Boeing has forecast coronavirus will leave a manageable imprint on the commercial aviation business, presenting a 10-year market outlook that is 7 per cent lower than before the pandemic but still involves almost 20,000 new planes.
The US aerospace manufacturer has struggled in recent years, from the halt of deliveries of its wide-body 787, to the long shadow of the 737 Max’s two fatal crashes, to gutted demand for air travel last year.
Its annual outlook presented on Tuesday attempts to predict the long-term state of the industry, not Boeing’s individual fortunes.
Deliveries
Boeing pegged worldwide passenger jet deliveries by all manufacturers at 19,330 to the year 2030. The sum is 7 per cent less than projections made in 2019, but less severe than an 11 per cent drop in demand that was forecast late last year.
“We’ve lost about two years of growth” because of Covid-19, said Darren Hulst, Boeing’s vice-president of commercial marketing. “You can’t get around it.”
But despite the pandemic, Hulst said the aviation industry would revert to long-term trends of 4 to 5 per cent annual growth by mid-decade, knocking only “a couple thousand” aircraft from Boeing’s 20-year forecast of 43,610 deliveries.
Boeing’s assumptions included global economic growth that expands at a rate of 2.7 per cent annually, and passenger and cargo traffic that each increase by 4 per cent.
Marc Allen, Boeing’s chief strategy officer, said the Chicago company was “preparing for growth”, with executives forecasting that global travel would recover to pre-pandemic levels by late 2023 or early 2024. The company predicted that domestic travel would fully return next year, regional travel in 2023 and long-haul international travel in the following year.
“Passenger behaviour, snapping back to travel, is an underlying fundamental that gives us a lot of confidence,” Allen said.
The company forecast the aerospace and defence market would have a value of $9 trillion (€ 7.6 trillion) over the next 10 years, with $3.2 trillion from commercial planes, $3.2 trillion from services and $2.6 trillion from defence. Boeing raised its prediction from $8.7 trillion in 2019 and $8.5 trillion in 2020.
Averages
Boeing said jet retirements would surpass historical averages as the pandemic ebbed. The company now expects between 20 and 25 per cent of the world’s fleet to be retired over any given five-year period, up from 15 per cent traditionally.
Low-cost air carriers would continue to lead the way out of the downturn as they had done in past ones, Allen said. The single-aisle jets popular with those carriers would represent a larger share of the market over the next 20 years, rising from 64 to 68 per cent.
Hulst said that Boeing anticipated growing demand for dedicated freighters to move cargo. With global supply chains strained, more goods were being shipped by air in 2021 even though there were fewer passenger flights where cargo could be stowed in the hold.
There were 2,010 freighters worldwide in 2019, and Boeing expects that to grow to 3,435 by 2040. – Copyright The Financial Times Limited 2021
