Boeing lifts 20-year
industry demand forecast to $6 trillion
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[June 20, 2017]
By Tim Hepher and Victoria Bryan
(Reuters) - Boeing raised its 20-year industry forecast for passenger
and freight plane deliveries by 4 percent on Tuesday, though executives
at the world's biggest airshow in Paris expect demand this year to cool
from recent red-hot levels.
The U.S. planemaker continued to rack up orders at the Paris Airshow for
a new model of its best-selling 737 aircraft, which was launched on
Monday amid a flurry of deals.
Leasing firm Aviation Capital Group (ACG), for example, said it had
placed an order for 20 of the new 737 MAX 10 jets, worth a total of $2.5
billion at list prices.
"It is getting a big endorsement from airlines and that is leading to
more lessors endorsing it too," Ihssane Mounir, Boeing vice president
for sales and marketing, told reporters.
But analysts expect demand at the June 19-25 event in Paris to fall
short of recent years, and some aviation companies have cut back on
staff and hospitality at the show.
Over the longer term, though, Boeing sees an industry in rude health,
forecasting 41,030 plane deliveries worth more than $6 trillion over the
next two decades, up from 39,620 in a similar projection a year ago.
Boeing's projection includes a 5 percent increase in the 20-year
forecast for deliveries of single-aisle aircraft such as the Boeing 737
and Airbus A320 families, the cash cows of the world's two largest
Boeing now expects 29,530 deliveries in the medium-haul single-aisle
category, which is popular with low-cost airlines.
Aircraft leasing company Avolon announced a provisional deal on Tuesday
to buy 75 Boeing 737 MAX 8s worth $8.4 billion at list prices and said
it would have a "hard look" at possible orders for the MAX 10.
Airbus, meanwhile, agreed a provisional $5 billion deal with low-cost
carrier Viva Air Peru for 50 A320 jets, confirming a Reuters report.
Air travel has been on a sharp uptrend, led by emerging economies as
China looks set to replace North America as the world's biggest
transport market in the coming years.
But China's economic expansion is slowing, even though it remains above
6 percent a year. Boeing trimmed its 20-year forecast for average global
traffic growth to 4.7 percent from 4.8 percent.
Airbus took a similar step with its 20-year forecast released earlier
this month, though it raised its projection for total deliveries by 6
percent from last year to 34,899 aircraft.
Boeing's overall tally is higher partly because it counts aircraft with
90 seats or more, whereas Airbus starts at 100.
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Visitors walk past the aircrafts on the static display during the
52nd Paris Air Show at Le Bourget Airport near Paris, France, June
20, 2017. REUTERS/Pascal Rossignol
With demand for new jets cooling, planemakers are seeing greater
opportunities in aviation services.
Boeing forecast that market could be worth $8.5 trillion over 20
years, growing at an average 4 percent a year. Airbus launched a
digital services platform on Tuesday, which it said could crunch
data to help airlines improve maintenance, reduce fuel burn and
BIGGER NOT BETTER?
In a symbolic change likely to rankle with its European rival,
Boeing ditched its forecast for very large four-engined airplanes
such as the Airbus A380 and its 747-8. For the first time, it lumped
these models with large two-engined jets such as the Boeing 777 and
the largest Airbus A350.
Boeing has long argued that the "very large" category is on its way
out as airlines switch to smaller twinjets. Both manufacturers have
had to cut output of four-engined jumbos.
"Frankly, we look at the demand for really big airplanes and we find it hard to
believe that Airbus will be able to deliver the rest of their A380s in backlog,"
Boeing Marketing Vice-President Randy Tinseth said in a briefing.
Airbus insists the double-decker A380 has a future due to airport congestion and
predicts 5 percent of aircraft delivered over the next 20 years will be very
large people carriers or freighters, even though it lowered its forecast.
"They would do that, the 747-8 isn't selling," Airbus sales chief John Leahy
said of Boeing's decision to ditch its separate forecast for the biggest planes.
"We have no intention of sharing that market with them, albeit a smaller market
than we might have thought."
"Traffic is doubling," he said. "(Boeing's) explanation is we'll fly more
flights. I'm sorry, but you can't do it. You have to have bigger aircraft."
Boeing predicted demand for 920 cargo planes, down 1 percent from its previous
forecast. Much air cargo nowadays goes in the belly of wide-body passenger
planes rather than freighters.
(Additional reporting by Andrea Shalal, Matthias Blamont, Giulia Segreti, Mike
Stone, and Alwyn Scott in Seattle; writing by Mark Potter; editing by David
Evans and David Clarke)
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