No End to Jetliner Boom, Says Boeing
Aeropace Group Raises its 20-Year Market Forecast to $5.2 Trillion from $4.8 Trillion Seen a Year Ago
The U.S. aerospace has raised its forecast for growth in the market for new jetliners to nearly 37,000 planes worth $5.2 trillion over the next 20 years compared with its previous 20-year forecast of around 35,000 jets worth $4.8 trillion.
Boeing said on Thursday that the main driver of growth is airline demand for smaller passenger jets as operators scramble to order smaller, more fuel-efficient aircraft to cater for rising volumes of budget travelers notably in Asia.
Boeing's 20-year estimate of a $2.56 trillion market for 25,680 single-aisle aircraft like its own 737 jetliner and Airbus Group's A320 is up 4.1% from its 2013 forecast.
The plane maker expects three billion people to travel by air in 2014, and that number to double to more than seven billion people in 2033, largely in the Asia Pacific region.
Jetliner demand is "strong and resilient" despite industry concerns about over-ordering, said Boeing's vice president of marketing, Randy Tinseth.
Around 40% of that demand will go to fast-growing low-cost carriers across the globe, said Mr. Tinseth.
Boeing also anticipates air travel inside of China will overtake the U.S. as the single busiest market sometime between 2023 and 2033 in the second half of its forecast. About 40% of the 13,460 aircraft needed in Asia will go to China, estimates Boeing.
The company's enthusiasm will get its first test next week when the aerospace industry gathers at the Farnborough Air Show, to be held near London. Deloitte's consulting arm expects 500 jetliners will be ordered at the show, which kicks off on July 14.
The jetliner market can be difficult to forecast and Boeing acknowledges its earlier long-term expectations have underestimated demand.
Airlines looking to grow their fleets will account for 21,270, or 58%, of deliveries, with the balance going for the replacement of existing aircraft. Airbus is equally bullish about demand. It last issued its own forecast in September.
Boeing and Airbus, which are building jets at record rates, as well as manufacturers in Brazil, Canada, Russia, China and Japan are vying for about 16,000 orders for single-aisle aircraft that will need to be placed to match Boeing's 20-year expectation.
Still, growth in the market for new planes will be uneven, Boeing said.
For the third year running, Boeing has reduced its 20-year expectation for the market for the biggest jets in the world. The Airbus A380 superjumbo and 747-8 have been slow sellers in recent years and U.S. plane maker now expects passenger and cargo airlines will only need 620 of the largest jets, down from 760 forecast in 2013.
A sluggish cargo market has depressed orders in recent years for dedicated freighter aircraft built by Boeing and Airbus. The market recently has shown signs of recovery, but Boeing now forecasts 4.7% average annual growth in cargo traffic, down from its 5% expectation last year.