Boeing forecasts $15 trillion commercial airplane, services market

Boeing VP Randy Tinseth reveals the commercial market outlook at a packed Farnborough press conference. (Photo: Eric Brothers)

Boeing officials have raised the company’s long-term forecast for commercial airplanes to 42,730 new jets – valued at $6.3 trillion – throughout the next 20 years. Increasing passenger traffic and upcoming airplane retirements will drive global airplane fleet expansion, which also will sustain growing demand for commercial aviation services, presenting a total market opportunity of $15 trillion.

The company's annual forecast, renamed the Commercial Market Outlook (CMO) to include detailed analysis of the dynamic aviation services market, was presented Tuesday at the Farnborough International Airshow. Recognized as an industry benchmark for global air travel forecasting, the 2018 CMO projects the total number of airplanes increasing 4.1% from the previous forecast.

"For the first time in years, we are seeing economies growing in every region of the world. This synchronized growth is providing more stimulus for global air travel. We are seeing strong traffic trends not only in the emerging markets of China and India, but also the mature markets of Europe and North America," says Randy Tinseth, vice president of Commercial Marketing for The Boeing Company. "Along with continued traffic expansion, the data show a big retirement wave approaching as older airplanes age out of the global fleet."

According to fleet data, more than 900 airplanes today are more than 25 years old. By the mid-2020s, more than 500 airplanes a year will reach 25 years of age – double the current rate – fueling the retirement wave. Tinseth says the data explain why 44% of the new airplanes will be needed to cover replacement alone, while the rest will support future growth.

Including airplanes that will be retained, the global fleet is projected to essentially double in size to 48,540 by 2037.

The single-aisle segment will see the most growth during the forecast period, with a demand for 31,360 new airplanes, an increase of 6.1% from last year. This $3.5 trillion market is driven in large part by the continued growth of low-cost carriers, strong demand in emerging markets, and increasing replacement demand in markets such as China and Southeast Asia.

The widebody segment requires 8,070 new airplanes valued at nearly $2.5 trillion through the next 20 years. Widebody demand is spearheaded, in part, by a large wave of replacements beginning early in the next decade and airlines expanding their global networks.

Additionally, Boeing projects the need for 980 new production widebody freighters during the forecast period, up 60 airplanes from last year. In addition, operators are forecasted to buy 1,670 converted freighters.

The massive fleet generates a strong and growing demand for aviation services ranging from supply chain support (parts and parts logistics), to maintenance and engineering services, to aircraft modifications, to airline operations. During the next 20 years, Boeing forecast an $8.8 trillion market for commercial aviation services with annual growth of 4.2%.

"The commercial airplane business fuels an enormous ecosystem of service providers. Our combined forecast shows the full picture of the $15 trillion commercial market ahead of us," Tinseth says. "We see a market in which airlines outsource more and more, a market in which data and data analytics help aircraft and airline networks become more efficient and reliable, and a market in which new technologies provide new services solutions. All of these trends drive greater demand for integrated solutions over the life of an airplane."

Major categories in the services forecast include the $2.3 trillion market for maintenance and engineering, which covers tasks required to maintain or restore the airworthiness of an aircraft and its systems, components, and structures. Another major category is the $1.1 trillion market for flight operations, which covers services associated with the flight deck, cabin services, crew training and management, and airplane operations.

Geographically, the Asia Pacific region, which includes China, will continue to lead the way, accounting for 40% of total airplane deliveries and 38% of total services value. North America and Europe round out the top three.

Formerly known as Boeing's Current Market Outlook, the CMO can be found at www.boeing.com/cmo.

Earlier in July, Airbus released its updated Global Market Forecast with a similar prediction that the world’s passenger fleet will more than double to 48,000 aircraft in 20 years. Boeing’s rival anticipates traffic growing at 4.4% per year will drive a need for 37,400 new passenger and freighter aircraft valued at $5.8 trillion.