Boeing Sees $2.1 Trillion Airliner Market

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Boeing Projects $2.1 Trillion Market for New Commercial Airplanes

(Source: Boeing Co.; issued June 8, 2005)

LONDON --- Boeing sees a $2.1 trillion market for new commercial airplanes during the next 20 years. Market demands will more than double the world's commercial airplane fleet by 2024 and accommodate a forecasted 4.8% annual increase in passenger traffic growth.

The company released its 2005 Current Market Outlook today in London. The report is considered the most comprehensive and well-respected analysis of the commercial aviation market.

"The long-term demand for new airplanes is going to remain very strong over the next 20 years," said Boeing Commercial Airplanes Vice President of Marketing Randy Baseler. "People will continue to desire traveling where they want to go, when they want to go. And that's reflected in the number and types of airplanes we see in our forecast."

In terms of delivery dollars, the largest market is projected to be the Asia-Pacific region, with 36% of the $2.1 trillion total.

Boeing projects a need for approximately 25,700 new commercial airplanes (passenger and freighter) during the next 20 years, more than 80% of which will be in the single-aisle and mid-size twin-aisle categories. This compares with last year's projection of a 25,000 commercial airplane market, worth $2.0 trillion.

Over the next 20 years, airlines will take delivery of approximately:

--3,900 regional jets
--15,300 single-aisle airplanes
--5,600 mid-size twin-aisle airplanes
--900 airplanes 747-size or larger (approx. 450 airplanes in the 400-500 seats range and approx. 450 airplanes of 500 seats and above)

These deliveries will result in a world fleet of more than 35,000 airplanes.

"Single-aisle airplanes will dominate the market in the next 20 years because they allow airlines to offer more frequencies and increased nonstops in domestic service and short-haul international flights," Baseler said.

"Airlines will also be augmenting their fleets with mid-size twin-aisle airplanes to service long-haul markets across Pacific and Atlantic routes. Very large airplanes, 747-size and greater, will account for only a little over three percent of airplane deliveries in the next two decades."

Boeing is leading the market by providing a family of airplanes that allows customers to maximize their efficiency, increase profitability, and provide the nonstop, point-to-point flights, and frequency choices passengers want.

The updated Market Report in available on Boeing’s website, at: http://www.boeing.com/commercial/cmo/pdf/cmo_parisbook.pdf

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Very interesting numbers. Some however seem rather conflicting with Boeing's previous statement. In particular their claims about very large planes:

--900 airplanes 747-size or larger (approx. 450 airplanes in the 400-500 seats range and approx. 450 airplanes of 500 seats and above)
At the moment only the A380 can carry over 500 passengers (not counting the 747D). Does this mean that Boeing acknowledges the A380 will be succesful?

----3,900 regional jets
--15,300 single-aisle airplanes
hmmm, the number of regional jets in proportion to single-aisles seems to be rather low. I would expect there to be more RJs.

Also, what happened to regional turboprops? The Dash8 and ATR are not death yet!

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so selling 400 odd a380s's would make it a succesfull in relative/investment terms??

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hmmm, the number of regional jets in proportion to single-aisles seems to be rather low. I would expect there to be more RJs.

Also, what happened to regional turboprops? The Dash8 and ATR are not death yet!

If they believe in larger aircraft in point to point, then the RJs would go down in number. Also, anybody ever flies in those turboprops would opt for a RJ option...that's why embraer is doing so well.

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20 years 10 months

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Very interesting numbers. Some however seem rather conflicting with Boeing's previous statement. In particular their claims about very large planes:

At the moment only the A380 can carry over 500 passengers (not counting the 747D). Does this mean that Boeing acknowledges the A380 will be succesful?


I believe Boeing has decided to go ahead with the launch of the '747D'...(i.e. 747 Advanced)...and from what I understand it will have the capability to be configured with a capacity of over 500 seats. With this in mind, its safe to assume they intend to garner their share of the 500+ passenger airliner market, so I do not believe Boeing is acknowledging anything to the effect that they believe the A380 will be a success.

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Boeing gets more optimistic on demand for large airliners

Manufacturer boosts long-term forecast for sales of 400 seaters and above

Flight International
14-June-05

Boeing has significantly increased its market forecast for large airliners for the first time since the 1990s as it foresees greater demand for 747-size aircraft and larger.

Speaking at the launch of Boeing’s 2005 Current Market Outlook (CMO), which covers the period from 2005 to 2024, vice-president marketing Randy Baseler said that the company has upped its forecast for aircraft with 400 seats and above, and “large freighters” (with payloads greater than 65t), from 790 units last year to 900, comprising 590 new passenger aircraft and 310 new freighters. He added that the 15% increase in its demand forecast “is largely driven by the growth we’ve being seeing in Asia during the last year”.

The 900 units are split roughly 50/50 between the 747 category (400-500 seats) and the A380 (500 seats and above). Airbus predicts a market for 1,650 airliners/freighters in the 450-seat and above category over the next 20 years.

Last year, Boeing revised its forecast for the large-aircraft category downwards by around 20% from 970 in 2003. Baseler denied that the sudden increased optimism was connected to the fact that Boeing is preparing to launch a stretched 747 derivative, the 450-seat Advanced. The CMO predicts 25,700 new aircraft will be delivered over the next 20 years, worth $2,100 billion.

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From what I understand, the importance for Airbus to break into the market of large aircraft is to prevent Boeing from being able to sell the 747 at a "higher" price (ie higher than production costs) and then discount smaller aircrafts (in particular the 737). If that is the case, it would seem to me that we would need to take a larger pictures of the costs/benefits of Airbus in developping such a programme!!

Or am I way beyond the pale here?

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If that is the case, it would seem to me that we would need to take a larger pictures of the costs/benefits of Airbus in developping such a programme!!

Oh yes that was a part of the strategy..definately..boeing over the years has done just that..they have subsidized their 737 via the higher profits from the 747..nothing really wrong with that...Boeing by introducing the 747adv would atleast in a limited way make airbus more competitive in offering the a380 to potential customers thereby negating perhaps some of that high profit..but then again even factoring into that..would u my friend sekant have sunk in 13 billion dollars over the a380 given the chance now? ? ? Boeing meanwhile is spending(and has spend) its money elsewhere ie. in the dreamliner (totally different concept to the 380) and into the 737,777 production lines to make them leaner to save money as well as (proposed) 747adv to split the niche large aircraft market even further...

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but then again even factoring into that..would u my friend sekant have sunk in 13 billion dollars over the a380 given the chance now? ? ?

Considering that Airbus seems to be losing the edge it had gained over Boeing, the short term answer is probably no. But I would not be too harsh on Airbus management for several reasons (at least at this stage):
a) Boeing was bound to rebound (sounds weird), and at last make one right move (i.e. start making new planes again, rather than simply trying to make money as they seem to have done in the 1990s). No one ever doubted that Boeing is a great company and that they would be back!
b) It would have been fairly difficult for Airbus to launch the A350 instead of the A380. This would have meant to willingly undermine the A330.
c) As mentionned above, to level the playing field, Airbus had to have a product to challenge the 747. This may cost them in the short term but if they remain as innovative in the future as they have been in past 30 years, they should still be doing ok.