Karen Walker
Boeing has more than doubled its market estimate for the commercial aircraft market following the inclusion of the aviation services that airlines need for efficient fleet operations. The total market ¡ services plus future new airplane deliveries ¡ is estimated to be worth more than $4 trillion over the next 20 years, according to the company¹s Current Market Outlook 2000, released at Farnborough yesterday.
³Boeing is, for the first time, including commercial aviation support services in the forecast. Last year, this market was worth a total of $87 billion and based on that we believe it will be a $2.6 trillion business over the next 20 years,² says Randy Baseler, Boeing Commercial Airplanes Group vice-president ¡ Marketing.
³That represents a great growth opportunity for Boeing. We have all the engineering data on 80% of the aircraft in the world, which gives us a great advantage.²
The report¹s departure from its traditional format reflects the reality of a more competitive industry, and a growing ¡ and to some extent aging ¡ worldwide airplane fleet, a testimony to the long-term utility and value of today¹s jetliners.
³The shift from a regulated to liberalized market has increased competition among airlines and is forcing them to operate at much higher levels of efficiency to remain profitable,² says Baseler. ³As a result, airlines are more interested in total lifecycle costs. They are redefining their business models and looking for ways to reduce their overall operating costs by either outsourcing non-core capabilities or diversifying to bring in revenue.²
Baseler points out that suppliers that are able to provide comprehensive, customised product-and-service packages will be highly sought by airline customers.
ExpensesAirline operating expenses cover all activities to attract customers and deliver passengers and cargo to their destinations.
These activities include a set of support services needed to operate airline fleets and eliminate surplus airplanes. In 1999 alone, airlines spent about $330 billion on operating expenses, with roughly $87 billion spent on support services.
Baseler says that over the next two decades airlines are expected to spend the most in the heavy maintenance, airport route and infrastructure, airplane servicing, and airframe component repair segments.
Boeing estimates the world fleet will be 31,755 jets by 2019 ¡ more than double that of today ¡ with two-thirds of the airplanes currently in service projected to be operating at the end of the forecast period. Additionally, the outlook estimates that 22,315 new airplanes will enter service to accommodate growth and replace airplanes that will be removed from service.
Of the $1.5 trillion that Boeing projects airlines will invest in new commercial airplanes over the next 20 years, about 55% will be for larger regional jets and single-aisle airplanes. Intermediate-size airplanes and small regional jets will receive nearly the same emphasis from fleet planners, while the market for 747-size and larger jets represents only 6% of the industry¹s total investment in new airplanes.
³We see market fragmentation continuing within regions and in intercontinental markets, which means airlines will rely more and more on smaller airplanes to meet passenger demand for nonstop flights and service between more cities,² Baseler says. ³North America will lead this trend with regional and single-aisle airplanes ¡ 717s, 737s, and 757s and the like ¡ while Asia-Pacific will receive the largest number of twin-aisle airplanes, such as 767s and 777s.²³We are now seeing this happen in Europe the way it happened in the USA with Southwest Airlines. Carriers like easyJet, Go, Ryanair and Virgin Express are causing the major European carriers to re-think their strategies²Baseler says the Current Market Outlook¹s projections for new airplanes are based on an annual worldwide travel growth of 4.8% over the next two decades, however, regional forecasts range from 2-8%.DeliveriesEurope and North America will have lower growth rates, although those regions will continue to take the most airplane deliveries. Asian economies, recovering from earlier crises, will experience above-average traffic growth, and deliveries to airlines in this region will increase. Latin America, also recovering from an economic crisis, will experience _some of the world¹s fastest traffic growth.Baseler says Boeing is encouraged by the growth it sees globally, and the opportunities it represents for the complete Boeing product line, especially in the long-range market.³Our new Longer-Range 777s and the 747X family are the perfect solutions for fragmenting, long-range markets around the world, especially in the North Pacific and Europe-Asia markets,² he says. ³The 777 family continues to reshape air travel, and our two new models will provide airlines with even more flexibility.² In response to questions about the arguments of airport congestion Baeler says: ³Aircraft with 300 seats or below make up 80% of the market and that is where the congestion is. Very large aircraft do not solve the congestion problem.³The 747X family will build on the market success and superior economics of the 747-400 and is the best choice for high-density, long-range markets. And it complements the capabilities of the 777. Together, these models can easily satisfy the requirements of the overall long-range market and we are convinced they are the right choice for the market.²The Boeing Current Market Outlook has been published for more than 30 years and is widely acknowledged as the leading industry forecast of worldwide air travel growth and new-airplane demand.
Source: Flight Daily News
