Back to the future - Part II

LONDON - It’s hard to believe, but the movie of the above title is celebrating its 20th anniversary this year. So I think it’s kind of appropriate to have a little fun with it as we get set to take our own annual adventure 20-years into the future which we call the Boeing Current Market Outlook.


We don’t really have an almanac from the future detailing the aviation market from 2009 to 2028, or a DeLorean time machine, but we do have resources and tools to helps us forecast commercial aviation in the next 20 years.

In the movie, Marty McFly and “Doc” Brown travel to the far-off year of 2015. While there, an almanac of “future” statistics ends up changing their history.

They have to go back to the past as well as “back” to the future to set things right.

Now, when I first went back to the future just two years ago, it was seemingly a different future we were predicting.

Or to put it another way, the “future” (or at least our view of it) seems to have changed since then. Or has it? Let’s discuss this a bit.

It’s true we’re facing an extremely dynamic situation today compared to a couple of years ago – a global economic recession, declining passenger and cargo traffic, and unpredictable fuel prices. Some would argue these conditions call for a dramatic change in our forecast. Well, this year’s outlook definitely takes these current realities into account.

But there’s always going to be a need to transport passengers and freight via our global aviation system, and time has proven the industry is extremely resilient. As I’ve said here before, this is a long-term forecast – one that points to a 20-year period in which the basic factors underlying the need for new airplanes are strong.

And by the way, we’ve had a pretty good record of our forecast turning out to be in line with the realities of the market. Take a look at the chart below:


Our 2000 forecast accurately projected demand distribution by airplane type and quantity of aircraft ordered. Historically, Boeing has been conservative in our estimate, depending on aircraft type. We under-forecasted the number of single-aisles needed. But we over-estimated demand for large airplanes (747, A380). The table reflects passenger jet deliveries from 2000 through May 14, 2009, plus backlog - excluding regional jets.

Something else comes to mind when I look at this chart. It would seem that the competition has a very challenging task ahead to meet its forecast. In the first 10 years of their projection, Airbus will have delivered a total of 27 A380s. Their forecast in 2000 was more than 1,200 A380s. My math might be wrong, but that means that in the next 10 years they will have to deliver about 120 A380s a year to meet their goal.

That’s all very heavy stuff, you might say. Why are things so heavy in the future?

Anyway, did you know that we’ve been publicly issuing our Boeing Current Market Outlook for 45 years? Talk about “back to the future!” The Boeing CMO is the longest-running complete worldwide jet forecast. And during all that time our forecast has always reflected both upturns and downturns.


I did a little time traveling of my own this year, back to the 1950s - just like Marty McFly. Actually what I did was dust off a copy of a Boeing outlook from the past, which referenced forecasts we did from the 1950s on.


Our forecasts from 40+ years ago were used in much the same way as now – to help Boeing develop its strategy and long-range business plan. One key difference: Back then, we divided the world into only three markets: “US Domestic,” “U.S. International,” and “Foreign (rest of the free world).”

We’ve weathered a lot of significant market challenges. But after each downturn, we’ve seen airline growth rates rise above average, with peak traffic levels above those suggested by the long-term trend. That’s why our 2009 forecast sees a future airline fleet large enough to accommodate these peaks in demand, and flexible enough for airlines to adjust or relocate capacity to meet changing demand conditions.

So let’s get to the outlook as I presented it before a group of journalists for the first time earlier today in London.

First, we see long-term passenger growth worldwide remaining strong - at 4.9% annually - driven by global economic growth, world trade, tourism, new airplane capabilities and liberalization.

Second, air cargo will also be strong - with 5.4% annual growth – reflecting the continuing need for speed, delivery reliability, product innovation and global interdependence.

Here’s some big picture data for the Current Market Outlook 2009 - 2028:

  • 29,000 new aircraft (a slight decline from last year’s forecast) valued at $3.2 trillion
  • Regional jet market “shrinking” due to “up-gauging” into the 90+ seat segment
  • Single-aisles will have the largest market share by number of units – driven by large domestic markets in Europe and North America, and growing domestic Asian markets
  • Twin-aisles will have the largest market share by investment dollars – with nearly 40% of the demand coming from Asia
  • The large airplane segment will be small, with a high proportion of freighters
  • Strong growth in China, India and emerging markets will lead toward a more balanced airplane demand worldwide – what we call demand diversity

There’s a lot more to the CMO report, and this year for the first time you can delve into the data right now online. That makes it a truly Current Market Outlook in an entirely Web-based format – with all of the forecast data available through a new set of interactive tools. Data tables are available in Excel, and you download the entire site, including all the tables, in PDF format.


All of the the forecast detail is available now in our enhanced Current Market Outlook Web site. Click on the image to go directly to the site.

I want to leave you with a couple of thoughts as we head into the Paris Air Show and all of the questions around the market we’re bound to hear. What does this year’s forecast have in common with all the Boeing forecasts through the years? Resilience. Over decades of tracking, despite several economic downturns, the industry grew by an average of around 5% per year.

Clearly, during the next 20 years there will be periods of recovery mixed with setbacks. But we see a similar growth trend going forward. As George McFly would put it, it’s our density!

And here’s a little perspective for the next time you think about our 20-year forecast and how far into the future that seems. For those of you who remember the film, think back to 1989 and when you first watched Back to the Future, Part II. It doesn’t seem all that long ago, does it?


Boeing’s CMO through the years.

Finally, I just want to mention the use of the word “current.” It’s in the title of our forecast each year because, in a sense, we tear up the old forecast and start fresh with new analysis.

It’s how we make sure that our new forecast takes current market conditions into account. We’ve got a great team working on this every year, and every year they start – virtually - from scratch.

In 2009 our CMO team started from the basis of our current economic downturn. From there they looked ahead at how airline strategies are being adjusted to account for these conditions. Ultimately it takes months of analyzing data from a multitude of sources, even as the data itself is dynamic and changing by day. It takes a lot of hard work and long hours.

So kudos once again to our team of tireless and dedicated market analysts who devote their time and energy to this project – because they care very much about getting it right each year.

Or as I like to put it, that’s the power of love.

Comments (11)

P.Sumantri (France):

You said, "First, we see long-term passenger growth worldwide remaining strong - at 4.9% annually - driven by global economic growth, world trade, tourism, new airplane capabilities and liberalization."

I'm not an expert but I have the strong feeling that the average growth during the next decade won't be as high as you expect. Using my guesstimates, the "most probable" figure for RPK average growth for next decade is about 3.6% per annum.

My guesstimates are based on the simple assumption that we are slowly going out from the influence of the Second World War. Indeed, today we are still living in the wake of the WWII. Just after the WWII there was the reconstruction and then those babyboomers became consumers and created demand that generated growth. This population continued to fuel the economy until recently. The first babyboomers are now retiring or are leaving this world so we are about to enter a new socio-economic dynamics.

The babyboomers have been the "locomotive" of our growth since the 50s. It's now over. So, frankly I don't see any rapid recovery from the current downturn because the current crisis is only the sign of the "End of Transient". I think we are now in an instable period before entering a new era of low growth. Clever people would call it a "Paradigm Shift".

The trouble with the possible instability is that developing countries could become chaotic. I wouldn't be surprised if we witness social and political unrests in those regions during the next three years. And believe me, social or political troubles are not very good for air travel.

I invite you to play with the data in this link.
Please study the population distribution in the developed countries (try Russia).

My blog: http: //

Chris C (South Africa):

“The large airplane segment will be small, with a high proportion of freighters.” Clearly, it is therefore imperative to offer the most efficient, capable, economical and market preferred large (80,000kg and larger) freighter airplanes, and these airplanes are without question the new Boeing 777F and phenomenal 747-8F.

Despite the substantial decrease in the large airplane segment demand forecast from 990 airplanes to 740 airplanes, the 747-8 family is still an optimised, market preferred and risk retiring option for that market. Only the -8 offers the “family” concept in this market with both the -8I and -8F; this allows for increased flexibility and increased commonality. The -8I will eventually become a greater player in this slow developing market as it's a highly-efficient, optimised, highly-capable airplane that offers the right balance of growth, flexability, size and risk profiles, period.

Whilst the new Boeing CMO details a decrease in large, new-production built freighters from 641 airplanes to 490 airplanes over the next 20 years, the conversion market, such as the 747-400BCF, has also decreased from 461 airplanes to 340 airplanes. But, when it’s all said and done, the large freighter airplane market will still command a 76% market value, and the 747-8F and 777F are firmly positioned to offer leading edge solutions to this market and continue to be the cornerstone of the world air-freight market recovery; the 777F and 747-8F are the pinnacle of airborne freight excellence, period.

Norman (Long Beach, California, United States):

I don't think there will be any hovering skateboards in 2015 and if so it's a one-off and that ain't his.

I expect a slow but certain recovery for the US economy and some economies around the world will recover faster than others, China and India I would expect to lead in economic recovery but I expect airline mergers and consolodations to happen but I don't see any real reductions in orders in the future in those markets.

With American Airlines, Ryan Air and Southwest Airlines carrying large orders for the 737 as well as others, I expect the 737 to do well in for the next decade. The 747 will sell well as a predominant cargo plane. The 787 will be the newest plane in the market for Boeing and will be selling very well in the next seventeen years and the 777 will do well in the next decade.

I think the era of the regional jet that carries under 70 people is over as the costs of fuel goes up, at the time regional jets where popular fuel was cheap and now RJs are being parked.

Though large aircraft like the 747-8 I and the A380 will not be a vary common place aircraft in the future as deregulation and competition become stronger I suspect that their will be a need for planes larger than the 777 and within the sizes between the 747-400 and the 747-8, I think that's where the next twin-aisle aircraft developement will fulfill.

I hope the forecast of over 17,000 aircraft comes to fruition when the goal year comes. I think the strength of the current markets will increase and new markets will develop in time.

Paulo M (Johannesburg, RSA):

What a thoroughly entertaining all-rounder blog entry - congratulations.

Just touching on "Current", it's interesting that your team starts a clean sheet CMO every year - with fundamentals such as GDP growth in mind. Interesting because industry journals have highlighted the fact that the Boeing forecast follows every turn and the Airbus forecast remains stable - with regard demand for the big stuff. Interestingly, the market tracks the forecasts at Boeing, as Boeing's CMO tracks the global reality.

Speaking of which, the material on is worth a view - especially in relation to the previous few posts on the 787 and the 747-8. Fantastic airplanes worthy of appearance in the CMO. Nice work!

TC (MV, WA):

The large and long range segment seems well covered in the next twenty years by the 380, 747, 350, and 787. Maybe the 777 will be lightened to stay competitive.

The single aisle market is ready for a gull winged plane with big fans but close to the ground for easy bag loading.

How about a 16' wide CFRP fuselage for the mid-size.

Does the market produce the plane, or does the plane make the market?

Peter F (Seattle, WA, USA):

Great blog entry and another great 20 year forecast. I especially like the transparency in the downloadable Excel spreadsheet. While all of us can quibble with the growth assumptions - especially given current uncertainty and forward looking regulatory and environmental variables - the format used allows for consistent comparisons. Randy, you and your team deserve a pat on the back and all the kudos I'm sure you'll hear in Paris.

One thing, though, particularly given the "clean sheet" approach - has you or your team compiled a methodology report on changes over the 45 year history of the forecast? I'd be curious to understand at a high level how accurate the Boeing team has been in its forecasting, and understand where you believe you "got it wrong" (as any forecast will be wrong).

There are very few historically intact, yearly forecast series such as this study - for example, I know of no other equivalent series in economics, where consistent forecast series tend to at most last for the typical 20- or 25-year active lifespan of an academic researcher. As someone who is keenly interested in forecasting error sources in other simulation contexts, I'd think you guys could draw some interesting ideas about how over time biases creep in and out of your forecast, and that may be insightful to other forecasters (even in other fields) as well.

Again, though, great work.

Robert Bakhuis (Queenstown New Zealand):

As your article suggests what now. I think Boeing is on the right track your current new stable of aircraft works very well 737NG, 777 and the new 787 the only one I have reservations about is the new 747-800
I think that the 747 has been a great aircraft very low landing speed, high cruise speed, great passenger and freight layouts the only problem in today’s market is having 4 engines the doubled expense for the airlines.

Keep the design it's great but make 2 engined
Make this aircraft out of composite materials get the weight down to that of your 777-300ER and use the engines from that aircraft to power the new 747
The market place still need a 450 seat aircraft but they want the service economy that a large twin gives them

martin nix:

Having been one of those people who has worked the multiple regression equation used to predict aircraft sales, I find it interesting that Boeing has finally recognized the impact that high price of fuel has upon airlines. Back in the 1980's when I worked Sales and Marketing, noone believed me, that high fuel prices would salvo the airline noone disputes it.

One hole in the airline market Boeing has just abandoned is the under 100 passenger aircraft market. I still feel the company should take a look at the 'very thin' and 'very long' distance market, in that the demand for 50 passenger per day "city pairs" is huge.

What we need is a 50 to 100 pax aircraft that can 1) travel higher than anyone else, 2) faster than anyone else, 3) uses an environmentally friendly fuel, 4) travels longer distance than anyone else, 5) is more reliable than anyone else, and 6) lower cost to operate than anyone else and 7) is in an affordable price.

That I feel is a market the sales analyst should explore and then ask the question, can such a "mini-sonic" be would be more popular than the 737. Best Wishes, Martin Nix (Ex-Sales and Marketing)

Anderson Akoto (Kenya):

I was looking at the out of production planes at you website and I was wondering why. Then I thought of commenting about it. After the Paris air show you could renew the old planes such as the dc-10 which I think is the most gorgeous plane ever built. Airbus hasn`t made an A390.So the dc-10 could be given the 797-100.The others already have their model numbers.By doing so, airline companies will love to buy them. Airbus will be outwitted by the 707,717,727 and the dc-10(797). If you like my idea you can take it to the board of directors and plan.

John F. Bremer Jr. (Bellingham, Washington):

We just returned from a vacation in Sicily last week flying United and Ryanair on 777's, 757's and 737's. All the flights and cabin crew were great and the airplanes were great, but Ryanair felt like the future.

The smaller size of their 737's provides a great passenger experience at smaller airports. They load and unload really quickly from both ends, the overhead bins are within easy reach and the flights are a pleasant two or three hours. Also the Ryanair pilots and cabin crew are young and energetic, even when pitching you a 3 Euro bottle of water. In my ideal future I'd fly a 737 from Seattle to London; I'd just like it to be able to make the trip in under 3 hours!

Keith Sketchley (Saanich, B.C.):

An interesting note circa 1980, before de-regulation, is that forecasts for one airline in a particular market area tended to be overly optimistic when traffic was increasing and overly pessimistic when rate of traffic growth was slowing substantially, but fairly accurate over a decade or more.

The huge question is whether or not the attempt to blame humans for climate variation will have more political power in future. It has faded in voters’ priority, and some politicians appear to have backed away from it, but few incumbent politicians have rejected the phoney scare. It comes from an ideology of not trusting human creativity, productivity, and goodness. As a visible example of those attributes aviation is a political target.

Fuel prices are a big variable, I’d predict higher because of the higher cost of extracting oil from tar sands, shale, and more difficult to reach formations in North America, and the high cost making fuel from natural gas or coal which are plentiful. Technology will help greatly if allowed to.

- Keith Sketchley

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