The problem of accessibility to remote areas of Russia without developed airfield infrastructure will be solved, among other things, with the help of aircraft manufactured according to military transport aviation models. Taking into account the low serial production of such aircraft, the state will partially share costs with air carriers for their operation.
Personnel turnover
Another strategic task is to create conditions for scientific centers to act as independent experts when assessing design solutions and conducting certification.
For the first time in Russia there will be an institute of general designers of corporations. It is created to coordinate all activities in the field of creating military equipment, as well as for the cooperation of various design bureaus. The main goal is to encourage the “flow of technology” from the military to the civilian sphere and back. In general, eliminate duplication of design developments.
The strategy mentions the term "flow" of personnel. He will be able to move within the industry depending on the workload of the enterprise, the availability of vacancies and the ambitions for the employees’ own career growth, the ministry explained.
“There are a lot of qualified workers, but they are distributed locally and are inactive compared to other countries. For the aviation industry and related industries, it is important that people are ready to move for interesting and well-paid work to factories that are experiencing a shortage of personnel, are ready to gain new knowledge, and share knowledge developments that have already helped restore the industrial complex of a particular region,” the department clarified.
The ministry is also considering a migration option in case of closure of unprofitable enterprises in single-industry towns. In addition to advanced training and retraining of personnel, the programs also provide assistance in resolving housing issues.
At the same time, market experts note that the Strategy covers too long a period - until 2030. The dynamics of the global development of the industry are such that the strategy will have to be updated much earlier.
Everything is private
The new industry strategy includes the gradual privatization of some state-owned companies. The aviation industry now largely depends on government subsidies. The lack of extra-budgetary sources of funding did not allow us to fully implement the Aviation Industry Strategy 2015. Therefore, in the future, the focus is on additional private capital and the privatization of state-owned companies.
The total revenue of the aviation industry will be 2.6 trillion rubles by 2030 if the objectives of the Strategy are achieved
“There are different approaches to managing the industry around the world. The largest American and Canadian aircraft manufacturing companies are ruled by private capital, in Europe the state is a shareholder. Russia can choose an intermediate flexible scheme,” Oleg Panteleev approves of the turn to privatization.
The Ministry of Industry and Trade clarifies that privatization is one of the possible steps to change the industrial model. The so-called non-core areas for aircraft and helicopter manufacturers, which may account for up to 60 percent of all labor costs and investments, are going to be privatized.
Infographics: "RG" / Anton Perepletchikov / Elena Berezina
In the context of the decline in which the world economy is located, infrastructure sectors, in particular transport, have suffered quite severely. Enough has already been written and said about the global crisis in freight transportation, especially those carried out by sea, and here the situation in Russia differs slightly from the global situation, at least in terms of the dynamics of operational indicators.
Revenue from passenger and cargo air transportation
Source: IATA
The turning point, by and large, came during the financial crisis of 2008 - since then, global trade turnover has still not been able to confidently return to the previous state of vigorous growth, being limited to a sluggish recovery, but passenger transportation, with the restoration of disposable incomes of the population, has been able to - In the last five years, the industry has experienced a real boom.
Dynamics of passenger and cargo air transportation volumes
Source: IATA
With regard to civil air transportation, however, the situation is noteworthy in that the situation on the domestic market with the onset of the currency crisis diverged from the global trend as a whole by almost 180%. There are several main reasons for this, and it is their consideration, coupled with a general overview of this market, which, without exaggeration, covers almost the entire planet, that this article will be devoted to.
The history of civil aviation goes back more than a century. Since the First World War, it has experienced several unique intra-industry technological structures before adopting the direction of development that most airlines follow today. The first passenger monoplanes were small, carried 7-10 passengers each and were mainly variations on the theme of military aircraft of the design bureaus in which they were created. In the 1930s, the trend changed to the diametrically opposite with the advent of the DC-3, the most popular passenger aircraft in history, which, in turn, served the armed forces well. The 50s were marked by the appearance of the first serial jet airliners, which by the early 70s, with the active growth of transcontinental passenger traffic and the advent of more powerful engines, led to a period of gigantomania in the industry, when manufacturers tried to build, and airlines, in turn, operate as Larger planes were possible, accommodating several hundred people, since the Boeing-707 and other aircraft of a similar type used at that time could no longer cope with the flow of passengers on busy routes. The successful introduction of such airliners was hindered by the oil crisis, which made the use of large and uneconomical aircraft unprofitable, but their capacity still played a role - with a consistent increase in passenger turnover, they are still actively used by large airlines.
Historical dynamics of global passenger traffic
Towards the beginning of this century, the emphasis shifted towards the development of engines with greater fuel efficiency and the large-scale use of small regional aircraft with a capacity of about 120-180 seats - according to the forecasts of the vast majority of industry experts, the near future lies with them, and over the next twenty years 70% of demand On the part of airlines, it will be necessary for this class of aircraft. In total, the world's airlines now operate about 22 thousand passenger airliners; it is expected that this number will double by 2034, with a total demand of about 38 thousand aircraft.
Forecast of changes in the world passenger aircraft fleet
Source: Boeing Market Report
Of this number, 16 thousand will replace aging aircraft currently operated by airlines, and 22 thousand will ensure an increase in the fleet corresponding to the growing passenger traffic - analysts agree that in the next two decades the total passenger turnover will increase by more than two and a half times, with the lion's share of this increase will have to do with regional transportation, mainly in Asian countries.
Forecast of global passenger traffic dynamics
Source: United Aircraft Corporation market review
The current market trend is mainly characterized by the effects of liberalization of the air travel market, namely the increased number of airlines, increased competition and falling fares, which makes travel more affordable and supports passenger demand. Also, an essential characteristic of the market today is globalization - the concepts of national companies are very vague, many carriers operate under code-share agreements, servicing “consolidated” flights with transfers from one company’s aircraft to another within the framework of one air ticket. At the same time, in developed markets there is a process of consolidation of companies - this applies to Europe, the USA, and Russia. In parallel with this, the boundaries between the price segments occupied by specific companies are gradually disappearing - there is a convergence of traditional transportation and the low-cost format in the form of combined business models.
At the moment, the undisputed leader in terms of passenger traffic is the United States, not least due to the highest intensity of domestic traffic due to its vast area and relatively uniform location major cities in the eastern part of the country, as well as a high degree of population mobility. In the list of ten airlines that became the world leaders in passenger volume in 2015, the 1st, 2nd, 3rd and 6th places are occupied by American carriers - American Airlines, Southwest Airlines, Delta Airlines and United Arilines, respectively.
Top 10 airlines by passenger turnover in 2015, billion pkm
In terms of air fleet volume, by mid-2016, American companies occupied the first five places: American Airlines with 1,556 aircraft, Delta Air lines with 1,330, United Airlines with 1,229, Southwest Airlines with 720 and the world leader in air cargo transportation FedEx Express with 688. Thus, it can be calculated that the top five companies alone account for about a quarter of the entire global aircraft fleet. Also, American Airlines, United Airlines and Delta Air lines are leaders in the number of airports connected by flights of these companies, however, in terms of the number of countries included in the route map, American carriers do not even make it into the top five - the leader is Turkish Airlines, operating flights to 108 countries, followed by the largest European airlines- Lufthansa, Air France and British Airways, and Qatar Airways rounds out the top five.
Moving directly to the current state of the market, it makes sense to first of all note that there were two main factors that influenced the global dynamics of demand in the last completed year - the gradually growing demand from the countries of the East and the continued collapse in oil prices. The fall in prices in the commodity market directly mediated the fall in the dollar cost of jet fuel, the cost of which accounts for about a third of the total operating expenses of airlines. By reducing them, carriers were able to afford to reduce tariffs without loss of profitability, thereby attracting new customers.
Dynamics of the cost of aviation fuel
Dear Colleagues!
On behalf of the United Aircraft Corporation, we present a long-term forecast for the development of the civil commercial segment. The event is important for us, since market expectations, direction vector and airline development are the message for us that we are trying to take into account when creating a line of aircraft.
UAC is currently undergoing a period of formation and strengthening in the market. You know that our product line now includes aircraft in almost all segments from 30 seats. We understand that in order to occupy a worthy niche in the civil aviation market, it is extremely necessary and necessary to be competitive not only internally Russian Federation, but also on the foreign market.
We try to take into account the requirements of airlines and their expectations not only in the appearance of the aircraft, but in their technical specifications. The total market volume until 2035 is estimated at approximately $6 trillion, with 42,000 aircraft ranging from 30 seats. And as I said, today the UAC has projects in varying degrees of readiness in almost all areas.
First of all, this is the Sukhoi SuperJet 100. Currently, about 100 aircraft have been delivered, which are operated in Russia, Europe, Latin America, South-East Asia. Yesterday STLC on the Sukhoi SuperJet 100 program. This is an extremely important event for us, since it plans to revive regional transportation in the south of Russia based at Rostov airport. We will also sign today to increase the fleet of aircraft for the period 2020-2021 in addition to those that Azimut will receive under the contract in 2017-2018 - this is 8 aircraft.
In the narrow-body aircraft segment, where the market is most competitive, you know that we have the MC-21 project. The aircraft made its first flight in May of this year and is now undergoing flight and certification tests. The first deliveries will be in 2019; according to our expectations, this is a worthy competitor that will take its rightful place in the fleet of narrow-body aircraft. Of the large aircraft, we have a project with COMAC - this is the ShFDMS. We registered a joint venture. Active work is underway with Chinese partners, the technical appearance of this aircraft, its characteristics and the SHFDMS family of aircraft (wide-body long-range aircraft) have been agreed upon. A joint venture has been registered, active work is underway with Chinese partners, the technical appearance of the aircraft, characteristics, family are being agreed upon, and we are now at the beginning of preliminary design.
In the regional aircraft segment - the turboprop Il-114. That year, as you know, the decision was made to launch the Il-114-300 program. The aircraft's first flight is expected in 2018, with deliveries in 2021. There will be a second conference with operators as part of MAKS. I hope that the aircraft will fully meet the expectations of regional companies and we will try to take into account their requirements.
That's all I wanted to say. I give the floor to Tamara Kakushadze, vice president for marketing of Sukhoi Civil Aircraft.
Thank you for your attention!
Good afternoon, dear colleagues!
Literally in an hour. We are not afraid, we are even interested if you can compare our assessment with their assessment. This is a kind of professional experience for our team of marketers who present the UAC forecast.
This year is an anniversary for the UAC. We have been around for 10 years. We believe that we have achieved quite significant success. Starting with the fact that we have retained and developed our competencies in creating civil passenger aircraft. We have more than 100 SSJ 100 aircraft in operation. MC-21 currently has more than 175 firm orders, while still at the certification testing stage.
Also, as Mr. Masalov said, this year we signed an agreement and opened a joint venture with the Chinese aircraft manufacturing corporation COMAC in China for the full-scale launch of a program to create a wide-body family.
Over these 10 years, we have really actively improved and developed the basis and tools for forming a high-quality, fairly detailed and qualified overview of the market, its forecast for the long term, precisely so that our strategic objectives, which are set within the framework of the product line, meet the market requirements that we expect in the future.
I'll start with an overview of the Russian market. In terms of transportation market volume, we currently occupy 7th place in the world. We believe that by 2036, the passenger turnover of Russian airlines will increase almost 2.5 times and reach almost 500 billion passenger kilometers. At the same time, we estimate the cumulative average annual growth rate at 4.1%, which is slightly below the world average. Over the next 20 years, according to our forecast Russian airlines will receive, based on their needs, about 1,170 new aircraft.
The existing firm orders currently placed by airlines for various products in different categories cover about 47% of expected future demand. It is worth noting that this demand is met to the greatest extent in groups of narrow-body aircraft with a size above 120 seats. It's about 57%. Among this order, a significant share is occupied by orders for the MC-21-300 aircraft.
We also predict high demand in the segment of aircraft with a capacity of 60-120 seats, somewhere around 15% of the total demand, which is higher than the global average. This is primarily due to the fact that active work is currently underway, including with government support, to develop effective methods of stimulating sales, including the introduction of effective operating leasing. We are actively working with the State Transport Leasing Company to ensure that the proposals we create are interesting and attractive to airlines.
CIS countries. We continue to classify certain countries in the region in this format because, in our assessment, the general problems of socio-economic development, close economic, cultural, and interpersonal ties between our countries determine precisely similar trends. In fact, there is mutual dependence, including one that influences the development of the passenger transportation market. According to our estimates, the volume of passenger air transportation in the CIS countries will increase by 2.5 times until 2036. At the same time, in the global passenger turnover, passenger transportation in the countries of the CIS region is less than 1%.
We believe that, taking into account the pace of development, taking into account the stabilization of population migration indicators, the average annual growth rate of passenger traffic in the region as a whole over 20 years will be about 4.6%. Demand for new passenger aircraft there is an estimated 260 new aircraft in this region. Existing orders currently placed cover about 18% of expected demand. But it is worth noting that in the countries of this region the most active buyers are the secondary market, purchasing more than half of their total demand on it. This was taken into account in our forecast, so it may seem modest to you at first glance, but we see such forecast indicators specifically for new equipment.
China. The next most interesting market for us is the Chinese market. During the forecast period, China, according to our assessment and the assessment of global institutions, will demonstrate the highest dynamics of development, including the dynamics of development of passenger transportation. This will ensure that China moves from 4th position, from the regions we are considering, to 3rd position, second only to the countries in the aggregate of the Asia-Pacific region and Europe, and ahead of the indicators in 20 years North America and all other regions combined.
We expect passenger traffic in China to increase by more than 3.3 times over the next 20 years. Based on the compound annual growth rate, we see that the Chinese market could be over 6%, which would lead to the valuation that we are demonstrating. Over 20 years, the Chinese market will require more than 7,000 aircraft. This is equivalent to US$1 trillion based on list prices. If we talk about the order portfolio that Chinese airlines already have, it covers only 19% of future demand in this market. And there is something to fight for here. We estimate that the greatest demand is expected in the segment of narrow-body aircraft with a capacity of more than 120 seats. Currently, it is covered by 17% of orders, mostly Boeing and Airbus, as well as orders for the national Chinese C919 project. We believe that based on our current relationships and our potential development with China, we can claim a significant share of this market for the MC-21 aircraft.
Asian-Pacific area. If we talk about the Asia-Pacific region as a whole, but without China, it can be noted that, despite the relatively small excess of the growth rate of passenger turnover over the world average, the Asia-Pacific region in the forecast period will take almost the leading position in the world passenger turnover market. First of all, these are: India, Malaysia, Indonesia. These countries provide the main drivers for future development and make the Asia-Pacific region the most interesting market for all manufacturers, which can transform the structure of the world fleet in the future.
Regarding global passenger traffic, according to our estimates, the Asia-Pacific region will account for almost 20% of global passenger traffic by 2036. According to UAC, the total demand for new passenger aircraft in this market will be more than 8,600 units. At the same time, the emphasis will be on aircraft of greater capacity. Although, if we talk about the structure of orders, at the moment, based on our forecast, the current portfolio of orders already covers 43% of the expected demand. One such is essential distinctive feature In this market, it must be assumed that the demand for wide-body aircraft in this region will stand out in the general indicators of global demand; according to our estimates, it amounted to about 23%, which is slightly more than the world average.
Let's move on to the European market. For the forecast period, the European market for passenger transportation will retain its leading position in the world ranking, but will experience quite serious competition from dynamically developing economies. This will primarily concern long-haul transportation and wide-body fleets. At the same time, passenger turnover will almost double. The compound annual growth rate will be 3.5%. This is lower than the world average, but this suggests that the European market has already reached a fairly serious saturation in demand. Its current fleet is large enough to handle large volumes of traffic. At the same time, Europe’s share in the global passenger fleet will decrease slightly from 23% in 2016, and by 2036 it will be about 19%.
It is expected that European airlines could purchase more than 8,600 aircraft over the next 20 years. This forecast takes into account the fact that the European region is a leader in the ranking of secondary market donors. It is rapidly renewing its fleet, transferring older aircraft to other regions. If we talk about the current order portfolio, it can be noted that in none of the capacity segments does the current order portfolio cover demand by more than 30%. Naturally, in the same region, even visually it is clear, there is a high proportion of development of narrow-body fleets. The largest share is narrow-body aircraft with a capacity of more than 140 seats.
Latin America. According to our estimates, during the forecast period, the growth rate of passenger turnover in Latin America will be significantly higher than the global one, but the initially modest indicators of total GDP in this region will most likely lead to the maintenance of a serious distance in the total volume of passenger traffic relative to the regional leaders in passenger turnover.
At the same time, starting from a small base today, we expect a threefold increase in passenger traffic with a cumulative average annual growth rate of passenger air traffic of about 5.7%. But its share in the global passenger transportation market will not exceed 6.5% in 20 years. The total demand for new passenger aircraft is estimated at 3,400 aircraft. Of the announced firm orders for new aircraft, only 29% of our forecast demand is covered. We expect a record large share of deliveries in the segment of narrow-body aircraft with a capacity of 120 or more seats.
Near East. Also an interesting market for UAC. Along with China and Latin America, it will significantly outpace other regions of the world in terms of growth in passenger turnover, but it is small in population and has a small total GDP on a global scale, which will not allow reducing the distance between the leaders and this region.
We expect that by 2036 passenger traffic will increase by almost 3.2 times, with a compound annual growth rate of passenger traffic of approximately 6%. The region's share in total passenger traffic will increase from 9.5% in 2016 to 12%. This is a big leap. It is worth noting that we see more than half of the deliveries of new aircraft in the wide-body segment. Due to this, the share will increase to a greater extent. At the same time, 2/3 of these deliveries are expected in the segment of the group of wide-body aircraft, the capacity of which is higher than 320 seats. It can be said that airlines in the region will provide up to 60% of the total global demand for these ultra-large aircraft.
North America. The air transportation market of the region's countries will develop and follow general global trends, but, taking into account the redistribution of global economic activity, it will gradually lose its position. At the turn of 2036, this market will give way to the palm of transportation not only to Europe, but will also be behind China and the Asia-Pacific region. At the same time, the volume of passenger air transportation, according to our expectations, will almost double, with an average annual growth rate of passenger turnover of 2.7 times.
A low figure, almost the same as in Europe, but this is due to the fact that the market is highly saturated, the initially large current structure of the fleet, the market saturation rate is already quite high. What is important, according to our estimates, the North American market share in the overall global balance will decrease from 24% to 17%, losing its position to emerging markets. A characteristic feature of the region is a high share in the expected demand for regional jet aircraft from 60 to 90 seats. This is about 19% of the total number of new aircraft in the region. At that time, according to general global averages, this segment accounts for no more than 6%.
Africa. Let us note the prospects for the passenger transportation market in Africa. According to the UAC, they will be determined primarily by more than a 50% increase in population over the next 20 years. Combined with rather modest indicators for the economic development of the region. The region as a whole is highly fragmented. Central and Northern Africa are very different from each other in terms of transportation indicators and in their structure of formation route networks. This makes certain adjustments that we took into account in our forecast. As a result, we give the African market an expectation that by 2036 the volume of passenger traffic will increase by 2.5 times, with a cumulative annual rate of passenger air traffic at the level of global indicators of 4.5-4.6%. The share of the global passenger market will remain virtually unchanged, for 2016 it is 2.1%, for 2036 - 2.2%. African airlines, through purchases on the secondary aircraft market, will satisfy about 41% of the total demand for passenger aircraft.
This circumstance largely determined the amount of demand for new passenger aircraft, which is represented quite modestly. There are less than 1,00 aircraft for 20 years. In this situation, contrary to the current structure of the fleet, we see that the market for wide-body aircraft promises to become the most profitable in this region. Let’s say, not in terms of the number of seats, but in terms of the amount of income that will come to manufacturers from the sale of this aircraft. We estimate the demand for wide-body aircraft alone to be more than 200 units over 20 years.
In general, if we talk about the structure of the market and demand that we forecast for a 20-year period, it can be noted that the global fleet will almost double and reach 47,000 aircraft. At the same time, it will be significantly updated, largely due to the fact that part will be due to the need to update the current fleet of retiring vessels, and part will be due to the need associated with the development of air transportation itself.
In the current forecast 20 years, we estimate that, in total for all markets, about 42,000 new passenger aircraft will be required. It is worth noting that this demand is influenced by many factors, both demand purely in the global economy and an increase in the global population. According to estimates by national and international organizations, the population will grow by more than 1.3 billion people in the next 20 years, which will amount to an increase of about 20%. Global GDP will increase by more than $50 trillion.
The doubling of the passenger aircraft fleet will be influenced by changes and modernization of the existing infrastructure, and the supply on the market of more and more aircraft with new efficiency indicators, which will lead to lower transportation costs and increased mobility of the population.
In many regions we expect government support for airlines. There are many national programs that stimulate the development and modernization of ground infrastructure and the development of airline fleets. It is worth noting that we see the largest increase (more than 140%) in the segment of large narrow-body aircraft. This is exactly the class where the MS-21 proposal falls.
We estimate that the fleet of narrow-body aircraft with a capacity of less than 120 seats will almost double. As part of the implementation of the wide-body project, we see that the fleet of wide-body aircraft with a capacity of up to 300 seats will increase by more than 70%.
Thank you for your attention.