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Feature Story

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Boeing released its 20-year look at the future of the commercial aviation market on July 15.

Predicting the flight line in 2029

By Chuck Taylor

What will air transportation be like in 20 years?

Adrian Butler

BOEING/BERNARD CHOI

Mike Warner, left, manager of the Current Market Outlook team, and Shauna Bassett, CMO analyst, discuss the 2010 report with team members.

It's daunting and daring to predict the future two decades hence, but the years-long lead time involved in the design, sale, manufacture and delivery of a commercial airplane makes an informed guess essential to doing business.

On July 15, Boeing released its annual Current Market Outlook (CMO), an exhaustive estimate of future trends in commercial air transportation. It's the result of months of research and number-crunching by a small but diverse team of Boeing analysts who live and die by a massive spreadsheet but also exercise a great deal of dead reckoning to plot a plausible future.

"The shear volume of data makes you appreciate the level of detail that we strive to get to," said team member Jan Till.

Till is not intimidated by numbers. She's an aeronautical engineer with an MBA. "I started in the wind tunnels," she said. "But even coming from an engineering background, coming into this group, it was a little overwhelming."

The report assesses current passenger and cargo traffic and today's fleet and estimates how that traffic will change over the next 20 years and how the fleet needs to evolve.

"I pull schedules from websites and hand-craft a schedule based on as much realistic data as I can get," CMO Analyst Shauna Bassett said of the challenges of assessing the European charter market which has no published schedules.

Every airplane model with 30 or more seats, by every manufacturer, is part of the study. It covers scheduled and unscheduled air travel, passenger service and freight.

The data can be examined by region and by airplane type -- single-aisle, twin-aisle, regional jet and jumbo jet.

Each of about half a dozen team members has responsibility for a region of the world. Immersion is key -- in economics, in the airline landscape, in cultural trends.

And while the spreadsheet the team assembles demands certain kinds of information and a deep level of detail, team members have a fair amount of discretion in how they analyze their regions.

787 Dreamliner inspection

BOEING/BERNARD CHOI

CMO analysts Tom Glans, Anthony Ponton and Alex Heiter discuss the 2010 CMO data and potential product development scenarios at Boeing and Airbus with teammates.

"While we use last year's forecast as a base, we can change the whole thing if we want to -- it's not set in stone," said Shauna Bassett, a four-year veteran who previously has worked for three airlines and on Boeing military projects.

Bassett is in charge of the CMO's examination of Europe, one of the busiest and most complicated aviation markets in the world. One of her challenges is assessing the charter market. Without published schedules, it's a tough one to measure -- but it accounts for 10 percent to 20 percent of air travel in Europe, so it's an essential component of the CMO.

"I pull schedules from websites and hand-craft a schedule based on as much realistic data as I can get," Bassett said.

Till, who oversees Southeast Asia and Oceania, has her own challenges. That part of the world is an emerging market, with smaller airlines and nations now able to buy new airplanes thanks to rapidly expanding economies. Meanwhile, low-cost carriers "are bringing air travel to people who have never been on a plane before."

"We're not just stuck on 'last year plus 3 percent,'" Till said. "As markets evolve and the business models evolve and as the carriers' situations change, we really do try to take account of all that and start from the ground up each year."

Boeing shares the report, and much of the raw data that comprise it, with the general public. Anyone can download a spreadsheet of the results for further analysis. Internally, it's a dog-eared accessory to many cubicles, a bookmark in every Web browser. The CMO findings are announced to coincide with the year's biggest air show, this time the Farnborough International Airshow in England, which begins July 19. (Next year it will be the Paris Air Show. They are held in alternating years.) Later in the year, the Boeing team adds narrative analysis to a final version of the report.

787 Dreamliner inspection

BOEING/ED TURNER

Boeing uses the Current Market Outlook report information to create its product development and business strategies.

For Boeing and people who buy and sell commercial airliners, the questions the CMO answers are pretty straightforward: What kinds of airplanes, and how many, will be needed and when? What other products and services might be in demand?

But to answer them, Boeing's forecast team spends months consulting reams of data and experts inside and outside the company to explore a sequence of overlapping prerequisite questions:

Over the months, the team pours over data from such sources as the Official Airline Guide, aircraft utilization databases and databases of deliveries and order backlog.

They study traffic trends for individual routes, or "city pairs," and examine how the fleet serves these routes now and might in the future.

"As markets evolve and the business models evolve and as the carriers' situations change, we really do try to take account of all that and start from the ground up each year," Jan Till, Current Market Outlook analyst.

Analysts feed their findings into the Boeing-developed Microsoft Excel workbook, which undergoes continual refinement.

The variables under consideration seem endless. At weekly meetings leading up to the 2010 report, for example, team members pondered possible scenarios involving the futures of the Boeing 737 and 777 and the Airbus A320. The companies' plans for those venerable models have not been announced.

"Every year there's some sort of change to the product scenario," said Bassett. "We work very closely with product strategy, and they give us their best idea of what we're going to do -- whether it's a new airplane, a re-engined airplane, whether it's coming in 10 years or 20 years.

"It's not an easy process, but it's a fun process," she said.