Coverage by Chris Sloan
PARIS — At the opening day of the 2019 Paris Air Show, Boeing unveiled its updated 10- and 20-year market outlook for its commercial, defense, and lifecycle solutions divisions.
The North American planemaker, who landed in Paris amid an intense crisis generated by the worldwide grounding of its entire 737 MAX fleet, forecasts that the aerospace and defense market will be valued at $8.7 trillion over the decade—an increase from the $8.1 trillion it projected last year.
The Boeing Market Outlook (BMO) projects a total of $3.1 trillion in demand for commercial aviation, $2.5 trillion for defense and space, and another $3.1 trillion for maintenance and other expenses.
“Aerospace and defense continues to be a healthy and growing industry over the long term, boosted by strong fundamentals across the commercial, defense, and services sectors and demand that is geographically-diverse and more balanced between replacement and growth than ever before,” said Boeing Chief Financial Officer and Executive Vice President of Enterprise Performance & Strategy, Greg Smith.
In addition to the 10-year Market Outlook, Boeing also unveiled a longer 20-year outlook for the aerospace industry as a whole.
The more extensive projection, known as the Commercial Market Outlook, projects a need for 44,040 new aircraft valued at $6.8 trillion. Services needed to support the commercial aviation industry is estimated to total $9.1 trillion.
In total, Boeing estimates that the commercial aviation industry will require $16 trillion in investment through 2038.
“Time and again, commercial aviation has shown itself to be extremely resilient,” affirmed Boeing’s Marketing Vice President, Randy Tinseth, who hasn’t missed an air show in years.
“Notwithstanding some recent moderation in passenger and cargo traffic growth, all indications are pointing to our industry sustaining its unprecedented streak of profitable expansion. In fact, we see a market that is broader, deeper and more balanced than we have seen in the past,” he explained.
Tinseth added that for Boeing, the healthy market fundamentals “will fuel a doubling of the commercial fleet over the next two decades and a massive ecosystem of lifecycle solutions to maintain and support it.”
An estimated 44% of new aircraft through 2038 will be used to replace existing aircraft with the remainder used for growth. The global commercial aviation fleet is projected to rise to 50,660 aircraft in this time.
Fueling the need for these aircraft will be the increasing demand for air travel that is expected to increase 4.6% annually for passengers and 4.2% for cargo.
Boeing projects single-aisle narrow-body aircraft, such as the 737 MAX and newly acquired Boeing Brasil-Commercial E-Jet (Embraer), will remain the largest segment in commercial aviation with a 20-year need of 32,420 new aircraft.
An estimated 8,340 wide-body passengers aircraft and 1,040 new large freighter aircraft will be required in this time.
Of the 1,040 new large freighter aircraft, Boeing is positioned to score big with its 747-8F, 767F, and 777F—all proving to be significantly more popular than Airbus’ lone A330-200F.
To support the growth and maintenance of the global commercial aviation fleet, Boeing projects a $9.1 trillion market for commercial aviation services.
“This is a very dynamic and exciting marketplace, one that is driven by new technology and a relentless drive for greater efficiency, reliability, and safety,” said Tinseth.
“On the technology front, we see operators using drones to inspect airplanes, and manufacturers delving into data analytics for insights to improve airplane maintenance and performance. Above all, operators are looking to providers to offer solutions that help them serve their customers more efficiently and reliably,” he concluded.
China and the Asia-Pacific region as a whole are seen as driving forces behind the rapid growth in the commercial aircraft market and service industry.
Boeing estimates 40% of total aircraft deliveries and 38% of total service value to originate from Asia.
The upbeat market outlook provided by Boeing comes amid increasing turmoil within the United States aerospace giant due to the high profile grounding of the 737 MAX.
With Airbus unveiling its newest and up-gauged A321XLR narrow-body with a range of 4,700 nautical miles, Boeing finds itself in a tough position with no competing aircraft.
Plans for a New Midsize Airplane (NMA) appear to be progressing slowly but final approval for the next generation aircraft has yet to be given according to reports.
No program launch is expected at this year’s Paris Air Show. And as far as Boeing’s first sales day at the Paris Air Show, not a single order for its passenger airplanes division was logged.