The 2020 Boeing Market Outlook (BMO) includes projected demand for 18,350 commercial aeroplanes in the next decade.
US planemaker Boeing on Wednesday forecast that the commercial aviation and services markets will continue to face significant challenges due to the coronavirus pandemic, resulting in 11 per cent fewer new jets being delivered in the next decade compared to previous forecasts.
The 2020 Boeing Market Outlook (BMO) includes projected demand for 18,350 commercial aeroplanes in the next decade – 11 per cent lower than the comparable 2019 forecast – valued at about $2.9 trillion. This will be about 2,200 fewer large aircraft built by all manufacturers, or 220 less per year on average.
The BMO forecast, which assumes that the pandemic’s impact will hit hardest through the next three years, estimates a total market value of $8.5 trillion over the next decade including demand for aerospace products and services.
The forecast is down from $8.7 trillion a year ago due to the impact of the Covid-19 pandemic. Airlines globally have begun to recover from a greater than 90 per cent decline in passenger traffic and revenue early this year, but a full recovery will take years, according to the outlook.
In the longer term, with key industry drivers expected to remain stable, the commercial fleet is forecasted to return to its growth trend, generating demand for more than 43,000 new planes in the 20-year forecast time period.
“While this year has been unprecedented in terms of its disruption to our industry, we believe that aerospace and defense will overcome these near-term challenges, return to stability and emerge with strength,” said Boeing chief strategy officer Marc Allen.
The latest International Air Transport Association data shows passenger traffic in August down 75 per cent worldwide compared to a year earlier. Domestic traffic was just less than half what it was in 2019, and international traffic was 12 per cent of the level a year ago.
Boeing’ rival European aircraft manufacturer Airbus also points to a gloomy outlook for the aviation industry, saying chances for a recovery have deteriorated again due the rising Covid infections and renewed travel restrictions.
Airbus CEO Michael Schoellhorn was quoted as saying that since the situation in early autumn was worse than the company had expected in the summer, “the planned 15,000 job cuts would be the minimum”. With air travel at a fraction of normal levels due to restrictions and travelers’ fears related to the pandemic, airlines have slowed deliveries of new aircraft.
Boeing’s analysis predicts that two decades from now, the world fleet will be 87 per cent larger, numbering 48,400 aircraft in 2039, up from 25,900 aeroplanes today. During this period, Asia will continue to expand its share of the world’s fleet, accounting for nearly 40 per cent of the fleet compared to about 30 per cent today. Single-aisle aeroplanes such as the 737 MAX will continue to be the largest market segment, with operators projected to need 32,270 new airplanes in the next 20 years.
The bottom line is that this 2039 fleet projection is almost 4,000 jets smaller than expected when compared to last year’s forecast for 2038 extrapolated with the pre-Covid-19 growth rate for one more year.
With recovery slowest for the bigger, long-haul jets, Boeing’s new analysis projects just over 3,000 total wide-body jet deliveries in the next 10 years, versus the 3,600 forecast last year.
Aviation analysts said the stark outlook represents a huge loss of revenue for Airbus and Boeing. The brunt of that shock will be felt in the next few years and especially in the manufacturing of wide-body jets.
The BMO also projects a $2.6 trillion market opportunity for defence and space during the next decade. The defence demand continues to be global in nature with 40 per cent of expenditures expected to originate outside of the United States.
While near-term commercial services demand is lower, the BMO forecasts a $3 trillion market opportunity for commercial and government services through 2029.
“Commercial aviation is facing historic challenges this year, significantly affecting near- and medium-term demand for airplanes and services,” said Darren Hulst, vice-president for commercial marketing at Boeing.
Over the next 20 years, passenger traffic growth is projected to increase by an average of four per cent per year.
In the wide-body market, hit by a slower recovery in long-haul markets, Boeing forecasts demand for 7,480 new passenger aeroplanes by 2039.
Air cargo demand, a relative bright spot in 2020, is expected to grow four per cent annually and generate further demand for 930 new wide-body production freighters and 1,500 converted freighters over the forecast period.
The global aeroplane fleet will continue to generate demand for aviation services. The market for commercial services is valued at $1.6 trillion, and $1.4 trillion for government services.
Boeing’s 2020 Pilot and Technician Outlook forecasts that the civil aviation industry will need nearly 2.4 million new aviation personnel between now and 2039.
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