Boeing has bumped its long-term forecast for commercial aircraft, projecting a rising demand for 42,700 new jets, valued at $6.3 trillion, over the next two decades. Boeing also sees a $15 trillion market opportunity for aircraft and supporting services in the forecast period, which, aside of the rising passenger traffic and upcoming aircraft retirements, will be driven largely by budget carriers and the narrow-body jets the LCCs prefer to haul their passengers.

Rising demand for 42,700+ new aircraft

Boeing’s annual forecast for the commercial aviation industry, formerly known as the Current Market Outlook, and now renamed as the Commercial Market Outlook (CMO), was presented on July 17, 2018, at the Farnborough International Airshow in the UK. The 2018 CMO projects the total number of aircraft increasing 4.1% over the company’s previous forecast.

"For the first time in years, we are seeing economies growing in every region of the world. This synchronized growth is providing more stimulus for global air travel,” says Randy Tinseth, vice president of Commercial Marketing for Boeing. “We are seeing strong traffic trends not only in the emerging markets of China and India, but also the mature markets of Europe and North America."

"Along with continued traffic expansion, the data show a big retirement wave approaching as older airplanes age out of the global fleet," Tinseth adds. According to fleet data, today there are more than 900 planes that are over 25 years old. By the mid 2020's, more than 500 planes a year will reach 25 years of age – double the current rate – fueling the retirement wave.

Tinseth said the data explain why 44% of the new airplanes will be needed to cover replacement alone, while the rest will support future growth. Including the aircraft that will be retained, the global fleet is projected to essentially double in size to 48,540 by 2037.

According to Boeing’s projections, the single-aisle segment will see the most growth over the 20-year period, with a demand for 31,360 new airplanes, an increase of 6.1% over 2017. This $3.5 trillion market is driven in large part by the continued growth of low-cost carriers, strong demand in emerging markets, and increasing replacement demand in markets such as China and Southeast Asia.

Meanwhile, the wide-body segment will require 8,070 new aircraft valued at nearly $2.5 trillion over the next 20 years. Wide-body demand will be spearheaded, in part, by a large wave of replacements beginning early in the next decade and airlines deploying advanced jets such as the 787 Dreamliner and 777X to expand their global networks.

Additionally, Boeing projects the need for 980 new production wide-body freighters over the forecast period, up 60 airplanes over 2017. Operators are expected to buy 1,670 converted freighters.

Services to outpace the global fleet, grow 4.2% annually

According to Boeing’s analysis, the massive fleet generates a strong and growing demand for aviation services ranging from supply chain support (parts and parts logistics), to maintenance and engineering services, to aircraft modifications, to airline operations. Hence, over the next 20 years, the Chicago-based plane maker forecasts an $8.8 trillion market for commercial aviation services with annual growth of 4.2%.

"The commercial airplane business fuels an enormous ecosystem of service providers.  Our combined forecast shows the full picture of the $15T commercial market ahead of us," Tinseth observes. "We see a market in which airlines outsource more and more, a market in which data and data analytics help aircraft and airline networks become more efficient and reliable, and a market in which new technologies provide new services solutions.” According to Tinseth, “All of these trends drive greater demand for integrated solutions over the life of an airplane."

Major categories in Boeing’s services forecast include the $2.3 trillion market for Maintenance & Engineering, which covers tasks required to maintain or restore the airworthiness of an aircraft and its systems, components, and structures. Another major category is the $1.1 trillion market for Flight Operations, which covers services associated with the flight deck, cabin services, crew training and management, and aircraft operations.

In terms of geographic regions, the aircraft and services demand are similarly geared toward the major growth markets. According to Boeing’s new forecast, the Asia Pacific region, including China, will continue to lead the way, accounting for 40% of total airplane deliveries and 38% of total services value. North America and Europe round out the top three.