Colombia - Civil Aerospace: High volume will fuel growth (Strategy, Performance and Risk Analysis)
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Colombia’s GDP declined at a CAGR of 6.2% to reach US$286.2 billion in 2016 and will accelerate from 2017 onwards due to a recovery in oil prices, inflation control measures, and reduction in interest rates by Colombia's monetary authorities. GDP is expected to post a CAGR of 5.1% to reach US$383.4 billion by 2021. Growth will be attributed to investments in infrastructure, technology, political stability, a favorable business environment, and strong economic policies. The government passed a public private partnership (PPP) law, according to which, foreign companies can invest in the industry through a build-operate-transfer contract. The initiative will ensure infrastructure development. The increase has been driven by the growth of passenger numbers and cargo. The country’s civil aviation industry is now turning into an attractive prospect for US and other foreign companies.
Increase in leisure and business trips to drive passenger volume
Air passengers in Colombia increased at rate of 4.4%, from 30.9 million in 2015 to 32.3 million in 2016 and will post a CAGR of 6.8%, to rise from 36.2 million in 2017 to 47.1 million passengers in 2021. The trend for leisure and business trips is turning out to be a major driver for expenditure on aircraft.
A decline in procurement of twin-aisle aircraft in the market to cause capital expenditure to slow
Single-aisle aircraft capital expenditure stood at US$1,320.6 million in 2016 but is forecast to post a CAGR of 0.9%, to reach US$1,390.0 million in 2021. Capital expenditure on twin-aisle will decline owing to limited procurement over the forecast period.
Growth in orders for wide- and narrow-body aircraft to drive a growth in deliveries
In Colombia, the volume of aircraft deliveries decreased at rate of -58.8%, from 17 aircraft in 2015 to seven in 2016 due to a decline in the number of single-aisle planes. It is expected to post a CAGR of 3.4%, from 14 units in 2017 to 16 in 2021, driven by growth in the delivery of wide- and narrow-body aircraft.
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