Poland - Civil Aerospace: Air passengers and freight growth hold promise (Strategy, Performance and Risk Analysis)
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Poland is a member of the North Atlantic Alliance and the European Union (EU) and it is these strong trade ties that supported the growth in Poland’s air freight carriage. Many global players are looking to establish new facilities in Poland that will enhance the country’s manufacturing and maintenance base. Due to growing demand in terms of air passengers and freight, airline operators are focusing on the procurement of new and used aircraft. Moreover, demand for low-cost carriers on regional routes is driving the procurement of narrow-body aircraft by service providers.
Increase in disposable incomes to drive air passenger growth
In Poland, air passengers registered a growth rate of 22.7% in 2016, from 4.4 million in 2015 to 5.5 million. It is forecast to increase at a CAGR of 1.9%, from 5.3 million in 2017 to 5.7 million in 2021. The increase can be attributed to growth in terms of disposable income (average household disposable income increased from US$18651.7 in 2014 to US$19363.9 in 2015) and the frequency of transatlantic and regional flights.
The increased procurement of new aircraft and proliferation of new airlines is expected to drive capital expenditure
In Poland, capital expenditure on aircraft stood at US$163.0 million in 2016 and it is forecast to witness a CAGR of -13.6%, from US$178.0 million in 2017 to US$99.2 million in 2021. This is due to the expected decrease in capital expenditure on single aisle aircraft, which is expected a decline from US$118.0 million in 2017 to US$52.0 million in 2019, due to the rising use of used aircrafts.
New aircraft delivery growth is expected to be low
In Poland, there were no deliveries in 2015 and 2016 owing to the lease of used aircraft by Polish airlines. However, the number of deliveries is forecast to increase at a CAGR of 10.7%, from four deliveries in 2017 to six deliveries in 2021, owing to the procurement of new aircraft. For instance, in January 2017, LOT Polish Airlines entered into an agreement with Aviation Capital Group to take delivery of the first out of three new Boeing 787-9’s.
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