Robust Growth In Emerging Markets Could Push Orders To $3.6
Trillion Over Two Decades
Boeing is feeling bullish about the market for new commercial
airplanes over the next two decades ... forecasting sales across
all manufacturers to be in the ballpark of $3.6 trillion as world
economies rebound and strong demand for new and replacement
aircraft spurs growth. The Boeing 2010 Current Market Outlook
(CMO), released Thursday in London, foresees a market for 30,900
new commercial passenger and freighter airplanes by 2029.
The report, now in its 46th year of public release, is widely
regarded as the most comprehensive and respected analysis of the
commercial aviation market, and reflects the improving, yet still
unstable conditions facing the industry.
"The world market is doing much better than last year, but there
are still challenges," said Randy Tinseth, vice president of
Marketing, Boeing Commercial Airplanes. "Looking at 2010, we see a
world economy that continues to recover. We expect the world
economy to grow above the long-term trend this year. As a result,
both passenger and cargo travel will grow this year. Airline
revenue and yields are up, but fuel prices remain volatile."
Passenger traffic is expected to grow at 5.3 percent annual rate
over the long-term, driven by economic growth from regions with
diverse airplane needs. The single-aisle airplane segment will
continue to dominate growth worldwide due to the proliferation of
low-cost carriers, emerging markets such as India, China and
Southeast Asia, and continuing instability of fuel prices. The
single-aisle segment has outpaced long-haul markets over the last
decade and will continue to trend upward as older fleets are
The Asia-Pacific region shows the most robust market gains, with
China leading the way.
"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 percent of all traffic will be to, from, or
within the region," said Tinseth.
The airlines of the Asia-Pacific region also will be the largest
buyer of twin-aisle airplanes -- about 40 percent of the total
The Middle East, which has been one of the fastest growing
regions for air travel in recent years, represents another very
strong market. Airlines in the Middle East have been growing
rapidly by taking advantage of geography, demographics, airplane
technology and well-coordinated growth and investment plans.
The North American and European markets will see substantial
demand for replacement airplanes as they retire aging
less-efficient jets. Robust growth in emerging markets with dynamic
populations and growing incomes will lead toward a more balanced
airplane demand worldwide.
Boeing predicts that airlines will grow by responding to their
passengers' preference for more flight choices, lower fares and
direct access to a wider range of destinations. Air carriers will
focus on offering more flights using more efficient airplanes,
rather than on using significantly larger airplanes. As a result,
the market for large airplanes (747 and larger) is small at 720
airplanes. But it remains an important market segment with a value
of $220 billion. It is a market largely for replacement of existing
airplanes, not additional growth, with 45 percent of the demand
from Asian customers and 23 percent from Middle East customers.
When it comes to freighters, Boeing projects the world fleet to
increase from 1,750 to 2,980 airplanes -- an increase of more than
two-thirds. This growth will require 2,490 freighters. Additions to
the fleet will include 740 new-production freighters (worth $180
billion at today's catalog prices) and 1,750 airplanes converted
from passenger models. Large (more than 88.2 tons capacity)
freighters will account for 520 new-build airplanes. Medium (44.1
to 88.2 tons) freighters will total 210 airplanes. Virtually all of
the standard-body freighters (49.6 tons) are expected to come from
conversions of passenger airplanes.
The recession resulted in significantly reduced air cargo
traffic in 2009, the base year for the Boeing forecast. From this
low-traffic base, Boeing forecasts that world air cargo traffic
will increase at an annual average of 5.9 percent through 2029.
Included is the current strong year traffic growth that Boeing
estimates will reach nearly 14 percent over full-year 2009 levels
-- a significant spike in the 20-year growth projection.
"The inclusion of the high-traffic growth levels in 2010,
following the recession, is driving our cargo forecast upward,"
said Tinseth. "However, the strength of the industry and its growth
will continue to be driven by sound fundamentals -- speed and
reliability, consumer product innovation and global industrial