The latest long-term forecasts from Boeing and Airbus point to better times.
Kevin O'Toole/LONDON
Given that they more or less failed to flag up the most severe downturn in airline history, the casual observer could be forgiven for having less than absolute faith in the forecasts turned out by the airliner manufacturers.
Such scepticism is not entirely fair. As forecasters are at pains to point out, their art involves looking across decades rather than years. They make few apologies for missing the individual peaks and troughs of the business cycle, as they chase the greater goal of finding the long-term trend.
Another good reason for paying attention to the forecasts is for what they reveal about the outlooks and aspirations of the aircraft manufacturers themselves. With the aircraft market on the cusp of emerging from recession, the latest rash of forecasts may be more important than most.
McDonnell Douglas has yet to issue its projections, but the two main protagonists have mapped out their predictions in the shape of the Airbus Global Market Forecast and Boeing's Current Market Outlook, published on 4 June.
Both analyses start from the assumption of a solid, but unexciting, annual rise in world passenger traffic, averaging 5.1% through to the year 2014. Boeing suggests a slightly more robust 5.8% traffic growth over the next five years, then reaching a plateau of 4.9% a year during the following decade as the world market continues to mature.
If the estimates prove correct, the overall volume of revenue passenger kilometres will have all but trebled over the next 20 years.
Calculating how this growth will translate into demand for new aircraft capacity is a more complex task. In part, at least, the answer will rest on how hard the airlines, press to increase their efficiency by pushing up aircraft utilisation and load factors. Airbus believes that better productivity could shave around 0.4% from annual seat-requirements.
Boeing, too, acknowledges that some of the traffic growth will be soaked up by efforts to raise load factors, but it suggests that the rise will be a gradual process, with the industry not managing to reach the 70% mark until well into the next decade.
The prediction could prove over-cautious, given the hard lessons on efficiency, which the airlines had to learn during the last recession. British Airways, increasingly used as an international benchmark for efficiency, is running at passenger load factors above 71% and hopes to keep them there.
Downward pressure on yields, the chief driver for efficiency improvements, is unlikely to abate, although Boeing suggests that the decline should now level out at 1.1% a year.
The fact that much of the projected traffic growth is due to come from lower-yielding personal travel, rather than premium business traffic, accounts for part of the fall in yields.
As an interesting aside, Boeing has trimmed its overall traffic predictions by 3%, to account for a rise in teleconferencing.
It assumes a 20% decline in business fliers travelling within their own companies and a 5% drop for other forms of business travel.
The other side of the aircraft-demand equation rests with the issue of retirement of existing capacity. Boeing suggests that more than 5,400 aircraft will leave the world fleet as they reach the end of an average 32-year service life.
Although there are still nearly 1,000 aircraft in storage, a legacy of the massive over-ordering of the 1980s, Boeing argues that only around 570 of these are serious candidates to return to service over the next few years. Assuming that a buffer of at least 250 aircraft remains parked at any one time, the net drag on new-aircraft demand is predicted to be around 300 units.
In these calculations, Boeing forecasts that the demand will top 10,000 new commercial jets through to the year 2014, giving a mouthwatering market value of more than $1 trillion. That would help the existing world fleet virtually double to 20,700 aircraft.
Airbus predictions show similar growth, although direct comparisons are near impossible since the two forecasts work from different bases. What is clear from both, is that the bulk of the deliveries are stacked towards the second half of the 20-year forecast period.
Boeing admits that the near-term outlook for deliveries is for "gradual recovery" with an increase in orders postponed until "the last years of the 1990s". For the next five years, the forecast is for deliveries to run at an annual average of 647 aircraft, worth $37 billion.
It will be the end of the decade before the numbers again climb above the peak of 800 aircraft reached in the early 1990s, but no one is suggesting a return to the ordering frenzy of the late 1980s.
There is also little disagreement over where future deliveries will be concentrated. The Asia-Pacific region, with traffic growth at a heady 7%, is expected to overtake Europe and come close to equaling North America as the world's premier travel market. Boeing's forecast also underscores the growing importance of the large wide-body market. Today's 1,000-strong fleet of 350-plus-seat aircraft is expected to grow almost fourfold, creating a massive $460 billion market for new deliveries. If anything, Airbus lays even more stress on the segment.
Unlike its European rival, Boeing has also taken a closer look at the regional-aircraft sector, perhaps spurred on by its New Small Aircraft talks in Asia. The category below 90 seats, now widened to cover 50-seaters, is expected to account for around 1,500 deliveries worth around $33 billion - almost double previous estimates.
Whether the predictions stand the test of time remains to be seen, but the battle lines are clearly being hardened for some further tough trans-Atlantic competition.
Source: Flight International
