LONDON (Reuters) - U.S. airplane maker Boeing (NYSE:BA) Co trimmed its projected industrywide demand for airplanes over the next 20 years, but said it expects deliveries to be stable excluding the Russian market.
Boeing projects airlines worldwide will need 41,170 new airplanes over 20 years with half of the deliveries for replacement aircraft, and with single-aisle aircraft accounting for about 75% of planes.
Boeing's new market outlook, released on Sunday ahead of the Farnborough Airshow, is down from its previous rolling 20-year-forecast of 43,610 deliveries.
The new estimate excludes the Russian market and its projection of 1,540 airplanes, because of the war in Ukraine and uncertainty about when manufacturers could again sell planes to Russian carriers.
Boeing slightly boosted its forecast for demand over the next 10 years to 19,575 airplane deliveries -- a higher projection even excluding the Russian market.
"That's a function of a depressed environment in 2021 falling off and a new trend year in 2031 being added," Darren Hulst, Boeing vice president for commercial marketing, told reporters in a briefing ahead of the Sunday release.
"It comes very close to our 2019" outlook if Russia was included.
Boeing also dropped its industrywide passenger traffic forecast growth rate slightly to 3.8% from 4%, but boosted its cargo growth forecast to 4.1% from 4% last year.
It cut its fleet growth forecast to 2.8% from 3.1%. Its forecast for widebody deliveries over 20 years fell from 7,670 to 7,230.
Boeing still projects the global airline fleet by 2041 will nearly double as it still sees a worldwide aviation demand COVID-19 recovery by early 2024.
Over the next 20 years Boeing said "long-term fundamentals remain intact."
"Our view of medium-term recovery -- when the industry gets back to 2019 levels of global airline traffic -- is largely unchanged" since 2020, Hulst said.
"Overall, we still see late 2023, early 2024 as the time where the industry recovers to full or at least the level of pre-pandemic traffic."
Boeing sees strong near-term demand for aircraft despite recession risks.
"The global industry is still on a recovery trajectory back to where the normal relationship of GDP and traffic would be," Hulst said.
"Any small blip from an economy standpoint would be probably overwhelmed by the demand that exists as a result of those normal economic relationships."
Boeing also projects the freighter fleet will grow 80% by 2041.
Air cargo is performing at "historic levels," Hulst said, saying it is in part "a function of the increasing strategic value of air cargo relative to supply chains that are challenged and shipping that is challenged."
Boeing sees e-commerce networks as helping to drive a "strategic shift to air cargo even into the medium- and long-term. ... This isn't just a blip in terms of shipping versus air."
Hulst said the number of routes with more than one airline operating has more than doubled over the last two decades -- representing 70% of all capacity.
It demonstrates "the continuous innovation that airlines need to have to continue to compete at lower costs to attract more and more traffic."
Air cargo still only accounts for 1% of global trade. "A small shift in terms of mode of transportation, of key elements of trade, makes a big impact in terms of demand for air cargo," Hulst said. - Investing.com