Purpose of the forecast
The Current Market Outlook is our long-term forecast of air traffic volumes and airplane demand. The forecast helps shape our product strategy and guide long-term business planning. We have shared the forecast with the public for more than 50 years to inform decisions by airlines, suppliers, and the financial community.
We start fresh every year, factoring the effects of current business conditions and developments into our analysis of the long-term drivers of air travel. The forecast details demand for passenger and freighter airplanes, both for fleet growth and for replacement of airplanes that retire during the forecast period. We also project the demand for passenger-to-freighter conversions.
Effects of market forces
The aviation industry continually adapts to market forces. Key among these are fuel prices, economic growth and development, environmental regulations, infrastructure, market liberalization, airplane capabilities, other modes of transport, business models, and emerging markets. Fuel is now the largest component of airline cost structure. This fact has spurred manufacturers to produce more efficient airplanes, such as the 787 and the 737 MAX, and encouraged airlines to optimize other cost and revenue centers to maintain profitability in the face of high fuel prices.
Our long-term forecast incorporates the effects of market forces on the development of the aviation industry. Economic growth, as measured by gross domestic product (GDP), is a primary contributor to aviation industry growth. GDP is forecast to rise 3.2 percent over the next 20 years, which will drive passenger traffic to grow 5.0 percent annually and cargo traffic (which also depends on global trade) to grow 4.7 percent annually.
Shape of the market
We forecast long-term demand for 36,770 new airplanes, valued at $5.2 trillion. We project that 15,500 of these airplanes (42 percent of all new deliveries) will replace older, less efficient airplanes. The remaining 21,270 airplanes will be for fleet growth, which stimulates expansion in emerging markets and development of innovative airline business models. Single-aisle airplanes continue to command the largest share of the market. Approximately 25,680 new single-aisle airplanes will be needed over the next 20 years. Fast-growing low-cost carriers and network carriers pressed to replace aging airplanes drive single-aisle demand. The widebody fleet will need 8,600 new airplanes. The new generation of efficient widebody airplanes is helping airlines open new markets that would not have been economically viable in the past.