Boeing slashes industry 20-year outlook for planes

Boeing signage is seen on a commercial pavilion at the Farnborough International Airshow in Farnborough, Britain July 17, 2018. REUTERS/Toby Melville/File Photo

Join now for FREE unlimited access to Reuters.com

LONDON, July 17 (Reuters) – U.S. planemaker Boeing Co has cut its forecast for industry-wide plane demand over the next 20 years, but said it expects deliveries are stable outside the Russian market.

Boeing projects that airlines worldwide will need 41,170 new planes over 20 years, with half of deliveries for replacement planes, and single-aisle planes accounting for about 75% of planes.

Boeing’s new market outlook, released on Sunday ahead of the Farnborough Airshow, is down from its previous 20-year forecast of 43,610 deliveries.

Join now for FREE unlimited access to Reuters.com

The new estimate excludes the Russian market and its projection of 1,540 planes, due to the war in Ukraine and uncertainty over when manufacturers might again sell planes to Russian carriers.

Boeing has slightly increased its demand forecast over the next 10 years to 19,575 aircraft deliveries – a higher projection even excluding the Russian market.

“It’s a function of a depressed environment in 2021 collapsing and a new trend year in 2031 adding to it,” Darren Hulst, Boeing’s vice president of commercial marketing, told reporters. a briefing ahead of Sunday’s release. “It comes very close to our outlook for 2019” if Russia were included.

Boeing also cut its forecast industry-wide passenger traffic growth rate slightly to 3.8% from 4%, but raised its cargo growth forecast to 4.1% from 4% for the year. last. It cut its fleet growth forecast to 2.8% from 3.1%. Its 20-year widebody delivery forecast fell from 7,670 to 7,230.

Boeing still expects the global airline fleet by 2041 to nearly double as it still forecasts a recovery in global COVID-19 aviation demand by early 2024.

Over the next 20 years, Boeing said “the long-term fundamentals will remain intact.”

“Our view of the medium-term recovery – when the industry returns to 2019 global air traffic levels – is largely unchanged” since 2020, Hulst said. “Overall, we still see late 2023, early 2024 as the time when the industry fully recovers or at least pre-pandemic traffic levels.”

Boeing expects strong demand for planes in the near term despite recession risks.

“Global industry is still on a recovery trajectory towards the normal relationship between GDP and traffic,” Hulst said. “Any small problem from an economic perspective would likely be overwhelmed by the demand that exists because of these normal economic relationships.”

Boeing also expects the freighter fleet to grow 80% by 2041. Air cargo is operating at “historical levels,” Hulst said, saying it’s partly “a function of the growing strategic value of air cargo. versus supply chains that are disputed and shipping that is disputed.”

Boeing sees e-commerce networks contributing to “a strategic shift towards air cargo, even in the medium to long term. … It’s not just a problem in terms of shipping versus air travel.”

Hulst said the number of routes with more than one operating airline has more than doubled over the past two decades, accounting for 70% of all capacity. It demonstrates “the continuous innovation that airlines need to continue to be competitive at a lower cost to attract more and more traffic”.

Air freight still represents only 1% of world trade. “A small change in terms of the mode of transportation, key elements of trade, has a big impact in terms of air cargo demand,” Hulst said.

Join now for FREE unlimited access to Reuters.com

Reporting by David Shepardson; Editing by Leslie Adler

Our standards: The Thomson Reuters Trust Principles.

Leave a Comment