Boeing remains bullish on long-term aircraft demand

Boeing forecast demand for 30,900 new commercial aircraft valued at $3.6 trillion over the next two decades in its latest "Current Market Outlook" released yesterday, projecting the global fleet will expand 92.2% from 18,890 currently to 36,300 in 2029.

The forecast demand for new aircraft is 6.5% higher than the 29,000 predicted last year. The manufacturer remained bullish in its long-term projections for traffic, predicting annual growth rates of 5.3% for passengers and 5.9% for cargo over the forecast period. It projects 5%-6% full-year 2010 growth for passenger traffic and 14% for cargo. "This year is a challenging year, but clearly better than 2009," VP-Marketing Randy Tinseth said.

Boeing said global airline financial performance "is forecast to improve to the breakeven point in 2010" with Asia/Pacific carriers leading the way. Tinseth noted that the recovery underway is "different" from past rebounds from downturns because "it is really being led by the emerging markets."

It is those emerging markets that give the manufacturer hope for robust long-term demand for aircraft. In 1990, 72% of all commercial air traffic was carried by European or North American airlines. That figure is down to 58% currently and will dip to 45% by 2029, Boeing said.

"The Asia/Pacific region shows the most robust market gains, with China leading the way," the company stated. "Today, about one-third of all airline traffic touches the Asia/Pacific region, and as a result of the growth in this market, by 2029 almost 43% of all traffic will be to, from, or within the region…Half of the world's new traffic added during the next 20 years will be to, from, or within the Asia/Pacific region."

It said Asia/Pacific airlines will need 10,320 new aircraft valued at more than $1.3 trillion over the next 20 years. "The number of airplanes in the Asia/Pacific fleet will nearly triple, from 4,110 airplanes in 2009 to 12,200 airplanes in 2029," the manufacturer predicted. But the forecast does project that the largest demand for new aircraft by market value will continue to be the US, followed by China and the United Arab Emirates.

Boeing said single-aisle aircraft will account for 69% of deliveries globally through 2029. "Rapidly expanding air service within China and other emerging economies and the spread of LCC business models throughout the world drive this market segment," it said.

Twin-aisle aircraft represent "the fastest-growing segment of the market, accounting for 23% of the delivery units and 45% of the delivery dollars" over two decades, it said. "High fuel costs are compelling airlines to accelerate replacement of older airplanes."

Boeing projects that the world freighter fleet will increase from 1,750 aircraft currently to 2,980 in 2029. It predicts 2,490 freighters will be delivered during the period comprising 740 new-production models worth $180 billion and 1,750 converted from passenger models. Freighters with capacity to carry at least 80 tonnes will account for 520 new-build cargo aircraft, it said. Freighters with capacity for 45-80 tonnes will total 210. "Virtually all" freighters with less than 45 tonnes capacity will come from conversions, it said.