Boeing foresees global shift to new, more efficient aircraft

10 July 2008

London: Boeing has forecast a $3.2 trillion market for new commercial airplanes over the coming 20 years, one that shall be driven by an increasing demand for airplanes to replace older, less efficient aircraft.

In its 2008 Current Market Outlook report released in London, The Boeing Company 's 2008 outlook calls for a market of 29,400 new commercial airplanes, both passenger and freighter, by 2027, with a balanced demand in aircraft by region. The forecast takes into account the industry's near-term challenges, including a slowing worldwide economy, surging fuel prices, slowing traffic growth in some markets, and concerted action by airlines to balance costs and revenues.

"We're facing a very dynamic situation today in the commercial aviation industry," said Boeing Commercial Airplanes Vice President, Marketing Randy Tinseth, in a statement. "This year's forecast is rooted in today's realities, but also recognises the nature of a long-term outlook."

The influence of current market conditions is well reflected in the 2008 outlook, with replacement airplanes taking a greater share of demand of 43 per cent, as compared to the previously forecast 36 percent due to the loss of economic viability of older aircraft in light of higher fuel costs.

Additionally, Boeing is forecasting a slightly smaller fleet size at the end of the 20-year period (35,800) rather than that predicted in the previous outlook (36,400). The company says that compared with today's world fleet of 19,000 units, this represents an annual increase of 3.2 per cent annually, the same as the estimated economic growth rate.

What is more enlightening is that given the strong orders over the past three years, over 30 per cent of the forecast is already in backlog. "Over the more than 40 years that Boeing has been forecasting the commercial aviation market, we've experienced other challenges with their own dynamics and their own impact on global air travel. What we've learned is that our industry, which is based on the need to transport passengers and freight via our global aviation system, is extremely resilient," Tinseth said.