Boeing BA.N cut its rolling 20-year forecast for airplane demand on Tuesday as economic turmoil from the COVID-19 pandemic lays waste to deliveries in the next few years.
Boeing, which dominates jet sales together with Europe’s Airbus AIR.PA, forecast 43,110 commercial aircraft deliveries over the next 20 years, down 2% from 44,040 projected a year ago and worth an unchanged $6.8 trillion at list prices.
While fleets are still expected to almost double, it is the first time Boeing has cut the 20-year demand forecast in terms of the number of deliveries since the 2009 financial crisis.
Boeing also for the first time gave a partial breakdown for the first half of the 20-year period, showing steep declines for the coming decade on the heels of the COVID-19 crisis.
It predicted 18,350 deliveries in 2020-2029, down 10.7% from an unpublished forecast of 20,550 embedded in the last report.
“The industry clearly has been dramatically impacted … by the pandemic,” Commercial Marketing Vice-President Darren Hulst said.
A key forecast for passenger traffic growth underpinning the widely watched data – once a reliable 5% a year – has been edging lower since 2015 as a record aviation boom peaked. But it took a sharp knock lower in the latest report to 4% from 4.6% a year ago.
Even so, Boeing expressed confidence demand would return towards previous trends in the 2030s, echoing the rebound seen following previous shocks. Environmentalist critics say the crisis is an opportunity for the industry to get smaller.
“It will take longer from this crisis but … the industry will prove resilient again; the fundamentals aren’t changing,” Hulst said.
Demand will be buoyed in part by a rise in the number of replacements as airlines accelerate the retirement of older jets to save running costs and meet environmental goals, Boeing said.
Thousands of jets have been parked during the crisis, especially long-haul twin-aisle models, due to the widespread border restrictions choking international air travel.
Boeing cut its 20-year forecast for twin-aisles like its 787 Dreamliner and the Airbus A350 by 10.3%. At 7,480 jets, down from 8,340 a year ago, that part of the 20-year forecast is now below 8,000 units for the first time since 2010.
Twin-aisle demand will be especially slow in the next 10 years with deliveries of just 3,060 aircraft, Boeing said.
The 20-year forecast for smaller single-aisle jets, like Boeing’s grounded 737 MAX, dipped 0.5% from last year’s report.
Boeing now sees 32,270 deliveries in this medium-haul category, traditionally the cash cow of large planemakers. That includes 13,570 deliveries between now and 2029.
Although medium-haul travel is showing signs of revival, particularly in the booming China market, airlines there continue to sit on the sidelines due to U.S. trade tensions.
While global passenger demand has been mauled by COVID-19, demand for freighters has gone up as shippers seek alternatives to the cargo space being left empty in unused passenger jets.
Despite that near-term bump, Boeing cut its 20-year forecast for freighters by 10.6% to 930 jets as carriers group their shipments into bigger planes in a war to keep their costs down.