09/04/09 Gaithersburg, Maryland
There are some interesting new patterns of air trade emerging.
Dubai, for instance, is at work on what will be the world’s largest airport. Emirates Airline, its chief airline, will grow its passenger fleet 14% and its cargo capacity by 17% this year, despite the global slowdown. Emirates plans new routes and is increasing the number of flights on old ones. Over the last five years, the airline has grown 20% annually.
Booming trade with Asia has created demand for increased flights. Whereas in 2000, there were only seven flights connecting the United Arab Emirates to China, today there are over 60 such flights.
Its fastest growing market is Africa, which has grown 17% in the last 12 months as Arab investors and businessmen flock to the continent. Emirates recently added a second daily flight to Lagos, Nigeria. It’s opening new services from Dubai to Durban in South Africa, including 14 tonnes of cargo capacity.
And look at China. China plans to build some 97 new airports by 2020, and will expand older airports. This will cost more than $64 billion. The country has only 147 airports today. So that’s a 66% increase.
We are living amid massive changes in air transportation. The order book of the industry also reflects this. The world’s airline fleet will double over the next 20 years. There are over 24,000 new aircraft deliveries on tap — an order book worth nearly $3 trillion. Passenger and freight demand will nearly triple.
There are some great investment opportunities that spin out of this — and not in the airlines themselves, or even necessarily in the aircraft manufacturers. And while running an airport is a great business, there are few options for investors. I think the greatest opportunity for investors lies in the specialty materials used to make the new planes.
Chris Mayer
Chris Mayer is managing editor of the Capital and Crisis and Mayer’s Special Situations newsletters. Graduating magna cum laude with a degree in finance and an MBA from the University of Maryland, he began his business career as a corporate banker. Mayer left the banking industry after ten years and signed on with Agora Financial. His book, Invest Like a Dealmaker, Secrets of a Former Banking Insider, documents his ability to analyze macro issues and micro investment opportunities to produce an exceptional long-term track record of winning ideas. In April 2012 Chris will release his newest book World Right Side Up: Investing Across Six Continents.
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This is all pie in the sky. with all the trillions that will come out of the real economy, not that many people will be able to fly, or even need to, that is what is changing, communications. And when all the parasitic baby boomers have left the planet and a more equal civilisation comes into being, we will not need to go to anywhere, it is all the same everywhere, either westernised or wishing to be.