Start me up

There’s no doubt 2011 was a more challenging market than our customers anticipated. So what’s in store as we get deeper into 2012?

For airlines, the name of the game is profitability—and it’s good to see that IATA is forecasting modest profitability for the year. This is really a testament to our customers who’ve managed their capacity and costs despite high fuel costs and a sluggish economy. While it will be a challenging year, I’m still expecting to see passenger traffic grow by 5 percent. The cargo market should start to rebound in the second half of the year, although growth will be below the long-term average.

With our strong backlog and a market that keeps growing, every indicator shows that we’re on the right track as we increase our rates to keep up with the true demand in the market. That demand is coming from emerging and developing economies, growth from low-cost carriers, and the need to replace older aircraft with more fuel-efficient airplanes. In fact, we see more replacement than growth in both North America and Europe over the next 20 years. The chart below shows some of the key drivers of market growth.

image/photo

Next week, we’ll unveil our delivery guidance for 2012 as we release our earnings report. As we start up the new year, it should be very exciting— especially with the 737 MAX as we take the more than 1,000 orders and commitments for the airplane and bring them to the bank.

Comments (4)

Jon Evans (Coral Springs, FL):

Hi Randy,

Here is some great news on the 787 you might want to share with your readers. Contrats to all the hard working team at Boeing and the 787 workers. This award is well deserved!!

Boeing 787 Dreamliner to Receive Aviation's Highest Award

DENVER, Jan. 17, 2012 /PRNewswire-USNewswire/ -- Few aircraft since the Wright Flyer have truly become an "Aircraft of Legend." Like the DC-3, the technological advancements of the Boeing 787 Dreamliner are expected to profoundly impact commercial aviation. The Living Legends of Aviation have chosen the Boeing 787 Dreamliner to receive the "Aircraft of Legend Award" which will be presented at the 9th Annual Living Legends of Aviation Awards to be held January 20th at the Beverly Hilton in Los Angeles, Calif. Mr. Scott Fancher, VP and General Manager of the Boeing 787 Program, will be accepting the award on behalf of all who have contributed to the "Boeing Dreamteam." The Living Legends of Aviation Annual Awards is the most important and prestigious recognition event of aviation.
On December 17, 1903 at 10:31 am with Orville at the controls and Wilbur running along side steading the wing, the world experienced the first controlled powered flight. Exactly 100 years later the Living Legends of Aviation organization was born to celebrate and recognize significant contributions for the second hundred years of aviation.
The "Living Legends of Aviation" are a group of extraordinary people of accomplishment. They are defined as aviation entrepreneurs, innovators, record breakers, astronauts, industry leaders, pilots who have become celebrities and celebrities who have become pilots.
For more information please visit http://www.LivingLegendsofAviation.org.
SOURCE Kiddie Hawk Air Academy

Russel Ahmed (Dhaka, Bangladesh):

Hello Boss, You are absolutely right to say Start Me Up!!! Really true....737Max will rock the sky as it already boosts sales order. Emerging Asia, China, Middle East market will be the key focus through out this year. 737Max simply suites with the geographic business model as you have already mentioned. LCC carriers need to replace older aircraft and the solution is 737Max. The sky feels proud to smell the MAX

Norman (Long Beach, CA):

When the A320NEO was first introduced to the market, sales took off right away and the thought was before the 737MAX was launched was that the 737 was dead in the water not long after years of huge sales where made with the 737NG and when the 737MAX was introduced the reaction was initially slow but with a slew of new orders for the latest 737, nearly 1,000 orders, if not already, the popularity remains strong as the earlier 737 was before. the 737MAX is fully competitive in the orders game with the A320NEO family.

João Gabriel Vasconcellos (rio de janeiro ,rj,Brazil):

I love the new boeing 737 800 max its better them the ng (next generation) i think the boeing can put more analogic stuffs , for exemple the flaps marc graus and the anothers stuffs out of them the airplane its owesome

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