Boeing Co. is tempering expectations for commercial aircraft demand in the coming decades, as the prospect of lower global economic growth and uncertainty surrounding Russia pressure jet deliveries.

Manufacturers will hand over 41,170 new planes to customers through 2041, Boeing predicted in its latest long-term outlook for the commercial market. That would mark a slower pace than it saw a year ago, when the planemaker said there would be 43,610 deliveries in the 20-year period through 2040. Boeing also trimmed its forecast for annual passenger traffic growth to 3.8% from 4%.

The softened outlook highlights how geopolitical and economic turmoil could have lasting effects in commercial aerospace. Boeing rival Airbus SE similarly eased its expectations for passenger demand over the next two decades, citing rising energy costs. Boeing also expects a lower rate of global economic growth through 2041 than it did last year, which also translates into less demand for new jets, said Darren Hulst, Boeing’s vice president of commercial marketing.

The US planemaker’s latest forecast excludes any future potential deliveries to buyers in Russia, which is effectively shut out from the global aerospace market due to sweeping sanctions imposed by the US and other nations following its invasion of Ukraine. Boeing last year expected Russian customers to account for more than 1,500 jet sales over the next two decades.

“It’s not an addressable market for us,” Hulst told reporters ahead of the outlook’s release.

Despite the broad worries, demand for cargo jets remains strong, with the global fleet expected to grow to 3,610 planes from 2,010 in 2019.

New jet sales are also expected to be solid over the next decade as airlines expand their fleets to capture still-rebounding demand for air travel after the pandemic. Boeing said airlines will need 19,575 new airplanes through 2031, compared with 19,330 it projected last year to be delivered through 2030.

“There’s a tremendous amount of runway left for the industry just to get back to where it would normally be in a steady state environment,” Hulst said.

Source:
courtesy of BLOOMBERG

by Ryan Beene

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