Boeing has predicted that growth in the aviation industry for plane deliveries will slow over the next two decades. This will come as demand for jumbo jets and freighters softens. They expect the worldwide aircraft fleet to expand at less than one-fifth of the rate it estimated last year. Airlines are now expected to take delivery of 34,000 new planes through 2031 – a value of $4.5 trillion. This is a 1.5% rise from the 33,500 new jets the manufacturer predicted last year. At the time, it increased its 20-year forecast by 8.4%.
Boeing gives a 20-year forecast every year, offering a peek at how it sees the market for new planes and passenger and cargo traffic for airlines. Although the sale of twin-aisle aircraft will rise, orders will slow for bigger planes – like the B747 and Airbus SAS A380 superjumbo. Boeing vice president of marketing Randy Tinseth says that the estimate reflects the hard economic climate seen today in some mature markets. The economic growth rate for the prediction is down, he added.
This comes as fuel bills for four-engine aircraft like the B747 and A380 have been pushing the aviation industry toward longer range twin-engine jets that burn less fuel. Orders for its B777 reached a record 202 last year, while the new B747-8 only sold seven. The forecast shows that the company predicts fewer sales of narrow-body planes over the next two decades due to new models of aircraft being launched by manufacturers in China, Russia and Canada. This category makes up most of the global fleet and includes the B737.
Tinseth says one or two new rivals will gain traction in the narrow-body category near the end of the second decade. Their B737 MAX model, which has been revamped with new engines, will be able to keep market share parity against the A320neo. This follows Airbus chief operating officer John Leahy saying that he’s aiming to win 60% of this market within the next few years.
The strongest demand is in Asia, where Boeing forecasts buyers will be delivered 12,030 new aircraft over the next 20 years, which is a 5.1% rise from last year’s prediction. Now the company sees fewer orders from North America, Latin America and the Middle East – with a 3.2% drop in North America to 7,290 aircraft. Over the next two decades, Boeing also believes that passenger traffic will jump 5% per year.
The manufacturer and rival Airbus are pushing output to record levels in order to catch up on backlogs of over 8,000 planes. This represents over seven years of work at the rate they are currently moving. Tinseth says they expect challenges in the European market and general economy for the year and 2013. Once the economy is back on its fee, they anticipate continued growth.
Tinseth added that, while the forecast from Boeing only gives a 1.5% gain to aircraft numbers compared to last year’s estimate, the value of the aircraft will increase by nearly 13% as carriers choose larger jets. The average plane will get about 5% larger over the period, which will shift the middle market to jets the size of the B737-900ER and A321 – rather than the current A737-800 and A320, he added.
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