And Projects Trillions In Revenue Over Next 20 Years

It could well be the mother of all airplane orders at this year's air show in Farnborough -- a $2.96 billion sale of Boeing 777-300ERs to Emirates Airlines. And if Boeing Commercial CEO Alan Mulally is right, this is just the tip of the iceberg.

Mulally said Emirates will take delivery of four long-range 777s by 2006. The airline has options that stretch into the year 2012.

Speaking to reporters at the Farnborough Air Show in Britain, Mulally said he thinks Boeing will experience 5.2 percent growth in commercial passenger traffic this year, on top of a 6.2 percent growth rate in the cargo business.

Mulally reignited the basic philosophical difference between Boeing and chief rival Airbus, saying his company still believes airlines will be more interested in flying smaller aircraft from point-to-point instead of flying huge aircraft in and out of congested hubs, as is Airbus's plan with the behemoth A380.

At least initially, Mulally may be right.

Consider the "slottery" cap at LaGuardia and the ongoing restrictions in and out of O'Hare. As more people fly, airports don't seem to be keeping up with traffic demands.

So, Mulally and his company are betting on the 7E7, a mid-sized jetliner that touts big fuel-cost savings for its operators. Mulally told reporters at Farnborough Boeing now has 200 deposits for 7E7s and hopes to convert many of those downpayments into firm orders by the end of the year.

"These are negotiations we are doing now that will lead to definitive contracts," he said.

Huge Growth Over The Next Two Decades

Boeing sees a $5.4 trillion market for new commercial airplanes and aviation services during the next 20 years, which will bring about a doubling of the world's airplane fleet by 2023 and accommodate a forecasted 5.2 percent annual increase in world air travel.

"The long-term market outlook remains positive," said Boeing Commercial Airplanes Vice President of Marketing Randy Baseler. "Even severe downturns such as we've experienced during the past few years do not change the fundamentals of economic growth and the need for people to travel."

Boeing projects that operators will invest $2.0 trillion for approximately 25,000 new commercial airplanes during the next 20 years. Of that:

• 17 percent (4,290 airplanes) will be regional jets
• 59 percent (14,770 airplanes) will be single-aisle airplanes
• 21 percent (5,150 airplanes) will be for intermediate, twin-aisle airplanes
• 3 percent (790 airplanes) will be for 747 and larger airplanes.

Those will help increase the world fleet to almost 35,000 airplanes.

Growth At Airbus, Too

Airbus is also growing. CEO Noel Forgeard predicts a ten-percent rise in commercial passenger traffic through the end of this year. So far, he says Airbus has received 104 firm orders for aircraft this year. He says his company now supplies more than half of all new commercial aircraft in the world.

"I can now confirm that we plan to deliver more aircraft than last year, and even more than the 305 aircraft that were the plan," he said. Forgeard was quoted in the Wichita Eagle.

FMI: www.boeing.com, www.airbus.com