What Boeing sees in the next 20 years is not just about aircraft sales, but where the world is headed as new wealth, improved technology, and a desire to fly, all coincide. It’s somewhat scary as well as exciting, and its coming, ready or not.
There will be twice as many jet airliners in service by 2034 as today, that is a global fleet of 43,560, which will include 38,050 that have yet to be built, and many thousands that having been delivered, will themselves be approaching the end of their economic lifetime, since very old jets can cost a lot to maintain to their near new performance capabilities.
When he discussed the 2015 version of the 20 year rolling Commercial Market Outlook or CMO today, Boeing’s vice president of marketing, Randy Tinseth, made a number of big calls.
For the shorter term market jockeys, the ones who like to ride the bulls, this CMO has overall grown its predictions for the future by 3.5 percent compared to the CMO to 2033 that came out a year ago. Let’s call that a ‘buy’ for air transport related stocks, which can by easy extension, mean airport owners, airport retailing interests, and all manner of enterprises that depend on the rise and rise of air travel.
For the longer term analysts, let’s suggest it’s time to reflect on the needs and thus opportunities for infrastructure planning in airports, terminal access, and even terminal designs for that matter, since the Boeing CMOs have been coming out since 1961, and they are, notwithstanding short term economic or political shocks, almost frightening in their accuracy in calling growth trends with a bias to under-estimation.
Mr Tinseth made the point that despite detailed consultation and feedback with interested parties, in addition to other analysis, Boeing’s vision grows a little cloudy from about ten years out, in relation to where airlines, and airports will be, or indeed technology.
We can reasonably mention here that on recent guidance there may be entirely new airliners coming over the horizon by then and perhaps all sort of disruptive innovations that change the way travel is managed, sold, provided for, and conducted, whether in the air with better air traffic control, or in the terminals, or how it fits in with high speed rail in some parts of the world, and so forth.
But, there will be more of it.
Before getting into the specifics of the forecasts Mr Tinseth mentioned that in the past five years global economic growth had averaged 2.7 percent but passenger numbers had grown by almost 6.o percent. On that basis, even modest-to-good economic outcomes are driving very strong uptakes of air travel.
The key metrics that Mr Tinseth outlined were that over the current 20 years period world annual economic growth would average 3.1 percent, passengers measured by head count would rise by 4.0 percent, passenger traffic, that is numbers times distance flown, would rise by around 5.0 percent, but globally only 8.0 percent of this rise in overall activity would fly in larger aircraft than today.
If you have doubts about the last metric, it pays to study the new CMO here. It is the migration of traffic that once flew in small regional jets to standard sized single aisle jets, and the surging demand for such designs as the Boeing 737 MAX series, especially in Asia, for short to medium sized journeys that are behind our behinds mostly being crammed into such aircraft.
An experience some of us might prefer to avoid but can’t as the practice of cramming us in has already resulted in smaller wide bodied jets like the A330 being flown with 436 seats, or more than some A380s, and ditto 777s with more than 500 seats, to use an extreme example which is likely to become more common.
The outlook for air travel may not be pretty, but it does look more numerous and prosperous.