Tuesday, June 20, 2017

Boeing Sees More Than $6 Trillion in Plane Deliveries: Plane maker raises its 20-year industry forecast to 41,030 jetliners



The Wall Street Journal
By Robert Wall
Updated June 20, 2017 10:33 a.m. ET


LE BOURGET, France— Boeing Co. has raised its 20-year industry forecast for plane deliveries to 41,030 jetliners, with their value at list prices topping $6 trillion for the first time.

Boeing, the world’s No. 1 plane maker, said Tuesday that passenger traffic is poised to grow 4.7% over the next two decades. The outlook is more bullish than one that European rival Airbus SE delivered this month, which projected 4.4% growth.

Airbus and Boeing underscored the continued demand strength, principally in the large single-aisle plane sector, with several billion dollars of deals on Tuesday, the second day of the Paris Air Show.

More than half the planes Boeing expects the industry to deliver are intended to help airlines expand. The plane maker said the rest, about 43%, will be used to replace less-efficient planes being phased out. Almost 40% of the planes will go to customers in Asia, driven heavily by booming air traffic in China.

Growth is expected to be strongest in the hotly contested single-aisle segment, where Boeing offers the 737 family of planes and Airbus the A320 variants.

Boeing’s 20-year forecast calls for 29,530 new narrow body planes to make it into customer hands. On Monday, it launched its largest single-aisle plane, called the 737 Max 10, and said it had more than 10 customers committed to buying it.

In Paris, United Continental Holdings Inc. committed to taking 100 of Boeing’s Max 10s—the planes are a conversion from an earlier model. United also bought four 777-300ER long-range jets for delivery in the coming two years.

Lessor Avolon said it signed an agreement to buy 75 single-aisle planes from the U.S. manufacturer. China Aircraft Leasing Group is buying 50 of the U.S. narrowbodies, with Ryanair Holdings PLC, Europe’s largest airline by passengers, added 10 commitments for 737s. Boeing announced further over 30 additional single-aisle and widebody planes.

Airbus signed an agreement with Delta Air Lines Inc. for 10 more A321 narrowbodies, while Latin American discount carrier Viva Air committed to take 50 single-aisle jets. CBD Aviation, which Monday bought planes from Boeing, signed for 45 Airbus narrowbodies on Tuesday. Ethiopian Airlines also agreed to take 10 more A350-900 long-range planes in a deal valued at more than $3 billion at list price.

Boeing said in its 20-year outlook that demand for widebody planes, where it offers the 787 Dreamliner and 777 models, to reach 9,130 airplanes during the 20-year forecast period. Order bookings have slowed for big twin-engine planes over recent months but Boeing said there is “a large wave of potential replacement demand beginning early in the next decade.”

Randy Tinseth, vice president of marketing for Boeing’s commercial airplanes, said orders for big planes are likely to start picking up next year or in 2019 to meet the need for widebodies from 2021.

The Boeing and Airbus outlooks are broadly similar, though the U.S. manufacturer counts smaller planes not in its rival’s outlook. One segment where the two plane makers differ is in their demand forecast for the biggest passenger planes, where Boeing offers the 747-8 and Airbus its flagship A380 superjumbo.

Boeing said demand for that size plane will be principally in the cargo segment and that fewer than 100 passenger models of that type will be delivered during the coming 20 years. Airbus says more than 1,400 such planes will be delivered, including cargo models.

Both Airbus and Boeing have been forced to cut production rates of their biggest planes because of demand softness.

Boeing has shifted its focus to big twin-engine planes that can seat more than 400 passengers. By contrast, Airbus officials insist the market for its big, four-engine plane will recover. It used this week’s Paris Air Show to unveil plans for enhancements to the plane’s sizable wing to help boost fuel efficiency 4%, in the latest in a series of design tweaks to help lure customers. So far, those efforts have yielded no tangible results.

Airbus plane head Fabrice Brégier said the plane maker was in active talks for further A380 deals, though timing of when they would be completed remained uncertain. He expressed confidence the A380 would secure further orders once demand for big planes recovers.

Original article can be found here:  https://www.wsj.com

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