Aerospace and defense giant Boeing Co. (BA: Quote) lifted Tuesday its 20-year market forecast on improving demand mainly in Asia Pacific, including China. The latest annual forecast reflects the strength of the commercial aviation market with strong demand for new, efficient aircraft, it said. Meanwhile, Boeing has trimmed its 20-year projection for freighters as the cargo market remains sluggish.
The company now projects a $4.5 trillion market for 34,000 new airplanes over the next 20 years as the current world fleet doubles in size. In last year, Boeing were looking for a $4 trillion market for 33,500 new aircraft over the next 20 years.
Boeing said the market for new airplanes would become more geographically balanced in the next two decades. Asia-Pacific, including China, will continue to lead the way in total airplane deliveries. Meanwhile, the company expects declining demand in the North American region.
Airline traffic is currently expected to grow at a 5 percent annual rate over the next two decades, with cargo traffic projected to grow at an annual rate of 5.2 percent.
Randy Tinseth, vice president of Marketing, Boeing Commercial Airplanes, said, "The world's aviation market is broader, deeper and more diverse than we've ever seen it. It has proven to be resilient even during some very challenging years and is driving production rate increases across the board."
Boeing said the single-aisle market, served by Boeing's Next-Generation 737 and the future 737 MAX, will continue its robust growth. Wide-bodies, such as Boeing's 747-8, 777 and 787 Dreamliner, will account for almost $2.5 trillion dollars worth of new airplane deliveries with 40 percent of the demand for these long-range airplanes coming from Asian airlines.
On a geographical basis, Asia Pacific will have demand for around 12,030 new airplanes over the next 20 years, with robust growth in China, India and other emerging markets. In the last year, the company projected a demand of 11,450 new planes for this region over the 20 years.
Low cost carriers, with their ability to stimulate traffic with low fares, are growing faster than the market. The demand to replace older, less fuel-efficient airplanes are also strong with replacement accounting for 41 percent of new deliveries in the forecast.
Boeing said it now expects world freighter fleet to nearly double over the 20 years to 3,200 from 1,740 aircraft today, despite the sluggish cargo market. Last year, the company projected world freighter fleet to increase to 3,500 airplanes from then 1,760 over the 20 years.
Boeing shares closed Monday's regular trading session at $73.18, down $1.12 or 1.51 percent.
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by RTT Staff Writer
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