Boeing Co. expects the aviation sector worldwide to enjoy more growth over the next 20 years despite investors’ short-term concerns over Brexit, volatile markets, and economic malaise in Europe, China, Brazil and elsewhere.
“Despite recent events that have impacted the financial markets, the aviation sector will continue to see long-term growth with the commercial fleet doubling in size,” said Randy Tinseth, vice president of Marketing, Boeing Commercial Airplanes in a press release Monday. “We expect to see passenger traffic grow 4.8% a year over the next two decades.”
Boeing, which made the announcement on the first day of the British 2016 Farnborough International Airshow, said over the next twenty years there will be demand for 39,620 airplanes, which is a 4.1% increase from the forecast the company made last year. Boeing is estimating the total value of the new airplanes will be $5.9 trillion. According to the defense contractor, the single-aisle market will see particular strength, lifted by low cost carriers and emerging markets. Boeing anticipates that market segment will need 28,140 new airplanes, which marks an increase of more than 5% compared to last year.
Smaller Jets in Demand
“There’s no question the heart of the single-aisle market is around the new Boeing MAX 8 and the current 737-800. Airplanes that size already account for 76% of the global single-aisle backlog,” said Tinseth.
In the wide body sector of the industry, Boeing estimates the market will need 9,100 airplanes, fueled in part by replacement demand in the 2021 to 2028 period. It is predicting a shift from “very large” airplanes to small and medium wide bodied ones. It’s also predicting the need for 930 new freighters and 1,440 converted freighters.
Boeing wasn’t the only aircraft maker to sound an optimistic noted about the aviation industry on Monday. Airbus Group SE (EADSY) also raised its forecast for the next twenty years with the company predicting 33,070 plans will be delivered with a value of around $5.2 trillion, according to the Wall Street Journal.