Bombardier Commercial AC Forecast 2012-2031pdf70620

Commercial Aircraft
market
forecast
2012-2031
table of contents
Bombardier commercial Aircraft

Market forecast 2012-2031
Executive Summary
03
Economic Trends
07
Airline Industry Trends
16
The Forecast
28
Conclusion
36
Geographic Details
38
02
executive
summary
Bombardier Commercial Aircraft

03
Executive Summary

Welcome to the Bombardier

Aerospace Commercial Aircraft
Market Forecast, our 20-year view
of the market for 20- to 149-seat
aircraft.
World airline profitability in 2011 was estimated
by International Air Transport Association
(IATA) to reach $7.9 billion, the second
consecutive year in which all regions were
break even or profitable. This expansion
was fueled by continuous traffic growth and
steady increases in overall ticket prices.
These positive trends were countered by
rising oil prices, continued financial turmoil in
the Eurozone and increased political tension
in the Middle East and North Africa. While
airline profitability was considered fragile,
it was contrasted by another record year for
aircraft orders. The growing backlog in the
large single-aisle aircraft segment remains
a concern, as a sharp increase in traffic demand
would be required to absorb the excess
DELIVERY FORECAST (UNITS)

Segments
Deliveries
20- to 59-seat
300
60- to 99-seat
5,600
100- to 149-seat
6,900
20- to 149-seat total
12,800
Source: Bombardier Commercial Aircraft Market Forecast 2012-2031.
capacity represented by these orders. After

even a few tough years of industry consolidation and tremendous discipline in constraining
capacity growth, it is difficult to understand
the rationale behind deliberately introducing
excess capacity back into the system. As optimization is always the survival instinct of the
aviation industry, it will eventually find its way
to adapt, adjust and ascend going forward.
Mature markets
IHS Global Insight reduced its long term
forecast of GDP growth from 3.4% last year
to 3.26% in 2012. North America and Europe
are forecast to have below-average GDP
growth for the next 20 years. In a mature
market, where route network and business
models are fully established, most demand
04
Executive Summary
for commercial aircraft will result in the need
to rejuvenate an ageing fleet as it approaches
retirement. Even though these regions are
expected to see only small organic growth
year over year, their significant installed bases
will continue to require a large number of new
aircraft for the next 20 years.
Growth regions
The growth regions of Africa, Asia/Pacific,
Latin America, Middle East and Russia & CIS,
where long-term GDP growth is forecast
above average, will require a significant
number of new aircraft to support the growth
of the aviation industry. In addition to more
capacity, new airline business models and
network connectivity are being tested or
optimized by airlines and entrepreneurs.
Aircraft in various capacities are all needed
to help shape the development of the
industry in these growth regions.
Optimization
The financial viability of the airline industry
is extremely dependent on the external environment, yet the industry is also very resilient,
due to its relentless drive for optimization.
The increased price of oil predicted by the
U.S. Energy Information Administration (EIA)
is the single most concerning factor in airline
economics over the forecast period. This
concern is further amplified by the increase

TOTAL FLEET UNITS

Total Fleet
Units
11,200
17,000
20,000
16,000
9,000
12,000
8,000
4,000
5,100
2,500
3,600
0
2011
6,800
1,200
2031
100- to 149-seat
60- to 99-seat
20- to 59-seat
Source: Bombardier Commercial Aircraft Market
Forecast 2012-2031, OAG Aviation Solutions.
in oil price forecast, since EIA issued its

Annual Energy Outlook last year, by nearly
$20, reaching $126 per barrel average for
next 20 years. While airlines successfully
managed increasing fuel costs by raising
ticket prices last year, the continuous pressure
transferred from cost to ticket price will soon
reach the tipping point of consumer price
resistance. Aircraft with the lowest cost and
high performance capability will therefore
be favored going forward.
Airlines strive to optimize their fleet

solutions to best serve their customers
needs. Airline customers expect frequency,
schedule, comfort and competitive fares
while traveling on modern aircraft. New
aircraft designs continue to focus on
optimizing performance, lowering fuel
consumption, reducing environmental footprint and maximizing cabin comfort.
05
Executive Summary

The 20- to 149-seat market

Aircraft deliveries in the 20- to 59-seat market
will decline substantially over the next 20 years.
This capacity will gradually shift to larger and
more economical regional aircraft. Demand
for new aircraft in this larger, more economical
regional aircraft segment is expected to
increase in the latter half of the forecast
period, driven mainly by the anticipated
availability of new technology. Some 300
units will be delivered by the end of the
forecast period. In the near and mid-terms,
the pre-owned markets will continue to
supply the aircraft needed in this segment.
In particular, Russia, Africa and Latin America
will see considerable absorption of used
50-seat regional jets.
Regional airlines are gradually anchoring
their business models around large regional
aircraft in the 60- to 99-seat segment, both
turboprops and jets. With increased capacity,
lower per-seat operating costs and a seamless service offering, large regional aircraft
connect route networks by adding new city
pairs. This service provides connections not
only between major airports, but also linking
secondary and tertiary airports. With some
5,600 units forecast for delivery, this segment
will experience the strongest fleet growth
over the next 20 years.
The 100- to 149-seat aircraft segment will

enjoy the strongest growth in terms of deliveries. This segment is currently dominated
by ageing aircraft. Thanks to step change
engine technology, the arrival of new aircraft
specifically designed for this segment will
invigorate market demand to further optimize
airline route networks and profitability. We
forecast deliveries of 6,900 aircraft in the 100to 149-seat segment over the forecast period.
The commercial aviation industry is an

integral component of the global economy.
The long-term economic outlook supports
continuous demand for new, optimized
capacity and more fuel efficient aircraft, with
deliveries of 12,800 new aircraft predicted
over the next 20 years
06
economic
trends

07
Economic Trends

Economic and air travel

growth
The worlds recovery from the 2008 financial
crisis began in 2009 and has continued, at
varying paces and with varying degrees of
success into 2012. Growth in gross domestic
product (GDP) has reflected this variation,
reaching 4.1% in 2010 and 2.7% in 2011. The
recovery has slowed due to continuing economic concerns, notably the Eurozone crisis,
high and volatile oil prices (as discussed
below) and Chinas ability to sustain its
comparatively rapid growth, the recovery
has slowed. As a result, IHS Global Insight has
reduced its expected rate of GDP compound
annual growth for the 2012 2031 forecast
period, from 3.4% (2011 2030) to 3.26%.
The economic recovery is taking longer than
expected in mature markets, while growth
in emerging economies has returned to
pre-crisis rates; whether they will be able to
sustain this pace remains to be seen.
Demand for air travel, and with it the health
of the worlds airline industry, depends heavily
on the strength of the economy. Most recently,
IATA reported a 7.4% increase in international
passenger travel (based on revenue passenger
kilometers (RPKs)) for the month of April 2012,
compared to April 2011. Demand for air travel
WORLD REAL GDP GROWTH %, 2011
World Average 2.7%
1.8%
4.8%
1.8%
9.2%
6.8%
3.44%
4.2%
1.3%
Source: IHS Global Insight 2012.

Note: GDP = Gross Domestic Product
is also reflected in orders for new aircraft. New

aircraft order intake (encompassing 20 - 220
seats) more than quadrupled from 2009 to
2011. Net orders rose to 2,381 units in 2011, up
from the 2010 tally of 1,414 units, which itself
more than doubled the 2009 pace of 556
aircraft orders.
08
Economic Trends

09
COMMERICAL AIRCRAFT ORDERS AND GDP GROWTH

3500
7%
6%
3000
5%
2500
4%
3%
2000
2%
1500
1%
0%
1000
-1%
500
-2%
0
-3%
1971
The continuing recovery in demand for air

travel is also expected to see a return to
commercial service of some of the aircraft
currently parked. The parked commercial
aircraft fleet has declined by 9% year-overyear, to approximately 2,220 at the 2011 year
end. This total is down from the peak of 2,496
aircraft idled in 2009, but it remains above the
10-year low of 1,681 aircraft parked in 2007.
Regionally, economies outside North America
and Europe are expected to lead the world in
GDP growth from 2012 to 2031. According to
IHS Global Insight, China is expected to grow
1975
1980
1985
1990
1995
Commercial Aircraft Orders
2000
2005
2010
GDP Growth
Sources: Bombardier Analysis, OAG Aviation Solutions, IHS Global Insight
at 6.6% annually, followed by Africa, at

4.4%; Latin America, at 4.1%; Middle East,
3.8% and Asia/Pacific at 3.4%. In contrast,
the North American economy is expected
to grow at 2.6%, with Europe trailing, at 2.1%.
The overall compound annual growth rate,
as noted, is expected to be 3.26%, with
non-North American or European economies
accounting for 61% of the growth.
Demand for air travel

is also reflected in orders
for new aircraft.
Economic Trends
10
PROPENSITY TO TRAVEL
10
New Zealand
Hong Kong
Switzerland
Israel
Brazil
Norway
United
States
Portugal
Trips per Capita
North America and Europe have historically

represented both the largest commercial
aircraft fleets and the largest markets for
new aircraft. This year, the Bombardier
Commercial Aircraft Market Forecast anticipates total demand for new aircraft in the
20- to 149-seat segments to be evenly divided between mature and emerging markets.
Although starting from much smaller baselines (and assuming proportionate growth
in aviation infrastructure), demand for new
aircraft is expected to be particularly strong in
emerging markets, such as China, Asia/Pacific
(including India) and Latin America. Europe,
Africa, and the Middle East are expected to
require somewhat fewer aircraft during the
period and North American forecast
demand remains unchanged.

Italy
Germany
Qatar
Netherlands
Russia
China
0.1
India
0.01
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2011 Per Capita GDP
As a countrys per capita GDP grows, so

does its residents desire for travel, and this
desire in turn fuels demand for aircraft. The
Bombardier Commercial Aircraft Market
Forecast, which anticipates long-term growth
through the continuing economic recovery,
presents a positive picture of commercial
aircraft demand through the 20122031 period.
Overall fleet growth of 52% (2.1% CAGR) and
12,800 new aircraft deliveries approximately
half of which will be needed to meet the
worlds growing demand for air travel - is
estimated over the forecast period.
Passengers originating from respective country, GDP in 2005 USD.

Sources: IHS Global Insight 2012, MIDT data, Bombardier Analysis.
Population Growth and

Urbanization
The propensity for air travel is closely associated with wealth (as represented by
per capita GDP) and urbanization. As both
wealth and urbanization increase, particularly
in emerging markets, the impact on commercial aviation is expected to be profound.
The Organization for Economic Co-operation

and Development (OECD) estimates that
middle-class consumer spending, as a reflection of a regions per capita GDP, will expand
rapidly in emerging markets. In Asia/Pacific
(including China and India in the OECD
analysis), middle-class consumer spending
is expected to balloon, from $5.0 trillion in
2009, to $32.6 trillion in 2030 on a purchasing
Economic Trends

GDP GROWTH RATES

(2012-2031)
8%
7.4%
6.6%
7%
6%
5%
4%
4.4%
4.1%
3.26%
3.8%
3%
2.6%
2.4%
North
America
Asia/Pacific
(ex. China,
India)
2.0%
2%
1%
World
India
China
Africa
Latin
America
Middle
East
Europe
Sources: IHS Global Insight, Feb 2012, Bombardier Analysis.
MIDDLE-CLASS CONSUMER SPENDING IN TRILLIONS USD*

power parity basis. In other emerging markets,
the increase is expected to be substantial, if
not spectacular. Spending in Central/South
America is expected to grow from $1.5 trillion
to $3.1 trillion, while the sub-Saharan Africa
will see middle-class consumer spending
grow from $0.8 trillion to $2.0 trillion by 2030.
Spending in the Middle East and North Africa
is expected to grow from $0.3 trillion to $0.8
trillion over the same period.
$1.5
2009
$21.3
$5.6
$8.1
$5.0
$0.3
$0.8
Middle East & North Africa

Sub-Saharan Africa
Central & South America
2030
$55.7
$5.8
$11.3
$32.6
$3.1
PROJECTED
North
Europe
America
Asia/Pacific
Source: OECD. * On a purchasing power parity basis.
$2.0
$0.8
11
Economic Trends

ASIA, AFRICA AND LATIN AMERICA URBANIZATION

1,042
2025
2009
Population living in urban areas
Millions
862
661
561
560
494
341
739
624
461
Latin
America
356
Rest of
Aisa 2
1 Urban population according

2 Excluding China and India.
China
India
399
Africa
to national definitions.
Sources: United Nations Population Division Department of Economic and Social Affairs,
World population prospects: The 2009 revision, March 2010; McKinsey Global Institute analysis.
In contrast, while middle-class consumer

spending in mature markets is expected to
continue growing, the increases are much
smaller, with the result that, by 2030, Europe
and North America together are expected to
account for approximately 30% of the worlds
middle-class consumer spending, compared
to approximately 64% in 2009.
531
285
Europe
North
America
12
Economic Trends

CHINA EXPENDITURE ON AIR TRAVEL

AND GROSS DOMESTIC PRODUCT
Billions of 2005 U.S. $
100
12,000
90
10,000
80
70
8,000
60
6,000
50
40
4,000
30
20
2,000
10
0
Expenditure on air travel (left scale)

Source: Bombardier Analysis and IHS Global Insight.
Gross Domestic Product (right scale)
24
20
22
20
18
20
20
20
16
20
14
20
12
20
10
20
19
98
20
0
0
20
0
2
20
0
4
20
0
6
20
0
8
96
19
19
94
19
92
19
90
Rapid urbanization is also a feature of many

of these fast-growing economies and presents
an even more dramatic picture of large-scale
global change. The United Nations estimates
that the population of the worlds urban areas
will increase by more than 1.1 billion people
over the period from 2009 to 2025. Urbanization will continue in Europe, and more so in
North America. However, approximately 92%
of that urban growth will occur in Africa, Latin
America, India, China, and the rest of Asia,
leading to increased demand for air travel in
those regions.
13
Economic Trends

Oil price and volatility

6.0
5.0
4.0
3.0
2.0
Fuel
1.0
Labour
3Q11
1Q11
3Q10
1Q10
3Q09
1Q09
3Q08
1Q08
3Q07
1Q07
3Q06
1Q06
3Q05
1Q05
3Q04
1Q04
3Q03
1Q03
3Q02
1Q02
3Q01
1Q01
3Q00
1Q00
0.0
Source: Air Transport Association of America, 2012.
AVERAGE OF WEEKLY CUSHING AND BRENT SPOT PRICE FOB 1

(Dollars per Barrel)
$130
$120
YTD 2012 Avg.: $110.94
$110
$100
2011 Avg.: $103.16
$90
2010 Avg.: $79.72
$80
$70
Source: Energy Information Administration. Note: 1. FOB = Freight on board
3-12
2-12
1-12
12-11
11-11
10-11
9-11
8-11
7-11
6-11
5-11
4-11
3-11
2-11
1-11
12-10
11-10
10-10
9-10
8-10
7-10
6-10
5-10
4-10
3-10
$60
2-10
From an average price of $80 a barrel in 2010,

oil prices rose by $20 to $100 per barrel in
2011. In the final months of the year, the prices
spiked higher, and continued upwards by
8% in the first five months of 2012. Although
peak prices have not reached the $147 per
barrel experienced in July 2008, neither have
they retreated to the December 2008 low of
less than $35 per barrel. With 2011 average oil
prices 25% higher than 2010, we anticipate
that prices will remain above $100 per barrel
through 2012 and, indeed, throughout the
20-year forecast period. In fact, the U.S.
Energy Information Administration (EIA)
revised its 20-year average oil price forecast
from $107 per barrel in 2011 to $126 per barrel
in 2012 (Annual Energy Outlook 2012 Early
Release), a nearly $20 increase.
Unit Operating Cost (Cents per Available Seat Mile)
The outlook for consistently high oil prices

and continued oil price volatility presents
some of the biggest challenges for the world
airline industry. Jet fuel which closely tracks
the price of crude oil represents airlines
largest single expense, now amounting to 34%
of operating costs on average, according to
IATA. With this large and growing influence,
oil prices and oil price volatility are major determinants of the size and other make-up of
the commercial aircraft fleet of the future.
LABOUR AND FUEL UNIT COST HISTORY
14
Economic Trends
Although continuing high oil prices will

challenge airlines profitability at least
through 2012, the arrival of new aircraft
incorporating technological advantages
that deliver direct operating cost reductions
will accelerate the retirement of older, less
fuel-efficient aircraft types.
Forecast
140
Average: $126 per barrel

120
100
80
60
AEO2012 Early Release Reference
40
AEO2011 Reference
20
Source: Annual Energy Outlook (AEO) by Energy Information Administration.
2030
2028
2026
2024
2022
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
0
1986
Looking ahead, we believe that oil prices

will remain significantly above the historical
averages from just a few years ago and that
prices will continue to demonstrate significant
volatility over the near term.
Actual
1984
Oil price volatility challenges airlines ability

to forecast passenger volumes, airline workloads and fleet replacement timing decisions,
whether on a daily, monthly or annual basis.
160
1982
While oil prices directly affect airlines profitability, they also influence fleet decisions and
drive network optimization strategies. These
influences are reflected in increasing demand
for highly fuel-efficient, high-productivity
solutions, such as modern turboprop aircraft.
OIL FORECAST
1980
Further, as observers have noted, a continuation of the unrest in the Middle East, particularly the threatened closure of the Strait of
Hormuz (a major oil trading passage), could
drive oil prices to the $150 per barrel range,
resulting in an estimated 2012 average price
of $135 per barrel.

15
Airline
industry
trends

16
Airline industry trends

AIRLINE INDUSTRY NET PROFITS
Airline economics
(Billions U.S. $)
Region
2007
2008
2009
2010
2011
2012F
World
12.9
-16.0
-4.6
15.8
7.9
3.0
North America
3.7
-9.6
-2.7
4.1
1.3
1.4
Europe
6.4
0.0
-4.3
1.9
0.5
-1.1
Asia/Pacific
3.0
-4.7
2.6
8.0
4.9
2.0
Middle East
-0.1
-0.3
-0.6
0.9
1.0
0.4
0.1
-1.4
-0.5
0.9
0.3
0.4
-0.2
-0.1
-0.1
0.1
0.0
-0.1
Latin America
Africa
Source: International Air Transportation Association (IATA), June 2012.
Fragile profitability
The financial outlook for the worlds airlines
remains in a state of flux as broad economic
concerns continue to work their way through
our deeply interconnected, interdependent
global economic system.
IATA data covering the first four months

of 2012 reflected an overall 7.1% increase in
passenger traffic, while capacity (available
seat kilometres (ASKs)) increased 4.9%. As a
result, passenger load factors grew to 77.5%.
Against this backdrop, demand for air

transportation remained strong through
2011 and into 2012. IATA reported that total
passenger demand increased 5.9% in 2011,
with a 4.8% expected increase in total
passenger kilometers flown in 2012.
Global airline revenues have increased

throughout the period of economic recovery,
from a low of $476 billion in 2009, to $547
billion in 2010, and to $597 billion in 2011,
representing a 9.3% year-over-year increase.
According to IATA, global airline profitability
improved significantly, from a net loss of

$4.6 billion in 2009 to total net profits of $15.8
billion in 2010, before declining to $7.9 billion
in 2011. Should the world economy slip further
to a growth rate of just 2%, IATA observes
that historically, this slow growth rate has
resulted in the airlines sliding into industrywide losses.
17

IATAs central forecast for 2012 anticipated
a further decline in airline profitability, to
just $3.0 billion. Regionally, Asia/Pacific is
expected to perform best, as per IATAs central
forecast scenario, indicating profitability of
$2.0 billion. North America airline profitability
is expected to be $1.4 billion, Middle East
$0.4 billion and Latin America $0.4 billion.
Airlines in Europe and Africa are expected
to incur new losses of $1.1 billion and $0.1
billion, respectively.
In summary, the economic recovery is
continuing and demand for air transportation
also continues to build with it, subject to the
challenges posed by slow growth in global
gross domestic product and high oil prices.
In the face of these challenges airlines have
shown creativity and consistency, in addressing their expenses a scenario in which
operating a modern, highly fuel-efficient
aircraft fleet remains the single most
important strategy for business viability
and long-term success.

18
U.S. AIRLINE SEGMENTATION PROFITABILITY/LOSS*
Airline business models
Regional carriers typically operate smaller

aircraft, such as regional jets and turboprops
with fewer than 100 seats, on short- and
medium-haul routes. By representing mainline
carriers to meet passenger demand for service
and frequencies in markets with lower volumes,
regional carriers enable their mainline partners
to right-size aircraft use throughout their
networks. This specialization strategy for
network optimization has developed strong
linkages between mainline and regional carriers, which now account for one third of all
commercial passenger flights worldwide.
Low-fare carriers typically operate aircraft
from 70 to 200 seats on point-to-point service
connecting secondary airports. By separating
ancillary revenue from the base fare, the
15.0
Operating Profit/Loss as % of Total Operating Costs
Three distinct business models are present in

the passenger segment of the airline industry:
mainline carriers (sometimes referred to as
network carriers), regional carriers and lowfare (or low-cost) carriers. Mainline carriers
are characterized by fleets of 100-plus seat
aircraft serving multiple cities and countries
through hub-and-spoke networks. Due to
cost pressures, notably high fuel prices, and
relentless competition, mainline carriers have
focused on the replacement of older equipment with newer, more efficient aircraft.

10.0
5.0
0.0
-5.0
Low-Cost**
Regional
Mainline
-10.0
4Q
2008
1Q
2009
2Q
2009
3Q
2009
4Q
2009
1Q
2010
2Q
2010
3Q
2010
Source: U.S. Bureau of Transportation Statistics, May 2012.

*Most current available data. **Low-Cost Carriers are also referred to as Low-Fare Carriers
low-fare carriers have thereby made air travel

accessible to passengers who could not
otherwise afford it. Low-fare carriers, which
typically have lower cost bases than mainline
carriers, are now present in nearly every
part of the world and their market share has
increased significantly, particularly in North
America and Europe.
4Q
2010
1Q
2011
2Q
2011
3Q
2011
19

COMMERCIAL AIRCRAFT CAPACITY WORLDWIDE BY SEAT CATEGORY

2.0
Actual
Forecast
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
2000
2005
20- to 59-seat
2010
60- to 99-seat
2015
2020
2025
2030
100- to 149-seat
The growing importance of regional carriers

in the U.S. is reflected inthe growing size of
regional aircraft to an average size of 37 seats
in 2000 to 50 seats in 2005 and to 56 seats
today. Regional carrier average trip length
has also increased over this period, from 296
statute miles in 2000, to 464 statute miles in
2010 and to 468 statute miles as of the first
half of 2011. A similar pattern is recognizable
in Europe, at least partly due to less restrictive
scope clauses, where average regional aircraft
size has increased from 63 seats in 2001, to 72

seats in 2009 and to 78 seats today. Although
European average regional airline stage
lengths are shorter than their U.S. counterparts,
these have increased from 384 statute miles
to 390 statute miles over the same period.
Continued turbulence in the airline industry,
including insolvency, consolidation, outsourcing, unbundling of services and attempts by
some mainline carriers to reinvent themselves
by shedding legacy cost structures, has

resulted in the three established business
models becoming less individually distinct.
However the need to right-size aircraft to
market needs remains paramount in controlling costs, especially as commercial aircraft
capacities range from fewer than 50 seats
to more than 600.
20
2,000
1,500
1,000
Source: Air Transport Association of America (ATA), 2012

FTE: Full Time Equivalent employees, most current annual data
Additional labour cost control outsourcing

initiatives have addressed catering operations,
maintenance services and reservations, and
have helped lower airline costs dramatically.
Continued loosening of scope clause rules
(to permit regional carriers to operate even
large aircraft) as well as the development of
new business models, will increase demand
for air transportation. Bombardier expects
these trends to continue.
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
500
1993
At the industry level, selective outsourcing of

scheduled passenger operations to regional
carriers has increased the mainline carriers
access to passengers in smaller centres, who
would otherwise be cost-prohibitive to serve
with larger aircraft. As low-cost carriers,
regional airlines can generate profits on thin
routes that their mainline counterparts find
too costly. One constraint on this strategy has
been scope clauses negotiated between
mainline carriers and their unionized flight
crews, which restrict the use, number and
seating capacity of regional airlines aircraft
in mainline carriers network. Scope clauses
are a predominantly U.S. and European
phenomenon.
2,500
1992
While airline labour costs have decreased as

a percentage of airlines total costs, largely
due to the increase in fuel prices, they remain
the airlines second biggest expense category
and one of the largest sources of optimization
opportunities.
3,000
1991
Labour trends
21
U.S. AIRLINE LABOUR PRODUCTIVITY
Productivity, ASKs (000) per FTE
For longer routes with less traffic, regional

jets in the 60- to 99-seat segment present an
optimized solution. While small, single-aisle
jets provide longer-haul capacity up to 3,000
nautical miles and routing flexibility, and
advanced technology turboprops are best
suited to short and medium-haul flights.


22
DELIVERY BY ENGINE TYPE 20- to 99-SEATS
Units, %, Actual 2001 and 2011, Forecast 2012-2031 period

Oil @ $26 per barrel
Oil @ $111 per barrel
Oil @ an average of
$126 per barrel
319
12%
248
5,900
45%
48%
Turboprop
55%
52%
Regional Jet
2011 Actual
2012-2031 Forecast
Units
88%
2001 Actual
Sources: Bombardier Commercial Aircraft Market Forecast 2012-2031, Energy Information Administration 2012-2031 forecast.
Turboprops and Jets:

Optimization in practice
Aircraft and engine types are critical choices
in optimizing airline fleets and networks. The
greatest efficiencies are achieved by deploying
turboprop aircraft on short- and medium-haul
markets and jet aircraft on longer routes.
Rising fuel prices expanded the use of
turboprops worldwide and led aircraft
manufacturers to increase the size and
capability of these aircraft. These aircraft
began operating in mainline carriers fleets in

significant numbers in 2007. Advanced turboprops will continue to play an integral role
in the regional airline marketplace as carriers
confront the dual pressures of rising fuel costs
and increasingly restrictive environmental
regulations. The comparatively lower fuel burn
of turboprops, compared to regional jets of
similar size, will enable carriers to maintain
capacity and shrink their overall environmental
footprint. Modern 70-passenger turboprop
aircraft represent a cost-effective replacement
on routes previously served by 50-passenger

jets, which are no longer in production.
Of approximately 5,900 aircraft to be delivered
in the 20- to 99-seat segment, Bombardiers
Commercial Aircraft Forecast for 2012 - 2031
anticipates based on oil at an average $126
per barrel that 48% will be modern turboprop airliners, the first time this product
category has achieved this degree of market
penetration. Further, of the approximately
2,850 turboprop aircraft to be delivered over

23
FLEET EVOLUTION FROM

2011 TO 2031
20- to 149-seat Fleet
17,000
Growth
11,200
Todays Fleet
(units)
Todays Fleet
(units)
the period, approximately 2,700 or 95% will

be in the 60- to 99-seat segment, which is expected to experience substantial growth over
the forecast period.
The balance of the forecast deliveries in the
20- to 99-seat segment will be larger regional
jets, which airlines will require to optimize
seating capacities, maintain passenger comfort and accommodate traffic growth while
reducing unit costs.
Aircraft retirements
Aircraft retirements and replacements are key
product life-cycle milestones in shaping future
aircraft deliveries and fleet composition.
Historically, older aircraft are replaced to
capture the financial, operating and maintenance advantages offered by newer, more
cost effective and more fuel-efficient aircraft,
as they become available.
Other factors that influence aircraft retirement
timing decisions include international and
local airport noise and emissions regulations
5,800
(45%)
Replacement
7,000
(55%)
Retained
Fleet
4,200
12,800
Deliveries
2031 Fleet
(units)
and fees; airline branding; the competitive

environments; as well as financial and tax
considerations (such as maintenance costs,
depreciation and incentives), airline growth
strategies, aircraft economic structural life, the
certification status of new aircraft development
programs and replacement opportunity factors,
such as delivery slots.
This year, the number of anticipated aircraft
retirements over the 20-year forecast period
has been increased by a total of 300 units,
from approximately 6,700 in our 2011 forecast
to 7,000.
IN-SERVICE AIRCRAFT 15 YEARS OF AGE OF OLDER

2500
2000
Units
Much of the reason for this increase lies in oil

prices, which have seen a $20 per barrel jump
on average prices over last year, reaching an
average $126 per barrel throughout the forecast period. A further factor in the increased
forecast retirements is Russian regulators
decision to ground ageing, domestically produced aircraft. However, since the utilization
of these aircraft is typically very low, they will
not be replaced on a one-to-one basis.

1500
1000
500
The increased retirements are expected

primarily in the 20- to 59-seat segment (an
increase of 200 units, from 2,500 retirements
to 2,700), as well as in the 60- to 99-seat
segment (an increase of 100 units, from 1,200
retirements to 1,300).
Gradually rising oil prices over the forecast
period add burden to aircraft operating
economics. Twenty- to 59-seat aircraft are
particularly affected due to the resulting
higher cost per seat, and hence the increased
retirements in this segment. This also applies
to the 60- to 99-seat segment towards the
end of the next decade due to the ageing
70-seat and 90-seat aircraft that entered
service in the early 2000s.
Most aircraft move through a recognizable
series of product life cycle stages. Passenger
aircraft, when removed from commercial
10- to
19-seat
20- to
39-seat
40- to
59-seat
60- to
99-seat
100- to
149-seat
150- to
174-seat
175- to
219-seat
220+
seat
Sources: OAG Aviation Solutions, Bombardier Analysis.
operation with front-line carriers, typically

move into cargo operations. Some others
move to less demanding markets and applications, serving commercial operators with
different utilization needs, different operating
environments and different business models.
As a significant number of 50-seat regional
jet airliners reach 20 years of age, Bombardier
expects many will be converted into freighter
aircraft. Small freighter aircraft (with payloads
of 5,000 to 20,000 lbs) are expected to be in
demand to replace a large fleet of all-cargo
aircraft currently in service around the world,
nearly all of which are limited-range turboprops averaging 29 years of age. The constant
evolution of the regulatory environment also

influences the pace and pattern of aircraft
retirements and, thereby, the fleet mix. During
the past 40 years, regulations imposed by
the International Civil Aviation Organization,
Committee on Aviation and Environmental
Protection (ICAO/CAEP) led to the phase-out
of noisier aircraft from U.S. and European
commercial fleets. New ICAO/CAEP noise
and emission standards will further affect
the global aviation fleet. Most recently, the
European Union has implemented an
Emissions Trading Scheme that, since
January 1, 2012, has applied to commercial
aircraft operating in European airspace.
24
COMMERCIAL AIRCRAFT GENERAL RETIREMENT PROFILE
The typical life cycle stages of aircraft use are

also influenced by seemingly unconnected
external events. Following the attacks of
September 11, 2001 for example, older aircraft
retirements accelerated and even some new
model aircraft were temporarily parked. Now,
almost 11 years later, not all of these aircraft
have returned to active service.
In sharp contrast, the near-term period will

see the introduction of new-generation 100to 149-seat aircraft, which are expected to
account for 53% of the total 20- to 149-seat
fleet in 2031. The response to the arrival of optimized, new generation aircraft is expected to
result in significant retirements and deliveries,
amounting to 3,000 retirements and 7,000
new aircraft deliveries.
100%
90%
80%
70%
% of fleet active
Of the current fleet of 20- to 149-seat commercial passenger aircraft, Bombardier anticipates that 60% will retire by 2031. Looking in
more detail, we expect the fewest retirements
in the 60- to 99-seat segment, and the most
70% of todays fleet in the 20- to 59-seat
segment. These aircraft will be retired due to
their comparatively higher per-seat operating
costs and high fuel costs. Without the advent
of new technology-advanced, in-production
20- to 59-seat aircraft in the near-term forecast period, Bombardier expects this segment
to decline dramatically, from 33% of todays
20- to 149-seat fleet, to just 8% in 2031.

Standard
Commercial Passenger Aircraft
Retirement Curve
60%
50%
40%
30%
20%
80% retired from commercial passenger service
10%
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45
Source: Bombardier Analysis.
More than half of the current commercial

aircraft fleet will be replaced in the next 20
years, a slightly greater percentage than
expected last year, due to technical obsolescence, cost inefficiencies and age. The
increasing pace of older aircraft retirements
will have a positive impact on demand for
new aircraft.
25

26
Airlines and the environment

Environmental issues and increasing environmental regulation will increasingly shape the
worlds airline industry and infrastructure over
the 2012 2031 forecast period. These issues
can be broadly categorized as: local air
quality, aircraft emissions and community
noise. The aviation industry has improved
its performance in these areas consistently
over more than 50 years.
Greater fuel efficiency directly boosts airline
profitability and aircraft operations have
become 20% more fuel efficient over the
past 10 years alone. Modern aircraft now
achieve fuel efficiency of 3.5 litres per 100
passenger kilometers, roughly comparable
to todays leading hybrid passenger cars,
with much greater speed.
Other environmental performance highlights:
Todays aircraft fly three times farther

on the same fuel than 30 years ago, a

75% gain in fuel efficiency per passenger
kilometer.
New aircraft are 70% more fuel efficient
than 40 years ago.
The maximum range of commercial jet
aircraft has increased to 15,200 km from

5,190 km in 1960, carrying more passengers

farther, with less fuel.
While passenger traffic (in revenue

passenger kilometers) has increased at
an average of 5% annually, increasingly
efficient aircraft operations have limited
emissions growth to about 3%.
Todays aircraft are 50% quieter than those
40 years ago. Current ICAO Chapter 4
requirements are 35-40 dB quieter than
the requirements 40 years ago.
The aviation industry aircraft manufacturers

and airlines are working on further improvements in aircraft environmental performance,
with guidance from ICAO and the Air Transport Action Group (ATAG), among others.
Bombardier, with other key stakeholders, is
committed to moving toward carbon-neutral
growth within the industry during the forecast
period and achieving by 2050 a 50% reduction in CO2 emissions from 2005 levels.
IATA TECHNOLOGY ROADMAP, 2009

Riblets
Airframe & Systems
The application of new technological developments in new aircraft designs will be paramount in meeting these commitments. IATAs
Technology Roadmap provides a summary and
assessment of technology-based opportunities
for future aircraft, including technologies that
will reduce, neutralize and eventually eliminate
commercial aviations carbon footprint.

Hybrid wing body
Wireless optical
connections for IFE
Truss-braced wing
Spiroid wingtip
Cruise-efficient STOL
Advanced fly-by-wire
Wireless flight control system
Fly by light
MEA architecture
PEM fuel cell
Variable camber with new

control surfaces
Solid-oxide fuel cell
Energy harvesting devices
Solid acid fuel cell
Natural laminar flow
Morphing materials
Hybrid laminar flow control
Advanced 3rd gen. core

New engine core
concepts
Open rotor /
unducted fan
Geared turbofan
Active stability management

Thermal management
Advanced direct drive
Variable cycle
Engine
Adaptive cycles
Boundary-layer ingesting inlets
Counter-rotating fan
Embedded distributed multi-fan

Adaptive / active flow control
Ubiquitous composites
Non-Brayton cycles
Pulse detonation cycles
Regenerative / recuperative cycle
Alternative Fuels
In summary, the world aviation industry is

actively addressing environmental concerns
through the retirement of older aircraft, fleet
modernization, application of technology, and
improvements in operations and infrastructure.
Growing environmental awareness and increased environmental regulation will increase
demand for efficient new aircraft.
Engine replacements
Air Traffic Management
Bombardier is also taking steps to reduce

its own carbon and environmental impacts.
Through our corporate responsibility activities,
Bombardier is committed to minimizing the
footprint of its manufacturing and operating
activities, through increased efficiency, on-site
innovation and the creation of environmental
synergies through engagement with our
supply chain partners.
Morphing airframe
Biomass to fuel or biojet
Liquefied petroleum gas
Synthetic paraffinic kerosene
Liquid methane
Biodiesel
Compressed natural gas
Furans
Ethanol
Liquid hydrogen
Transesterification fuels
Butanol
Data link communication

Retrofit
Required time of arrival

Performance-based navigation
Update
Automatic dependent surveillance broadcast - OUT
New Aircraft
< 2020
System-wide information management
New Aircraft
> 2020
GNSS landing system via ground based augmentation system
All stages
Automatic dependent surveillance broadcast - IN
2010
2020
Source: International Air Transport Association (IATA) Technology Roadmap 2009.
2030
27
The Forecast

28
The Forecast

Assumptions
The following assumptions regarding

commercial aviation also guided development
of the forecast:
The Bombardier Commercial Aircraft Market

Forecast covering the period 2012 2031 is
based on the following principal assumptions
and market drivers:

Demand for air travel will be cyclical and

directly related to economic growth and
wealth creation over the long term
Fleet utilization is directly related to
economic growth
Demand for air travel will be supported by
aviation infrastructure. In some emerging
markets, lagging infrastructure development will constrain growth in air travel and
Increasing environmental regulation will
affect fleet mix and encourage carriers to
seek lower per-passenger fuel burns and
emissions
Oil / fuel prices will affect fleet mix

Airlines will continue to focus on cost
reduction and will prefer the advantages
of larger capacity aircraft in each
segment
Contractual restrictions on airline

operations based on aircraft size and
engine type will ease over time and
Airline markets will continue to be
opened to greater competition through
liberalization of international air

transportation agreements
The forecast was developed based on the

following metrics applied to the 20-year period:
3.26% Average economic growth in global

GDP (down from 3.4% last year)
$126/bbl Average oil price, according to the
EIA (up from $107/bbl last year).
20-YEAR OUTLOOK
Market Drivers that increase/decrease
aircraft demand
Economic Growth
Fuel Prices
Fuel Volatility
Replacement Demand
FLEET GROWTH FORECAST

WORLD
2011 Fleet
Deliveries
Retirements
2031 Fleet
20- to 59-seat
3,600
300
2,700
1,200
60- to 99-seat
2,500
5,600
1,300
6,800
100- to 149-seat
5,100
6,900
3,000
9,000
TOTAL
11,200
12,800
7,000
17,000
29
Emerging Markets
Environmental Regulations
Environmental Fees
Labour Trends
The Forecast

BOMBARDIER MARKET SEGMENT EVOLUTION
Forecast results
The Bombardier Commercial Aircraft Market
Forecast anticipates the delivery of 12,800
new 20- to 149-seat aircraft in the 2012 2031
period. Coupled with retirements of approximately 7,000 aircraft, the world commercial
fleet will grow from approximately 11,200
aircraft at the start of 2012, to approximately
17,000 at the period end. Overall fleet growth
will be 52%, representing a compound annual
growth rate of 2.1%. Almost half of the new
deliveries will be replacement aircraft, while
the balance will be deployed for growth in
new or expanding markets.
The 20- to 59-seat segment of the market is
expected to shrink by approximately 66% over
the period, from approximately 3,600 aircraft
in 2012, to just 1,200 by 2031. The 300 expected deliveries in this segment will be more than
offset by 2,700 expected retirements.
The 60- to 99-seat segment is expected to
grow 270% between between 2012 and 2031.
From a current base of 2,500 aircraft, 5,600
new aircraft deliveries will be countered by
1,300 retirements, resulting in a 2031 fleet of
6,800 aircraft.
The 100- to 149-seat segment is expected to
grow from a current base of approximately
5,100 aircraft, with deliveries of 6,900 new
30
Fleet, Deliveries, Retirement: 2011-2031
20- to 59-seat
60- to 99-seat
100- to 149-seat
6,900
3,000
9,000
5,600
1,300
6,800
5,100
3,600
300
2,700
2,500
1,200
2011
Fleet
Fleet 2011: 11,200
2031
Fleet
2011
Fleet
Deliveries: 12,800
2031
Fleet
Retirements: 7,000
2011
Fleet
2031
Fleet
Deliveries: 17,000
aircraft and retirements of 3,000 aircraft

resulting in a fleet of approximately 9,000
aircraft at the forecast period end, representing
a 2.9% (CAGR). Aircraft in this segment
are typically employed to replacement and
growth roles in about equal proportions.
Overall fleet growth will

be 52%, representing a
compound annual growth
rate of 2.1%.
The Forecast

REGIONAL 20-YEAR DELIVERY OUTLOOK

Units, 2012-2031
North
America
4,730
Europe,
Russia & CIS
2,240
China
2,220
Latin
America
930
Africa and
The Middle East
970
Asia/
Pacific
1,710
31
The Forecast

20-YEAR OUTLOOK
GDP Distribution by Country

(2011 and 2031)
Total GDP ($Trillion)
120,000
100,000
80,000
60,000
50%
50%
39%
40,000
61%
20,000
2011
North America
32
are expected to decline by 2.3%, compared

to Bombardiers 2011 forecast, the reduction
is expected primarily in European and Middle
Eastern markets (down 200 and 80 aircraft,
respectively). Demand in North America,
China, Asia/Pacific and Latin America is
expected to remain on par with last years
forecast. Aircraft demand in China and Asia/
Pacific, considered together, reflect the growing economic strength and influence of these
markets, which are expected to experience
more rapid economic growth than western
markets.
2031
Europe (incl: Russia & CIS)
Asia/Pacific (ex. China)
China
ROW
Sources: Bombardier Commercial Aircraft Market Forecast 2012-2031,

IHS Global Insight, February 2012.
Geographic breakdown
Global demand for air travel and new aircraft
continues to shift towards emerging markets,
although not as rapidly as anticipated in previous forecasts. Over the forecast period to
2031, North America is expected to account
for 37% of new aircraft deliveries, China 17%,
Europe (including Russia & CIS) 18%, Asia/
Pacific 13%, Latin America 7% and Africa &
Middle East 8%.
While total world forecast period aircraft
deliveries in the 20- to 149-seat segments
20- to 59-seat segment

Bombardier foresees a total of 300 20- to
59-seat new aircraft deliveries in this segment
over the 20-year forecast period. This segment
is the only part of the 20- to 149-seat commercial aircraft market expected to experience a net reduction in fleet size, a reflection
of the preference for larger aircraft sizes
throughout the industry in response to high
fuel prices.
Over the last year, new aircraft deliveries in
this segment effectively balanced the few
retirements and maintained the fleet size
at approximately 3,600 units. Bombardier
expects very few deliveries annually over
the next 15 years, with the potential of new
aircraft offerings in this segment driving a
potential resurgence later in the forecast

period.
This years forecast also anticipates an additional 200 aircraft retirements (8%) over the
20-year period, due mainly to the impact of
high fuel prices on the competiveness of small
regional jet aircraft in service with mainline
carriers in developed markets. These 50-passenger class aircraft will continue to deliver
profitable service in emerging markets, such
as Africa, Latin America and Eastern Europe,
where the capacity and range characteristics
can help accelerate the development of the
air travel industry.
The Forecast
This segment is one of the most dynamic in
commercial aviation, as growth will be driven
largely by the evolving relationship between
mainline and regional carriers. The outsourcing
of regional aircraft operations to carriers with
appropriate, low-cost structures, namely regional airlines, continues to be the main thrust
of network optimization efforts. Bombardier
expects that scope clauses in North American
and European operations will continue to
ease, to meet growing demand in this market
segment.
Elsewhere, the attractive economics and
operational flexibility of regional aircraft can
be used to right-size aircraft capacity
according to traffic demand.
Since on short stage lengths turboprop
aircraft are more economical to operate than
jets, modern turboprops are a natural hedging
tool for air carriers against high and volatile
fuel prices. High speed turboprops are now
used by many airlines to replace 50-seat
regional jets on short-haul routes, with little
or no increase in block time or reduction in
passenger comfort.
More than 200 new 60- to 99-seat aircraft
were delivered in 2011, bringing the total
segment fleet up to 2,500 aircraft at the

beginning of the forecast period. In comparison to last years forecast, expected 20-year
deliveries have been reduced by 200 units,
due largely to a slower economic recovery in
mature markets and a preference for larger
capacity aircraft in emerging markets. Aircraft
retirements have also been increased by 100
units in this years forecast, principally 70-seat
and 90-seat regional aircraft delivered in the
early 2000s that are expected to go into
retirement towards the end of the next decade.
Of the approximately 5,900 new aircraft to
be delivered in the 20- to 59-seat and 60- to
99-seat segments in the forecast period to
2031, 48% will be turboprops and virtually all
20-YEAR TURBOPROP FORECAST

20- to 99-seat Aircraft
Segment
2012 CAMF
20- to 59-seat
150
60- to 99-seat
2,700
Total
2,850
33
of these deliveries are expected to be in the

60- to 99-seat segment.
Regional jet deliveries in this 60- to 99-seat
segment are expected to amount to approximately 2,900 units and represent $102 billion
in sales revenues. These aircraft will be used
by the worlds airlines to help optimize network
capacity. In all, this segment is expected to
have a demand for 5,600 new aircraft, worth
over $180 billion in sales revenue. The current
fleet will grow 270%, to reach 6,800 aircraft
by the end of the forecast period.
20- TO 99-SEAT
DELIVERY PROFILE
Turboprops
48%
Regional Jets
52%
The Forecast
The 100- to 149-seat segment is expected

to achieve a 2.9% CAGR as it expands from
approximately 5,100 aircraft in 2012, to
approximately 9,000 units by 2031 the
largest market growth opportunity recognized
by the Bombardier Commercial Aircraft
Market Forecast.
This segment will see deliveries of approximately 6,900 new aircraft against retirements
of 3,000 units, or 59% of todays fleet. Many of
these aircraft are derivatives of larger aircraft
and not originally designed for this segment.
The higher weight and greater drag of these
current products result in higher fuel burns
and greater CO2 emissions. Such aircraft are
daily more challenging to operate in an ultra
34
PROFIT ZONE RIGHT-SIZING AIRCRAFT FOR TRAFFIC DEMAND

High
Large RJ
New design small single-aisle jet
Current large single-aisle jet
Profit contribution per Departure

Current small single-aisle jet
Low
60
200
Passenger Demand per Departure
Newly designed aircraft

that deliver superior
operating economics will
accelerate the retirement
of older aircraft.
Sources: U.S. Department of Transportation, Bombardier Analysis.

RJ = Regional jet, Small single-aisle jet: 100- to 149-seats, Large single-aisle jet: 150+ seats.
cost-conscious and increasingly environmentally-aware business environment. An industry

that requires a fundamental improvement in
operating economics as a matter of survival
is turning its future focus toward aircraft
optimized for their intended segments and
able to deliver significant improvements in
airline profitability.
Newly designed aircraft that deliver superior

operating economics, through advances in
technology, as well as operational flexibility
and attention to passenger comfort, will
accelerate the retirement of older aircraft.
In fact, at the 2011 year end, the OAG Fleet
iNet identified approximately 2,091 single-aisle
aircraft in storage and at least temporarily
inactive.
The Forecast
This segment saw a fleet decrease of approximately 100 units in 2011, while deliveries also
declined, as some orders for new 130-seat
single-aisle aircraft were converted into orders
for larger aircraft. Total deliveries in this
segment across the 20-year forecast period
have been reduced by approximately 100
units, due mainly to the slower economic
growth. The expected rate of aircraft retirements in this segment has remained constant
since last years forecast. While higher oil
prices are accelerating the retirement of older
platforms, the large majority of the aging
aircraft in this segment, such as MD80/90,
BAe 146 and Boeing 737 Classics would have
exited the market by the middle of the next
decade, even with fuel prices at 2011 levels.
The 6,900 new aircraft destined for the
100- to 149-seat segment over the next 20
years will generate sales revenues of more
than $449 billion.

35
conclusion

36
Conclusion
The commercial aviation industry has gone
through significant change since the recent
global recession. The industrys unwavering
focus on optimization and efficiency is the key
reason for its resilience. Economic growth will
drive the demand for more aircraft. Rising oil
prices and continued price volatility will drive
airlines to accelerate the retirement of older,
less efficient aircraft, thereby increasing the
demand for new-technology and fuel-efficient
aircraft.
Bombardier remains optimistic in the 20- to
149-seat aircraft market. The company presents the most optimized capacity aircraft to
connect not only primary and secondary, but
also tertiary airports around the world. The
overall fleet in this market will grow by 51%
from 11,200 units in 2011 to 17,000 units in
2031. New aircraft deliveries will reach 12,800
units, generating over $630 billion in sales
revenue over the next 20 years.
New aircraft deliveries

will reach 12,800 units,
generating over $630 billion
in sales revenue over
the next 20 years.

37
Geographic
details

38
Geographic Detail
Introduction
The top-level message delivered by the
Bombardier Commercial Aircraft Market
Forecast this year is that while airline industry
fundamentals remain sound and attractive
over the longer term envisioned by this
forecast, the immediate term presents some
important challenges that will see early-term
deliveries of new aircraft delayed until
somewhat later in the period.
The first of these challenges is that the world
economy is not recovering from the financial
crisis of 2008 as quickly or as consistently as
we might have concluded a year ago. Europe
continues to deal with sovereign debt crises,
unemployment remains stubbornly high in the
United States and political unrest present
or imminent threatens economic stability in
much of Africa and the Middle East.
Air travel remains a

central building block of
future prosperity and
continuing development.

39
A second central challenge is the extent to

which growth regions can sustain their pace
of expansion. As the worlds economies are
increasingly interconnected and interdependent, significant economic events in one
region such as a sovereign default in Europe
can be expected to have negative global
implications as far away as China.
The third challenge is that fuel prices, which
have spiked significantly since the third quarter of 2011, have shown their potential to put a
brake on economic recovery and growth, and
demonstrate clearly the extent to which western economies still rely on inexpensive energy.
More expensive fuel is also here to stay.
These challenges, and more, have seriously
compromised the ability of the worlds airlines
to operate at a profit a circumstance which
is likely to result in continuing consolidation
and capacity reductions, and which is certain
to heighten carriers focus on cost reduction
as a central strategy of day-to-day operations.
What has not changed, despite these
challenges, is that air travel remains a
central building block of future prosperity
and continuing development. Air travel links
populations quickly and efficiently over
distances that make other transportation
alternatives unsatisfactory. It does so
at reasonable financial cost and with

environmental impacts that are already
small and getting smaller every day.
Modern aircraft that help their operators
serve their customers at significantly lower
cost, with lower fuel burns, lower emissions
and more operational flexibility are clearly
part of the solution and will help todays
most enlightened, most forward-thinking
air carriers not just survive todays challenges,
but actively prepare themselves to prosper
and grow in a changed world. Bombardier
is bringing such aircraft to market.
Geographic Detail

40
North America (excluding Mexico)

According to data from IATA, passenger
air travel grew only modestly in 2011, 1.7%
compared to 9.9% growth in 2010. IATA sees
continuing slow growth of passenger air travel
in 2012, at 0.5%.
Regional airlines operating in partnership
with mainline carriers continue to play an
important role in North American passenger
air travel. According to industry statistics,
regional airlines accounted for 48% of 2010
departures from the top 10 U.S. airports, representing approximately 24% of passengers
enplaned and 21% of domestic airline revenues.
Approximately 74% of U.S. airports with
commercial airline service are served only
by regional carriers.
North America, the worlds largest aircraft
market, will maintain its leadership position
over the course of the 20 years covered by
the Bombardier Commercial Aircraft Market
Forecast. This market is expected to require
more than 4,700 new commercial aircraft,
37% of total world demand in the 20- to
149-seat segments, which is unchanged
from last years forecast.
Economic growth, at just 2.6% CAGR, is
forecast to lag most of the rest of the world,
which will average 3.26%, as GDP generation
leadership continues to shift to economies

such as India and China traditionally viewed
as emerging.
In a further departure from global trends,
less than half of the new aircraft required in
North America (45% or approximately 2,150
units) will be in the 100- to 149-seat segment.
Instead, most of the deliveries (52% or approximately 2,450 units) will be in the 60- to
99-seat segment, the traditional domain of
regional airlines.
The financial arrangements for regional partners are typically based on a fixed fee-forflying or capacity purchase agreement (CPA)
that is not based on the number of passengers carried. Regional airlines operating under
contract to their mainline partners are a vital
part of making the air travel system function
efficiently by enabling the mainline carriers to
right-size the equipment offered throughout
their networks. They also enable access to
some small market airports that cant handle
the mainline carriers larger aircraft.
Geographic Detail

U.S. CARRIERS TOTAL CASH AND CASH EQUIVALENT

35
DEMAND DISTRIBUTION
BY SEAT SEGMENT,
NORTH AMERICA, 2012-2031
Total: 4,730 Units
30
U.S. $ billion
25
3%
20
15
45%
52%
10
5
20- to 59-seat
Source: Bureau of Transportation Statistics, Schedule B-1.
60- to 99-seat
Bombardier believes that the scope clauses,

which have constrained both the size and
number of regional aircraft operating in the
mainline carriers systems, will continue to
ease over the forecast period and that this
will drive demand for larger capacity regional
aircraft in greater numbers.
North Americas large installed fleet base
requires constant replenishment and renewal.
As air carriers here regain financial strength
following a period of declining passenger
loads, financial failures, bankruptcies,
restructurings and consolidations, their

attention will focus on cost control strategies
that include expanding scope clauses to
cover larger aircraft, capacity planning and
optimizing their asset use.
One key will be fleet renewal that delivers significant improvements in operating efficiency
and flexibility. New aircraft that burn less fuel
and deliver other operating efficiencies are
certain to be in high demand in the coming
cycle of fleet renewal.
100- to 149-seat
One key will be fleet

renewal that delivers
significant improvements
in operating efficiency
and flexibility.
41
Geographic Detail

42
Europe (including Russia & CIS)

Airline strategies have focused on cost
reduction as well as consolidation through
acquisition among larger airlines, which
reduces demand for new aircraft. In addition,
Europes population density, comparatively
short travel distances and extensive airport
security measures also mean that both rail
and road provide significant competition
to air travel.
Tightening environmental regulations are
also increasing the pace at which older, less
fuel-efficient aircraft are being retired.
...a significant increase

in expected Russian & CIS
deliveries is offset by a
Europe, including Russia & CIS, remains a
strong market for aircraft in 20- to 149-seat
segment, accounting for approximately 18%
of expected worldwide deliveries from
2012-2031.
Anticipated deliveries for Europe, including

Russia & CIS, are unchanged from Bombardiers
2011 forecast, as a significant increase in
expected Russian & CIS deliveries is offset
by a projected decline in deliveries in the
financially troubled Eurozone.
projected decline in
deliveries in the financially
troubled Eurozone.
Geographic Detail
Overall deliveries in this region reflect the
broader industrys shift to larger aircraft, as
52% of the total deliveries are expected to be
in the 100- to 149-seat segment. Deliveries of
aircraft in the 60- to 99-seat segment dominated by regional carriers are expected to
account for 45% of deliveries, while the 20- to
59-seat segment will make up the remaining
3%.
Russia & CIS are expected to grow more
rapidly than the rest of Europe, at an average
3.4% CAGR for the 20-year forecast period.
It is expected that approximately 300 new aircraft in the 100- to 149- seat segment will be
needed, representing 26% of total European
demand for aircraft in this segment.

The Russian aviation authority announced

the grounding of a number of domesticallybuilt aircraft fleets in 2011. This action has
advanced the retirement of these already
ageing fleets, thereby creating an immediate
opportunity for both new and used aircraft
for the replenishment. As a result, we revised
our forecast to increase the demand of 60to 99-seat aircraft by approximately 180 units
from last year forecast to 320 units. This is
considered a moderate increase, when taking
into account the low utilization of current
fleets, even though the grounded fleet is
much larger.
DEMAND DISTRIBUTION
BY SEAT SEGMENT, EUROPE
(INCL. RUSSIA & CIS), 2012-2031
Total: 2,240 Units
3%
52%
45%
20- to 59-seat
60- to 99-seat
100- to 149-seat
43
Geographic Detail

44
Asia/Pacific (excluding China)

SUB-REGION OF ASIA/PACIFIC
Northeast Asia
South Asia
Southeast Asia
Oceania
Delivery expectations for Asia/Pacific,

excluding China, remain largely unchanged
from Bombardiers Commercial Aircraft
Market Forecast from a year ago. Economic
forecasts predict annual GDP growth of
approximately 3.4%, which is close to the
world average over the forecast period.
This region is expected to account for
approximately 13% of new aircraft deliveries
over the forecast period, representing approximately 1,710 aircraft against retirement of
790 aircraft, resulting in fleet growth of
920 aircraft, to a total of 2,090 in 2031.
In Asia/Pacific, connections between

countries are expected to increase in both
number and extent over time. Larger, longer
range aircraft are increasingly required for
international routes and, as in most other
regions addressed by Bombardiers forecast
and the industry generally, the 100- to 149seat segment is expected to account for
more than half the deliveries (57%) over the
period. Smaller, short-haul aircraft will be
required for growth and fleet replacement
in domestic markets.
In Asia/Pacific,
connections between
countries are expected to
increase in both number
and extent, over time.
Geographic Detail
In India, despite the continuation of strong
economic growth, the airline industry has
been hard hit by the devaluation of the rupee
and overcapacity, with the result that consolidation is now under way. More broadly, fa-

vourable aviation policies continue to

stimulate demand for regional aircraft in order
to meet the growing desire for air travel from
the burgeoning middle-class.
AIRPORT CONGESTION AND EXPANSION PLAN

India
CHINA
PAKISTAN
45
In common with other emerging economies,

notably China, the growth of commercial
aviation in India is expected to be limited by
infrastructure shortcomings. India currently
has four international airports operating at or
above optimum capacity, three of which have
identified expansion plans in place, while the
fourth cannot be expanded, due to physical
encroachments. Fourteen airports have been
identified for construction, conversion or
expansion, while an additional 35 airports
have been identified in Indias 10th Five Year
Plan (2002 2007), although many projects
have been delayed due to financing or
bureaucratic delays.
NEPAL
BHUTAN
1
BANGLADESH
MYANMAR
Existing airports
at or above optimum
capacity
49
1
4
6
8
200km
Sources: CAPA and Bombardier anlaysis.
SRI LANKA
Lambert Azimuthal Equal Area Projection

Based on 2.5 arc-minute resolution data
Indias scheduled
airports for expansion
/construction
Persons per km2

0
1-5
6-25
26-250
251-1,000
1,001+
Most of the 14 airport projects underway are

located in southwestern India and there are
incentives for carriers to add service, which
could see these facilities approach optimum
capacity utilization. More specifically, financial
incentives for operating aircraft with fewer
than 80 seats include waived landing fees and
lower jet fuel taxes, which encourages the
operation of regional aircraft.
Geographic Detail
Despite fall-off in demand from many parts
of the world following the financial crisis of
2008 2009, Indias manufacturing sector
has remained robust. Air travel is expected to
see a significant period of growth as the government addresses substantial infrastructure
deficits over the next five years in particular,
with overall spending set to increase to more
than $1 trillion. India has a large land mass and
a very large and increasingly prosperous and
mobile population that is set to claim an increasing share of the worlds material wealth.
It lacks a high-speed rail network which could
compete with the advantages of air travel.
Forecast growth in Indias GDP appears to
be following the pattern established by China,
although with a five-year lag. Indias population growth and widespread poverty continue
to create pressure within the countrys political system.
Successful development of Indias commercial
aviation potential will be dependent largely
on financing to translate the growing demand
into new aircraft, as well as the ability to support market demands with domestic airport
infrastructure.

Northeast Asia, led by Japan, is recovering

slowly from the ravages of the Fukushima
environmental crisis and tsunami, although
showing signs of individual and corporate
resilience signs which will result in strong
regional domestic demand and continued
economic development.
Growth markets linking major city pairs
continue to develop and will be stimulated
further by the continued loosening of regulatory restraints, except those relating to aircraft environmental performance, which are
expected to remain among the strictest in
the world. Modern turboprop and jet aircraft
which meet these standards will be well
positioned for increased acceptance.
DEMAND DISTRIBUTION
BY SEAT SEGMENT,
ASIA/PACIFIC, 2012-2031
Total: 1,710 Units
2%
41%
57%
20- to 59-seat
60- to 99-seat
100- to 149-seat
46
Geographic Detail

China (PRC)
DEMAND DISTRIBUTION
BY SEAT SEGMENT,
CHINA, 2012-2031
Total: 2,220 Units
1%
36%
63%
20- to 59-seat
60- to 99-seat
100- to 149-seat
Chinas emergence as an economic powerhouse drives demand for new aircraft and this
market is now second only to North America,
with 17% of world demand. We forecast a
demand for approximately 2,220 aircraft over
the 20-year forecast period, including approximately 1,400 aircraft in the 100- to 149-seat
segment, as well as more than 800 in the
60- to 99-seat regional aircraft segments.
Chinas forecast economic growth of 6.6%

CAGR significantly outpaces both the forecast
world rate (3.26%) and the runners-up, AfricaMiddle East (4.1%) and Latin America (4.1%).
China has focused much of its development
on building and supplying export markets for
a very wide variety of goods. As the success
of that strategy generates Chinese domestic
financial returns, and the middle class begins

to prosper and experience material comforts,
some of the countrys emphasis is likely to
shift to development for meeting domestic
needs.
Chinas need for domestic transportation
is central to its economic growth plans and
aviation is expected to play a central role.
47
Geographic Detail
In its current strategic five-year plan. China
seeks to have more than 80% of its population
within 100 km or 1.5 hours of air transportation a feat which would provide air transportation to 96% of its GDP base. While the air
transportation system is developing, Chinas
high-speed rail network can be expected to
pursue and capture excess demand, particularly at and near major airports, and where
the journey is less than 600 km.
Airports and air traffic control system
capacity are major brakes on the growth of
commercial aviation in China. China has 15
international airports operating at or above
optimum capacity, and the central government has implemented plans to build, expand
or convert 40 airports for commercial use,
with a further 50 airports to be built, expanded
or converted by 2020. Most of the 40 airport
projects already underway are located in the
Central, South and East regions, which reflects
the distribution of population within China,
although there are some initiatives to build
aviation infrastructure in the less populated
western provinces.
Current commercial air space limitations,
combined with aircrew shortages, monopolistic fuel pricing and restrictive airline route
expansion and airport usage policies, have
favored the use (and purchase) of larger jets

and resulted in congested

airspace around Chinas largest urban centres.
AIRPORT CONGESTION AND EXPANSION PLAN

China (PRC)
Accordingly, China will need

to build aggressively and
equip a significant number of
new airports some to relieve air traffic congestion in
heavily populated and traveled areas, and still more to
develop and extend economic and social links to more
remote parts of the country.
1
4
2
1
1
11
2
2
2
4
2
7
2
Traditional market barriers to trade in China

can be expected to lessen over time to help
accomplish these challenges. Chinese GDP
growth is expected to slow in the coming
years from consistent double-digit rates to
rates more in line with mature markets and
the government is being counseled to reduce
2 1
3
2
Existing airports at or above

optimum capacity
40
China is therefore expected

to require a significant
number of 60- to 99-seat
regional aircraft to meet this
demand, as well as the pilots
to operate them, technicians
to maintain them and an air
traffic control system with
which to operate them safely.
48
1 1
9
8
6
3
3
5
Chinas scheduled airports for

expansion/construction
its interventions in the marketplace. Instead,

the government is being advised to create
and maintain an environment in which markets determine economic inputs and reward
commercial success. According to reports by
the World Bank and Development Research
Centre, significant policy changes are required
if China is to realize its potential as the worlds
largest economy and a high-income country.
Geographic Detail

49
Latin America (including Mexico and Caribbean)

Bombardier forecast a demand for approximately 930 new aircraft in Latin America over
the forecast period. We expect this region
(which includes Mexico and the Caribbean)
to account for 7% of new aircraft deliveries
over the coming 20-year forecast period,
representing 930 total units. Of these, 65%
or 600 aircraft are expected in the 100- to
149-seat segment and 32% or 300 in the
60- to 99-seat segment.
Latin American economic growth is expected
to be among the highest, at an average 4.1%
for the period, which should result in a
medium-high growth environment for air
travel and deliveries of new aircraft.
This region currently

accounts for
approximately equal
shares of global GDP
and world passenger
traffic (6% in each) yet
is served by 11% of the
worlds airlines.
Geographic Detail
This region currently accounts for approximately equal shares of global GDP and world
passenger traffic (6% in each) yet is served
by 11% of the worlds airlines a circumstance
that results in fierce competition and, in
recent years, business failures and industry
consolidation.
IATA estimates that passenger traffic in Latin
America increased by 9.8% over 2010, which
itself showed 14.5% improvement over a flat
2009. IATAs forecast traffic growth for Latin
America was among the strongest in both
base case and oil price spike scenarios, and
significantly exceeded those for North America and Europe, although starting from a much
smaller base.
The Latin American region is increasingly
home to world-scale events, such as the 2014
FIFA World Cup and the Summer Olympic
Games in 2016, which can be expected to
boost regional economies and to energize the
development of infrastructure to support air
travel growth. In addition, the recent growth
of low-fare air carriers is helping to make air
travel much more accessible to the population, largely through the use of regional jet,
turboprop and single-aisle jet aircraft.

DEMAND DISTRIBUTION
BY SEAT SEGMENT,
LATIN AMERICA, 2012-2031
Total: 930 Units
3%
32%
65%
20- to 59-seat
60- to 99-seat
100- to 149-seat
50
Geographic Detail

Africa and the Middle East

The political uncertainty contrasts the strong
economic growth in Africa and the Middle
East. Bombardiers forecast for new aircraft
deliveries in this region remains relatively
unchanged at 970 units, approximately 1%
lower than last year forecast, over the forecast
period. Within the region, the Middle East is
expected to take 420 new aircraft and Africa
to require 550.
Economic growth is expected to be solid
and slightly above the world average, at 3.8%
CAGR in the Middle East and 4.4% CAGR in
Africa. As in most other regions, new aircraft
deliveries are expected to be dominated by
the 100- to 149-seat class, with 61% or approximately 600 aircraft, while 60- to 99-seat
aircraft will amount to 36% of deliveries, or
approximately 350 aircraft.
Economic growth is
expected to be solid
and slightly above the
world average.
51
Geographic Detail
Both these regions face significant challenges,
including political unrest, slow development of
infrastructure and slow liberalization of traditionally highly regulated aviation markets all
of which have slowed commercial aviation
growth.
In Africa, for example, the development of
aviation infrastructure has focused on a comparatively small number of showcase international hub airports, rather than secondary
or tertiary destinations that would help build
domestic and regional air travel networks
and make air travel accessible to more of the
population. This pattern of surface-focused
development is prevalent across Africas many
countries and in many other essential industries, such as telecommunications, which vary
widely between regions and countries and
often lags in less developed areas.

IATA estimated that air passenger travel in

Africa shrank slightly in 2011, following very
strong growth in 2010, at 15.0%. Its forecast
predicts a modest growth in 2012, at 4.2%.
DEMAND DISTRIBUTION
BY SEAT SEGMENT,
AFRICA AND THE MIDDLE EAST,
2012-2031
Total: 970 Units
Air travel in the Middle East was predicted to

grow at 8% or more in 2011 and 2012, according to IATA, following double-digit growth in
2010. Following a period of social and political turmoil, there is some increased expectation of additional growth potential germinating in the aftermath of regime change and
increasing political stability across the Middle
East.
2%
36%
62%
20- to 59-seat
60- to 99-seat
There are signs of growing, positive change,

however, in the scale of external investment
from countries such as China and India. To
support economic growth, India has extended
$5 billion in credit to Africa over three years
and steadily increased its imports from Africa
to more than $26 billion annually. China has
played a similar role, having invested more
than $5 billion in sub-Saharan Africa annually
since 2006.
100- to 149-seat
52
FORWARD-LOOKING STATEMENTS

53
This presentation includes forward-looking statements,
Certain factors that could cause actual results to differ
which may involve, but are not limited to: statements with
materially from those anticipated in the forward-looking
respect to our objectives, guidance, targets, goals, pri-
statements include risks associated with general economic
orities, markets and strategies, financial position, beliefs,
conditions, risks associated with our business environment
prospects, plans, expectations, anticipations, estimates
(such as risks associated with the financial condition of the
and intentions; general economic and business outlook,
airline industry and major rail operators), operational risks
prospects and trends of an industry; expected growth in
(such as risks related to developing new products and ser-
demand for products and services; product development,
vices; doing business with partners; product performance
including projected design, characteristics, capacity or
warranty and casualty claim losses; regulatory and legal
performance; expected or scheduled entry into service
proceedings; to the environment; dependence on certain
of products and services, orders, deliveries, testing, lead
customers and suppliers; human resources; fixed-price
times, certifications and project execution in general; our
commitments and production and project execution), fi-
competitive position; and the expected impact of the leg-
nancing risks (such as risks related to liquidity and access
islative and regulatory environment and legal proceedings
to capital markets, exposure to credit risk, certain restric-
on our business and operations. Forward-looking state-
tive debt covenants, financing support provided for the
ments generally can be identified by the use of forward-
benefit of certain customers and reliance on government
looking terminology such as may, will, expect, in-
support) and market risks (such as risks related to foreign
tend, anticipate, plan, foresee, believe , continue
currency fluctuations, changing interest rates, decreases
or maintain, the negative of these terms, variations of
in residual value and increases in commodity prices). For
them or similar terminology. By their nature, forward-look-
more details, see the Risks and uncertainties section in
ing statements require us to make assumptions and are
Other. Readers are cautioned that the foregoing list of
subject to important known and unknown risks and uncer-
factors that may affect future growth, results and perfor-
tainties, which may cause our actual results in future peri-
mance is not exhaustive and undue reliance should not be
ods to differ materially from forecasted results. While we
placed on forward-looking statements. The forward-look-
consider our assumptions to be reasonable and appropri-
ing statements set forth herein reflect our expectations as
ate based on information currently available, there is a risk
at the date of the Corporations MD&A and are subject to
that they may not be accurate. For additional information
change after such date. Unless otherwise required by ap-
with respect to the assumptions underlying the forward-
plicable securities laws, we expressly disclaim any inten-
looking statements made in this presentation, refer to the
tion, and assume no obligation to update or revise any
respective Guidance and forward-looking statements sec-
forward-looking statements, whether as a result of new in-
tions in Overview, Bombardier Aerospace and Bombardier
formation, future events or otherwise. The forward-looking
Transportation sections in the Managements Discussion
statements contained in this presentation are expressly
and Analysis (MD&A) in the Corporations annual report
qualified by this cautionary statement.
for the fiscal year ended December 31, 2011.

All monetary amounts are expressed in 2012 U.S. dollars, unless otherwise stated.
resources
Resources used in the development of the Bombardier Aerospace,
Commercial Aircraft Market Forecast, 2012 2031 include:
AACO Arab Air Carriers Organization
AAPA Association of Asia/Pacific Airlines
ACAS AirCraft Analytic System database
AIA Aerospace Industries Association of America
Airline Monitor
ATA Air Transport Association
ATAG Air Transport Action Group
Aviation Daily
Bank of America Merrill Lynch Industry Overview Report
BTS U.S. Bureau of Transportation Statistics
CAAC Civil Aviation Administration of China
DOT U.S. Department of Transportation
EIA U.S. Energy Information Administration
ERAA European Regional Airline Association
IATA International Air Transport Association
ICAO International Civil Aviation Organization
IHS Global Insight
IPCC Report on Aviation and Climate Change
OAG BACK Aviation
RAA Regional Airline Association
www.enviro.aero
Registered trademark(s) or trademark(s) of Bombardier Inc. or its subsidiaries. 2012 Bombardier Inc. All rights reserved.

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Commercial Aircraft

Bombardier commercial Aircraft

Airline Industry Trends

Bombardier Commercial Aircraft

Bombardier commercial Aircraft

Welcome to the Bombardier

DELIVERY FORECAST (UNITS)

20- to 149-seat total

Source: Bombardier Commercial Aircraft Market Forecast 2012-2031.

capacity represented by these orders. After

Bombardier commercial Aircraft

TOTAL FLEET UNITS

in oil price forecast, since EIA issued its

Airlines strive to optimize their fleet

Bombardier commercial Aircraft

The 20- to 149-seat market

The 100- to 149-seat aircraft segment will

The commercial aviation industry is an

Bombardier commercial Aircraft

Bombardier commercial Aircraft

Economic and air travel

WORLD REAL GDP GROWTH %, 2011

World Average 2.7%

Source: IHS Global Insight 2012.

is also reflected in orders for new aircraft. New

Bombardier commercial Aircraft

COMMERICAL AIRCRAFT ORDERS AND GDP GROWTH

The continuing recovery in demand for air

Commercial Aircraft Orders

Sources: Bombardier Analysis, OAG Aviation Solutions, IHS Global Insight

at 6.6% annually, followed by Africa, at

Demand for air travel

Trips per Capita

North America and Europe have historically

Bombardier commercial Aircraft

2011 Per Capita GDP

As a countrys per capita GDP grows, so

Passengers originating from respective country, GDP in 2005 USD.

Population Growth and

The Organization for Economic Co-operation

Bombardier commercial Aircraft

GDP GROWTH RATES

Sources: IHS Global Insight, Feb 2012, Bombardier Analysis.

MIDDLE-CLASS CONSUMER SPENDING IN TRILLIONS USD*

Middle East & North Africa

Source: OECD. * On a purchasing power parity basis.

Bombardier commercial Aircraft

ASIA, AFRICA AND LATIN AMERICA URBANIZATION

1 Urban population according

In contrast, while middle-class consumer

Bombardier commercial Aircraft

CHINA EXPENDITURE ON AIR TRAVEL

Expenditure on air travel (left scale)

Gross Domestic Product (right scale)

Rapid urbanization is also a feature of many

Bombardier commercial Aircraft

Oil price and volatility

Source: Air Transport Association of America, 2012.

AVERAGE OF WEEKLY CUSHING AND BRENT SPOT PRICE FOB 1

YTD 2012 Avg.: $110.94

2011 Avg.: $103.16

Source: Energy Information Administration. Note: 1. FOB = Freight on board

From an average price of $80 a barrel in 2010,

Unit Operating Cost (Cents per Available Seat Mile)