Boeing Sees 4.2% Gain in Airliner Market to $5.2 Trillion

Boeing Co. predicts demand in Asia will push commercial aircraft sales to $5.2 trillion over the next 20 years, as China overtakes the U.S. as the world’s largest aviation market.

Boeing, which makes more planes than anyone else, is projecting 4.2 percent more jetliner sales than it did in last last year’s forecast even with global shocks that periodically restrain transactions, said Randy Tinseth, vice president of marketing at Boeing’s commercial airplane unit. The outlook helps steer Boeing’s long-range planning for aircraft production.

China’s emergence as an aviation superpower will help drive the market expansion, as will airlines’ quest for more efficient aircraft and continued growth in the budget carrier sector, Tinseth said. Single-aisle jets, favored by low-cost carriers, will account for about 70 percent of the 36,770 planes that Chicago-based Boeing estimates will be sold by all companies through 2033, according to its annual market outlook released today.

“This market is strong and resilient,” Tinseth told reporters yesterday. Boeing’s new forecast is more bullish than in 2013 and 2012, when it raised the 20-year projection by 3.8 percent and 1.5 percent.

Although China’s domestic travel market is less than half that of the U.S., Boeing sees plane sales soaring there as the middle class expands. Boeing has unveiled sales of 205 narrow-bodies valued at $19 billion to Chinese carriers so far this year, Tinseth said in a June 30 blog post. Last year, one of every three 737s made by Boeing landed with China’s airlines.

China Boom

China is expected to account for about 40 percent of the 13,460 jets that will be delivered to the Asia-Pacific area over two decades, the most of any global region, Tinseth said. North America, the next largest region, follows with an expected 7,550 deliveries.

Boeing sees airlines’ quest for operating efficiency boosting demand for long-range, twin-engine jets such as its wide-body 777, generating $1.16 trillion in sales over two decades. The redesigned 777X, which can carry a jumbo’s capacity of 400 passengers, has attracted 300 orders valued at more than $100 billion at list prices since it was unveiled in November.

Four-Engine Models

Some of these sales will come at the expense of the industry’s largest models, Boeing’s 747-8 jumbo jet and Airbus Group NV’s A380 superjumbo.

Both of those planes have struggled to attract sales in an environment where crude oil costs more than $100 a barrel. Boeing’s 747-8 had just one order through June, while the A380 hasn’t attracted any new airline customers in two years and has unfilled production slots as soon as 2015.

Boeing sees a diminishing role for the four-engine planes, once synonymous with intercontinental travel, with 620 total sales valued at $240 billion through 2033. That’s an 18 percent drop from its 2013 forecast for the category.

“This is all about demand,” Tinseth told reporters in a telephone briefing. “It’s no surprise that market has struggled to take hold.”

Demand for smaller wide-bodies -- a group that includes the first version of the 787 Dreamliner and Airbus’s A330 -- also is forecast to taper as airlines shift to the bigger 787-10 and other fuel-efficient planes that seat more than 300 people, he said.

Boeing forecasts a $1.14 trillion market for 4,520 jets that seat 200 to 300 people, about the same as a year earlier.

Before it's here, it's on the Bloomberg Terminal.