Belgium - Civil Aerospace: Increasing number of passengers drive demand (Strategy, Performance and Risk Analysis)
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Belgium has one of the best infrastructure networks in Europe. The country is recognized as the natural gateway to Europe as it is located in the middle of several major European countries, such as the UK, France, Germany, Italy, Spain and the Netherlands. Air connectivity is also good; Belgium’s cargo airport is among the top cargo airports in Europe and has one of the fastest air cargo handling and distribution centers in the EU. Most of the European highways, such as the E40 and E42, cross Belgium, connecting France and Germany. Therefore, the country is accessible via roads from all sides. However, the strong road network impacts air services.
Improved frequency of flights and proliferation of LCCs are expected to drive growth in terms of the number of air passengers
In Belgium, air passengers grew at 9.3%, from 11.5 million in 2015 to 12.5 million in 2016, and are forecast to increase at a CAGR of 5.4%, from 13.0 million in 2017 to 16.0 million in 2021. The growth is due to the “Hi Belgium Pass” initiative and the reduction in fares on popular domestic and international routes run by LCCs.
Increased medium helicopter procurement to drive helicopter capital expenditure growth
In Belgium, capital expenditure on helicopters stood at US$40 million in 2016 and is forecast to increase at a CAGR of 2.9%, from US$50 million in 2017 to US$56 million in 2021. The growth is primarily driven by the procurement of medium sized helicopters for executive use and to access remote locations. Also, the life of a helicopter is approximately 30 years, which is five years more than a commercial aircraft, and the value of a medium sized helicopter depreciates at a much slower rate.
Emergence of technologically advanced aircraft to drive growth
In Belgium, aircraft deliveries increased from a single delivery in 2015 to two deliveries in 2016. Similarly, it is forecast to increase at a CAGR of 13.6%, from three deliveries in 2017 to five deliveries in 2021. The increase is due to the increased demand for technologically advanced and fuel efficient aircraft.