Randy's Journal: Archives

12 July 2006

In the year 2025

There was a pop song in the late 1960s called, "In the Year 2525." Aside from projecting a very gloomy outlook for the future, the song's performers, Zager and Evans, also have the dubious distinction of being the only group or artist to have a number one hit on both the U.S. and UK pop charts and then never have another single on those charts again.

I tell you this because, in contrast, our new commercial airplanes market forecast, which projects out through the year 2025, has a much more optimistic view. And we hope it will top the charts again this year!

I've just finished up a media briefing and teleconference from London today where we released our annual 20-year forecast for the commercial aviation market. Boeing's Current Market Outlook (CMO) is always rolled out around the big air show of the summer - this year's being the Farnborough International Air Show coming up next week.

Those of you who follow these things closely know that this forecast is a significant part of the story each year for us because it is a major influence on our business strategy going forward. You may have heard or read about me saying many times that our market forecast drives our product strategy.

So with that in mind, let's get to the data. We think that over the next 20 years air travel will grow an average of 4.9% a year, driven by an annual GDP growth rate of 3.1% - both up slightly from last year's forecast. Air cargo will grow at an average of 6.1% per year.

This means that the impacts of liberalization will continue. Airlines will continue to demand new airplanes so they can continue to respond to what passengers want: more nonstop, point-to-point flights, and more frequencies.

As a result, I think we'll see continued strong commercial airplane demand in the forecast period between now and 2025 - a $2.6 trillion market for new aircraft. That's an increase of $500 billion over last year's forecast.

And our forecast is up by about 1,500, to a projected 27,200 new airplanes over the next 20 years - including passenger airplanes and freighters.

You can see that single-aisles (737-size) will continue to be the majority of those new airplane deliveries - 61%. Twin-aisle jets in the category of 200-399 seats (767,777,787-size) will make up 23% of the demand. But I should point out that those same twin-aisles will comprise 45% of the dollar value of new deliveries.

Overall, the world commercial airline fleet will more than double over the next 20 years - to nearly 36,000 airplanes.

In the chart below, the figure of 17,330 represents the current worldwide commercial airplane fleet. 35,970 represents the size of the fleet we predict in 20 years.

So, we're projecting 17,630 new commercial airplanes due to growth between now and 2025.

Some airplanes will need to be replaced due to retirements, and we project that number to be about 9,580 airplanes. In all, airlines will need about 27,210 new airplanes to handle growth and replacement.

Combined with a retained fleet of about 8,760 airplanes (which are out flying today and will still be in the fleet in 2025) you get a total worldwide fleet of about 35,970 airplanes.

One of the more interesting projections in our outlook is that a lot of the growth will be in the Asia-Pacific market. In fact, in terms of delivery dollars, Asia-Pacific will make up 36% of the value of the commercial airplanes market.

Bottom line: while I can't yet provide a 500-year outlook all the way to the year 2525, I think I'll go out on a limb and say that 20 years into the future at least, people will still be flying on airplanes, and we'll still be making lots of them!

For more details click over to the 2006 Current Market Outlook page.

If you'd like to delve deeper into the forecast, you can view my 2006 Market Overview presentation.

And I'll be keeping you in touch with some of the doings throughout the upcoming week as the Farnborough Air Show gets underway.