News Release
Issued: Oct 6, 2020 (11:00am EDT)
To view this
release online and get more information about Boeing, visit: https://boeing.mediaroom.com/2020-10-06-Boeing-Forecasts-Challenging-Near-Term-Aerospace-Market-with-Resilience-in-Long-Term
Boeing Forecasts Challenging Near-Term Aerospace Market with
Resilience in Long Term
- Near-term industry challenges impact demand for commercial
airplanes and services
- Over 10 years, Boeing Market Outlook shows resilient $8.5
trillion total market
CHICAGO, Oct. 6, 2020 /PRNewswire/ -- Boeing
[NYSE: BA] today released its annual forecast for the commercial and defense
aerospace market, reflecting the impact of the COVID-19 pandemic and
Boeing's view of near-, medium- and long-term market dynamics. The 2020 Boeing
Market Outlook (BMO) projects that the commercial aviation and
services markets will continue to face significant challenges due to the
pandemic, while global defense and government services markets remain more
stable.
"While this year has
been unprecedented in terms of its disruption to our industry, we believe that
aerospace and defense will overcome these near-term challenges, return to
stability and emerge with strength," said Boeing Chief Strategy Officer
Marc Allen.
The BMO forecasts a total
market value of $8.5 trillion over the next decade including demand for
aerospace products and services. The forecast is down from $8.7 trillion a year
ago due to the impact of the COVID-19 pandemic. Airlines globally have begun to
recover from a greater than 90% decline in passenger traffic and revenue early
this year, but a full recovery will take years, according to the outlook.
The 2020 Boeing Market
Outlook includes projected demand for 18,350 commercial airplanes in the next
decade – 11% lower than the comparable 2019 forecast – valued at about $2.9
trillion. In the longer term, with key industry drivers expected to remain
stable, the commercial fleet is forecasted to return to its growth trend,
generating demand for more than 43,000 new airplanes in the 20-year forecast
time period.
The BMO also projects a $2.6
trillion market opportunity for defense and space during the next decade. This
spending projection reflects the ongoing importance of military aircraft,
autonomous systems, satellites, spacecraft and other products to national and
international defense. This demand continues to be global in nature with 40
percent of expenditures expected to originate outside of the United States.
While near-term commercial
services demand is lower, the BMO forecasts a $3 trillion market opportunity
for commercial and government services through 2029, with digital solutions
emerging as a critical enabler as customers focus on leaner operations to
adjust to future market demand. Life cycle services and support will help
customers scale their operations to meet efficiency and cost objectives aligned
to market recovery trends.
As the impact of the pandemic
continues, Boeing is taking action to reshape its business operations to adapt
to the new market reality and become more resilient for the long term. This
business transformation includes every element of Boeing's enterprise,
including infrastructure, overhead and organization, portfolio and investments,
supply chain health and operational excellence.
Also released today, the 2020
Commercial Market Outlook (CMO), an annual 20-year forecast addressing the
market for commercial airplanes and services, projects an increase in the share
of deliveries replacing older passenger aircraft that are being retired in an
accelerated replacement cycle, especially in the first decade.
"Commercial aviation is
facing historic challenges this year, significantly affecting near- and
medium-term demand for airplanes and services," said Darren Hulst, vice
president, Commercial Marketing. "Yet history has also proven air travel
to be resilient time and again. The current disruption will inform airline
fleet strategies long into the future, as airlines focus on building versatile
fleets, networks and business model innovations that deliver the most
capability and greatest efficiency at the lowest risk for sustainable
growth."
The commercial forecast
includes:
- Over the
next 20 years, passenger traffic growth is projected to increase by an
average of 4% per year.
- The global
commercial fleet is expected to reach 48,400 by 2039, up from 25,900
airplanes today. During this period, Asia will continue to expand its
share of the world's fleet, accounting for nearly 40% of the fleet
compared to about 30% today.
- Single-aisle
airplanes such as the 737 MAX will continue to be the largest market
segment, with operators projected to need 32,270 new airplanes in the next
20 years. Single-aisle demand will recover sooner due to its key role in
short-haul routes and domestic markets as well as passenger preference for
point-to-point service.
- In the
widebody market, Boeing forecasts demand for 7,480 new passenger airplanes
by 2039. Widebody demand will be affected by a slower recovery in
long-haul markets – typical after air-travel shocks – as well as
uncertainties from COVID-19's impact on international travel.
- Air cargo
demand, a relative bright spot in 2020, is expected to grow 4% annually
and generate further demand for 930 new widebody production freighters and
1,500 converted freighters over the forecast period.
Airplane demand, 2020-2039 |
||
Airplane type |
Seats |
Total deliveries |
Regional jets |
90 and below |
2,430 |
Single-aisle |
90 and above |
32,270 |
Widebody |
7,480 |
|
Freighter widebody |
--------- |
930 |
Total |
--------- |
43,110 |
The global airplane fleet
will continue to generate demand for aviation services, including parts and
supply chain; engineering, modifications and maintenance; training and
professional services; and digital solutions and analytics. The served
market for commercial services is valued at $1.6 trillion, and $1.4 trillion
for government services.
"Boeing is focused on
making sure that the right services solutions are available to help our
customers and industry navigate the downturn and scale their operations
accordingly as near-term demand trends upward. For example, low-cost digital
solutions can help manage some of the most critical and dynamic aspects of
operations, such as crew scheduling," said Eric Strafel, vice president,
Boeing Global Services Strategy.
Around the world, the
long-term need for commercial pilots, maintenance technicians and cabin crew
remains robust. Boeing's 2020 Pilot and Technician Outlook forecasts that the
civil aviation industry will need nearly 2.4 million new aviation personnel
between now and 2039.
The Commercial Market Outlook
is the longest-running jet forecast and is regarded as the most comprehensive
analysis of the commercial aviation industry. The CMO and other Boeing market
forecasts can be found at https://www.boeing.com/market.
Forward-Looking
Information Is Subject to Risk and Uncertainty
Certain statements in this
release may be "forward-looking" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "expects,"
"forecasts," "projects," "plans," "believes,"
"estimates" and similar expressions are used to identify these
forward-looking statements. Examples of forward-looking statements include
statements relating to our future plans, business prospects, financial
condition and operating results, as well as any other statement that does not
directly relate to any historical or current fact. Forward-looking statements
are based on current assumptions about future events that may not prove to be
accurate. These statements are not guarantees and are subject to risks,
uncertainties and changes in circumstances that are difficult to predict.
Many factors could cause
actual events to differ materially from these forward-looking statements,
including economic conditions in the United States and globally, general
industry conditions as they may impact us or our customers, and other important
factors disclosed previously and from time to time in our filings with the
Securities and Exchange Commission. Forward-looking statements speak only as of
the date they are made and we undertake no obligation to update or revise any
such statement, except as required by law.
Boeing is the world's largest
aerospace company and leading provider of commercial airplanes, defense, space
and security systems, and global services. As a top U.S. exporter, the company
supports commercial and government customers in more than 150 countries and
leverages the talents of a global supplier base. Building on a legacy of
aerospace leadership, Boeing continues to lead in technology and innovation,
deliver for its customers and invest in its people and future growth.
No Quick Recovery: Boeing’s Pessimistic Forecast
Boeing released its “2020 Boeing Market Outlook (BMO)” today that says while defense and government services are expected to remain stable, overall conditions for the airlines “will continue to face significant challenges due to the pandemic.” Looking out of the next decade, Boeing estimates the overall market demand will fall from $8.7 to $8.5 trillion, and that while airlines are now recovering slowly “a full recovery will take years.” The overall outlook predicts demand for airliners of all sizes to be 11 percent lower than estimated last year, amounting to 18,350 units over the next decade. “In the longer term, with key industry drivers expected to remain stable, the commercial fleet is forecasted to return to its growth trend, generating demand for more than 43,000 new airplanes in the 20-year forecast time period,” the report said. In general, the single-aisle airliner and freighter markets are expected to recover sooner than for widebody aircraft, based on the slower recovery for long-distance travel demand.
“While this year has been unprecedented in terms of its disruption to our industry, we believe that aerospace and defense will overcome these near-term challenges, return to stability and emerge with strength,” said Boeing Chief Strategy Officer Marc Allen.
Even with the recent precipitous decline considered, Boeing feels that there is demand for “more than 43,000 new airplanes in the 20-year forecast time period” as well as a $2.6 trillion market for defense and space just in the next decade. “This spending projection reflects the ongoing importance of military aircraft, autonomous systems, satellites, spacecraft and other products to national and international defense. This demand continues to be global in nature with 40 percent of expenditures expected to originate outside of the United States,” says Boeing.
“Commercial aviation is facing historic challenges this year, significantly affecting near- and medium-term demand for airplanes and services,” said Darren Hulst, vice president, commercial marketing. “Yet history has also proven air travel to be resilient time and again. The current disruption will inform airline fleet strategies long into the future, as airlines focus on building versatile fleets, networks and business model innovations that deliver the most capability and greatest efficiency at the lowest risk for sustainable growth.”
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