Boeing Co on Tuesday cut its rolling 20-year forecast for airplane demand, sending its shares lower as the COVID-19 pandemic lays waste to deliveries over the next few years.
The US planemaker, which dominates jet sales together with Europe’s Airbus SE, forecast 43,110 commercial aircraft deliveries over the next 20 years, down 2 percent from 44,040 projected a year earlier and worth an unchanged US$6.8 trillion at list prices.
While fleets are still expected to almost double, it is the first time since the 2009 financial crisis that Boeing has cut its 20-year demand forecast in terms of the number of deliveries.
Photo: AFP
Boeing, also for the first time, lifted the lid on the first half of the 20-year period, showing steep declines for the coming decade on the heels of the COVID-19 crisis.
It predicted 18,350 deliveries from this year to 2029, down 10.7 percent from an unpublished forecast of 20,550 embedded in the last report.
“The industry clearly has been dramatically impacted ... by the pandemic,” Boeing commercial marketing vice president Darren Hulst said.
Boeing shares fell as much as 3.3 percent after the report.
A key forecast for passenger traffic growth — once a reliable 5 percent a year — has been edging lower since 2015 as a record aviation boom peaked, but it took a sharp knock lower in the latest report, falling to 4 percent from 4.6 percent a year earlier.
Boeing, the US’ largest exporter, lowered its assumption for average global economic growth over 20 years to 2.5 percent from 2.7 percent after the pandemic plunged key markets into recession.
Even so, Boeing expressed confidence that demand would return toward previous trends in the 2030s, just as it did after earlier economic shocks.
Environmentalist critics say that the crisis is an opportunity for the industry to get smaller.
“It will take longer from this crisis but ... the industry will prove resilient again; the fundamentals aren’t changing,” Hulst said.
Demand would be buoyed in part by a rise in the number of replacements as airlines accelerate the retirement of older jets to save running costs and meet environmental goals.
Thousands of jets have been parked during the crisis, especially long-haul twin-aisle models, owing to the widespread border restrictions choking international air travel.
Boeing cut its 20-year forecast for twin-aisle models such as its 787 Dreamliner and the Airbus A350 by more than 10 percent.
At 7,480 jets, down from 8,340 a year earlier, that part of the 20-year forecast is now lower than 8,000 for the first time since 2010.
Twin-aisle demand would be especially slow in the next 10 years, with deliveries of only 3,060 aircraft, Boeing said.
The 20-year forecast for smaller single-aisle jets, such as the grounded 737 MAX, dipped 0.5 percent from the last survey. Previously Boeing had been revising it up by about 3.5 to 4 percent year in, year out.
Boeing now sees 32,270 deliveries in the medium-haul single-aisle category, traditionally the cash cow of large planemakers. That includes 13,570 deliveries between now and 2029.
Boeing cut its 20-year forecast for freighters by 10.6 percent to 930 jets on weaker trade and a move by carriers to group shipments into bigger jets to reduce costs.
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