Sector shows its strength, increasing value from $8.1tn in one year
Boeing says the aerospace and defence market is in robust health, with a strong commercial aviation industry, stable defence spending and the need to service all platforms throughout their lifecycle.
The Boeing Market Outlook (BMO), released at the Paris Air Show, values the aerospace and defence market at $8.7 trillion over the next decade, up from $8.1 trillion a year ago.
$3.1tn demand for commercial aircraft
The Outlook (BMO) forecasts a $3.1 trillion projected demand for commercial aircraft through to 2028 as operators replace older jets with more capable and fuel-efficient models, and expand their fleets to accommodate the steady rise in air travel across emerging and established markets.
The BMO also projects $2.5 trillion of defence and space opportunities during the next decade as governments modernise military platforms and systems, pursue new technologies and capabilities and accelerate exploration from sea to space. This projected spending spans military aircraft, autonomous systems, satellites, spacecraft and other products. The BMO notes that spending will continue to be spread across the globe with 40 per cent of expenditure expected to originate outside of the United States.
Lifecycle solutions supporting defence, space and commercial platforms will fuel a services market valued at $3.1 trillion through 2028, according to the forecast. Boeing chief financial officer and executive vice president of Enterprise Performance & Strategy, Greg Smith, said: “Aerospace and defence continues to be a healthy and growing industry over the long term, boosted by strong fundamentals across the commercial, defence and services sectors and demand that is geographically-diverse and more balanced between replacement and growth than ever before.”
Commercial fleet to double over next decade
Boeing also unveiled its 2019 Commercial Market Outlook (CMO) at the Paris Air Show, a longer-term forecast which analyses the market for commercial aircraft and services. The newest CMO shows growing passenger volumes and increasing aircraft retirements will drive the need for 44,040 new jets, valued at $6.8 trillion over the next two decades and up 3 per cent from a year ago. The global commercial fleet will also sustain the need for aviation services valued at $9.1 trillion, leading to a total commercial market opportunity of $16 trillion through 2038.
Boeing Commercial Marketing vice president Randy Tinseth said: “Time and again, commercial aviation has shown itself to be extremely resilient. Notwithstanding some recent moderation in passenger and cargo traffic growth, all indications are pointing to our industry sustaining its unprecedented streak of profitable expansion. In fact, we see a market that is broader, deeper and more balanced than we have seen in the past. The healthy market fundamentals will fuel a doubling of the commercial fleet over the next two decades and a massive ecosystem of lifecycle solutions to maintain and support it.”
Commercial fleet to top 50k mark
Forecasters predict 44 per cent of new aircraft deliveries will go toward replacing ageing aircraft while the remainder will accommodate traffic growth. Passenger traffic is set to grow an average 4.6 per cent and cargo traffic an average of 4.2 per cent. Factoring in the new aircraft and the jets that would remain in service, the Outlook forecasts that the global commercial fleet is expected to reach 50,660 aircraft by 2038 – the first time the projected fleet has broken the 50,000 mark.
The largest aircraft segment remains single-aisles such as the 737 MAX, with operators projected to demand 32,420 new aircraft. This $3.8 trillion market is driven largely by the continued strength of low-cost carriers, healthy replacement demand and continuing growth in Asia Pacific.
In the widebody segment, Boeing forecasts demand for 8,340 new passenger aircraft valued at more than $2.6 trillion over the next twenty years. Widebody demand is spearheaded in part by a significant wave of older aircraft which will need to be replaced in the next few years. Bolstering the demand for larger aircraft, operators are expected to need 1,040 new large production freighters over the forecast period.