As Airbus Looks Forward to $4.6 Trillion Future, Boeing says more like $5.2 Trillion

Chart of China Demand by Boeing

It goes without saying that both manufacturers assert that they are ideally positioned to capitalise on all this growth. We’ll let Leahy and Tinseth battle it out in their own words here:

John Leahy/Airbus

“Aviation is growing impressively and our latest forecast confirms its long term growth. While mature aviation regions such as Europe and North America will continue to grow, Asia will stand out along with emerging markets for dynamic development,” said John Leahy, Airbus Chief Operating Officer, Customers. “This growth trend is confirmed by Chinese domestic traffic becoming the world’s number one aviation market within the next 10 years”.

“We see especially strong growth in widebody twins such as our A350 XWB and A330neo. Demand exceeds supply for these new generation aircraft, especially in the 2017 to 2022 time period and beyond, so naturally we are studying production increases on both models,” said John Leahy. The first A350 XWB will be delivered later this year while the first A330neo in 2017.”

Randy Tinseth/Boeing

“China’s aviation market is going through dynamic changes,” said Randy Tinseth, Boeing Commercial Airplanes vice president of Marketing. “New business models like low-cost carriers and airplane leasing companies, a new generation of fuel-efficient airplanes and evolving consumer needs are driving demand for more direct flights to more destinations.”

Boeing airplanes such as the 737 MAX, 777X and 787 Dreamliner are well positioned to take passengers directly to their destinations and help airlines generate more revenue.

The new CMO also shows how the emergence of start-up airlines and low-cost carriers stimulates traffic and allow more people to fly. Tourism in China and intra-Asia travel support a strong demand for single-aisle airplanes, with total deliveries reaching 4,340 through 2033. Tinseth said both the Next-Generation 737-800 and new 737 MAX 8 offer the airline customers the most revenue potential in this segment.

“To compete in the tough long-haul international market, our Chinese customers are focused on evolving new business models, adding new destinations, increasing their capacity and resources,” said Tinseth. “These trends will shape market demand for an airplane lineup that has high efficiency, low operating costs, environmentally progressive technologies and a great passenger experience. We believe Boeing’s comprehensive widebody portfolio is perfectly aligned to meet those needs.”

The Flight Chic Reality-Check

There is no doubt aviation is headed for growth: it’s a highly reliable, efficient, economical and safe form of transport.  We’ll see more aircraft and more people on them.  The key issues to look out for to balance all this optimism will be the economic stability of carriers in Asia.  We’re increasing the number of aircraft, but we’ll also be increasing cabin density, especially in these regions, to make the aircraft pay off.

The question isn’t really whether all these aircraft are needed eventually, but whether they are indeed needed in this time-frame, whether other socio-economic and political factors will support that growth, whether the aviation infrastructure can support that traffic, and how all these aircraft can be delivered by 2033.

It requires a doubling of production capacity over the next twenty years and, while that sounds like a long time frame, it isn’t for this purpose.  The two large manufacturers are already challenged to ramp-up capacity, especially for popular mid-range single-aisle aircraft.

It would no doubt require well-established NextGen infrastructure to manage all these aircraft in the sky, and the current prediction is that NextGen won’t be fully up and running in the states until 2020 in Europe around that time too, and in the rest of the world–who knows.

We should also be cautiously optimistic on these numbers based on how historic predictions have panned out–hindsight is 2020, and in this case that’s very useful.

It’s worth pointing out that the pre-millennium 20 year outlook, published in 1999 by Boeing, stated that the world’s fleet would double in twenty years from 13,670 in 1999 to 31,755 by 2019.  All credit due to Airbus for a more realistic prediction at the time that passenger aircraft in service would increase to 19,170 by 2019.  One of the key reasons for Airbus’ better accuracy on growth was that Airbus predicted a lot of the necessary traffic growth would be covered by greater aircraft capacity and cabin density, rather than by aircraft units.

The results of the GMF flow directly from the assumptions made regarding not just traffic growth but also such operational parameters as speed, aircraft utilisation, load factor and average flight distance. The values of these parameters also provide an excellent “test of reasonableness” of the forecast results.

During the past twenty years the overall values of all these elements have been increasing as route networks have evolved and airlines have responded to global competition. Airbus forecasters predict that during the next twenty years these historical trends will continue, within the constraints of airport and air traffic management capacity. For the GMF passenger airlines, they expect that:

• Average flight distance will increase from 1,370 km in 1999 to 1,414 in 2009 and 1,444 in 2019;
• Average block speed, severely constrained by congestion, will increase from 611 km/h in 1999 to just 616 in 2009 and 620 in 2019;
• Average passenger load factor will increase from 70.3 per cent in 1999 to 72.1 in 2009 and 73.5 in 2019, and
• Aircraft annual utilisation will increase from an average of 3,502 block hours in 1999 to 3,636 in 2009 and 3,736 in 2019.

Given that both Airbus and Boeing are closer in their predictions this time round, I’m more inclined to believe the numbers, but I can’t help noticing that the total number of aircraft predicted for 2033 is very similar to Boeing’s more gung-ho prediction from 1999: 31,755 then and 36,770 now.  Airbus’ prediction now of 31,000 for 2033 is close to Boeing’s prediction from 1999 for 2019, and a nice round number; perhaps it is once again more tempered and achievable.

We should also not forget that there are other aircraft manufacturers, besides A & B.  While Ilyushin is also capable of supplying aircraft to China to meet excess demand, I won’t get into a prediction of how likely that is to happen.  For one thing, I don’t know; and for another China seems focused on sorting out its own needs.

The Commercial Aircraft Corporation of China, Ltd. (COMAC), has been working quietly and determinedly on development and production of its short-to-mid-haul C919 and ARJ21 aircraft.  The company recently announced that it had started structure assembly of the C919 aircraft,and that the ARJ-21-700 had flown to Chengdu Shuangliu Airport for minimum flight crew test.  So, they’re coming along.

Perhaps COMAC will not be able to meet all Chinese demand, and it’s unlikely that COMAC will be overrun by orders from Western airlines trying to acquire those aircraft over the next twenty years, but the next two decades may allow the manufacturer to grow its own manufacturing capacity and take a decent slice of the domestic pie.

Looking forwards twenty years, and coming up with the right answers is a special gift.  My respect goes to all of those who try, my everlasting admiration to those who come pretty close to getting it right.  I prefer to predict the past myself, or at least to base any views about the future on what has already happened–even when my mind turns to Science Fiction.  History is repetitive.  Sadly, PK Dick is not around to ask for a sanity-check on these and all other tech predictions I run into as I work from day to day–wish he were, he always came darned close to right.

In conclusion, I’ll bet on crowded planes, not crowded skies. If I’m wrong, more’s the better.

For aircraft interiors and component manufacturers, especially for seating manufacturers, this is all good news.  There will be a steady growth in demand for new products for many more years to come and all these new aircraft would further accelerate the push for new cabin innovations.  Even if the numbers for aircraft are not quite as high as predicted, if the passenger figures are right then capacity demand will increase–still more seats to sell.

Regardless of who wins the new aircraft predictions gamble for 2014, Airbus is the clear winner in the Best Market Forecast Cover Picture of the Decade Award.  This kid is just precious!