A Boeing 777X aircraft flies over the Boeing Everett Factory
David Ryder | Reuters
The manufacturer forecast Tuesday that the world’s airlines will need 18,350 aircraft valued at $ 2.9 trillion over the next 10 years, down 11% from a year-ago forecast and a staggering forecast after years of strong Growth when traveling around the world.
Boeing shares fell after the report was released, falling more than 3% in afternoon trading.
By 2039, Boeing forecast 43,110 deliveries of new aircraft, three quarters of which are single-aisle jets that will be used for short distances. In its annual forecast last year, Boeing estimated 44,040 aircraft to be delivered to customers by 2038.
Airlines around the world are suffering from the pandemic and a web of travel restrictions that has destroyed bookings. Boeing said demand for new commercial aircraft in the medium term will be driven by airlines replacing older, less fuel efficient aircraft, rather than growth-oriented purchases.
According to a forecast by the International Air Transport Association, a trading group that represents many of the world’s airlines, global demand for travel will not recover to pre-pandemic levels until 2024.
“The industry has faced challenges before, and comparatively, that challenge is … without question greater,” said Darren Hulst. Boeing’s vice president of commercial marketing. He added the industry had previously recovered from crises and is likely to recover, but that it will likely take several years.
According to Hulst, the recovery of long-haul international travel is likely to take longer than shorter domestic routes, in line with previous industry forecasts. One bright spot during the pandemic is Air freightHulst said, citing the grounding of hundreds of passenger jets that have taken capacity off the market.
Another positive indication is the defense that has become more and more important for Boeing as commercial aviation suffers. Boeing projected a $ 2.6 trillion market for the defense and aerospace sectors over the next 10 years, up $ 100 billion from last year’s estimate.
In the first half of 2020, Boeing’s revenue declined 26% to $ 28.7 billion. The Defense and Space division generated nearly 44% of that revenue, compared to 34% of revenue in the first six months of 2019.