LONDON - Is it really possible that 1990 was 20 years ago? That’s when the above titled movie was released, closing out the popular film trilogy.
It’s a fitting way to bookend our discussion of the commercial airplanes market for the next 20 years.
In the movie they go back in time to the old American “west.” In our version, which we call the Boeing 2010 Current Market Outlook (CMO), we go west, east and all points in between to see into the future of our industry.
I just released our report here in London.
Clearly, we’ve been through a couple of very difficult years, but things are getting better and we see the industry growing again - both in terms of passenger traffic and cargo traffic. Passenger traffic declined about 2% during the worst recession in 60 years. But as we’ve said before, this industry is resilient and is already coming back strong.
So, as Doc Brown declares in BTTF Part III, “The future hasn’t been written yet - no one’s has.” But here’s what we see coming down the pike:
Current Market Outlook 2010 - 2029
- Demand for 30,900 new commercial airplanes (passenger and freighter) valued at $3.6 trillion - a significant bump up from last year’s forecast.
- Strength and resilience in the single-aisle market - demand for 21,000 single aisles valued at $1.6 trillion
- Passenger traffic to grow 5.3% annually over the forecast period
- World economies rebounding with strong demand for new and replacement airplanes
- Increased traffic in emerging markets balancing airplane demand more evenly across the globe
We’ve been releasing our market outlook for 46 years now. It’s our analysis of both air travel and airplane demand. We happen to think it’s the most accurate and comprehensive forecast available for the commercial aviation market. Take a look at the graphic below:
Boeing’s market outlook is in line with the realities of the market. Looking back to our 2000 - 2019 forecast, we accurately projected the demand distribution by airplane type and quantity of aircraft ordered and delivered.
As you can see above, we do tend to forecast conservatively. For example, we under-forecasted the number of single-aisles and twin-aisles while over-estimating large airplane (747, A380) and regional jet demand.
Going forward, we see the world fleet size nearly doubling by 2029. The need to replace older, less efficient airplanes accounts for 44% of the projected market for new airplanes. 13,500 airplanes will be replaced over the next 20 years. At that rate, 82% of the fleet operating in 2029 will have been delivered after 2010!
I think the headline for this year is the surging demand for single-aisles. Today, there are 11,580 single-aisle airplanes in operation. But that single-aisle fleet is forecast to more than double, reaching 25,000 airplanes by 2029
What’s happening is the continued proliferation of low-cost carriers as well as growth in emerging markets such as India, China and Southeast Asia. Boeing has already announced production rate increases on our 737 line to accommodate this demand, and we’re seeing early evidence of it in increased order activity this year.
A visual indicator of the demand for single-aisles. Next-Generation 737s awaiting delivery at Boeing Field.
Demand will also come in the form of replacement needs as older aircraft such as the 737 Classics, A320s, and MD-80/90s are retired. We’ll see a wave of single-aisle aircraft retirements in the 2015 to 2017 time frame.
Yet, the fastest growing market will be for twin-aisles. The twin-aisle fleet will grow from 3,500 airplanes in operation today to 8,260 airplanes in 2029. In 20 years, much of the in-service fleet will be newer aircraft, such as the 787 and 777, offering more passenger comfort, improved efficiency, and better environmental performance than the airplanes they replace.
About 40% of the demand for twin-aisles will come from the Asia Pacific region. Also as you might expect, the Asia Pacific region in general shows the most robust market gains, with China leading the way.
The Middle East, where air travel is growing tremendously, is going to continue as another very strong market.
We expect the world fleet to reach 36,300 airplanes by 2029. Regional jets will represent only 6% of the world fleet versus 16% today. Single-aisle airplanes will represent 68% versus 61% today. Twin-aisle airplanes will increase from 19% to 23%. Large airplanes will decline from 4% to 3%.
Worldwide we see that airlines are going to be responding to passengers’ preference for more flight choices, lower fares and direct access to a wider range of destinations. That means more flights using more efficient airplanes.
This is why we continue to see a small market for large airplanes (747 and larger) - just 720 aircraft over the 20-year period. It’s still an important segment, but largely (no pun intended) for replacement of existing airplanes, not additional growth.
A quick note about freighters. We see an increase in the world freighter fleet from the current 1,750 airplanes to 2,980 airplanes - an increase of more than two-thirds at the end of the forecast period. This will require 2,490 freighters - 740 new-production freighters and 1,750 airplanes converted from passenger models.
High freight traffic growth levels in 2010, following the recession is driving our cargo forecast upward. But fundamentals will drive the growth - speed and reliability, consumer product innovation and global industrial interdependence.
So, that’s a lot to digest, but there’s plenty more in our report. We’ve transitioned to a Web-based Current Market Outlook report with a detailed forecast database that allows you to select just the data or regions you’re interested and then download the data for that region.
The online version - launched in 2009 - has been very popular, with more than 700,000 visits and 260,000 downloads. Be sure to check it out.
Here I am on the flight line at Boeing Field where I did a video and actually managed to walk and talk about our forecast. Click above to take a look.
By the way, we’ve also posted a interesting feature story you might call “the making of the CMO.”
Our 20-year forecast is really key to everything we do. It helps shape Boeing’s product strategy. We use the data and information from the forecast in developing our long-range business plan. And we share the data in the forecast with our suppliers and customers.
The better our forecast, the better our strategy, the better our business plan and the better advice we can give our customers and suppliers.
It’s quite a journey into time for our Current Market Outlook team.
Or, as Doc Brown would say in answer to Marty McFly’s question at the end of our featured film, “Where you goin’ now, back to the future?”
Nope. Already been there!