Boeing forecasts US$8.7 trillion aerospace and defence market through 2028

Boeing forecasts US$8.7 trillion aerospace and defence market through 2028

Troubled US plane maker Boeing released its latest market forecast for the aerospace and defence sectors and said the combined market is valued at US$8.7 trillion through 2028, up from the US$8.1 trillion is forecast a year ago. The company said the commercial sector alone would account for US$3.1 trillion for commercial airplanes through 2028 as operators replace older jets in their fleets and expand those fleets to accommodate the steady rise in air travel across emerging and established markets. “Supporting the defence, space and commercial platforms with lifecycle solutions will fuel a services market valued at US$3.1 trillion through 2028,” Boeing 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,” said Boeing’s chief financial officer and executive vice president of Enterprise Performance & Strategy, Greg Smith.

Boeing said in its closely followed Commercial Market Outlook (CMO), that growing passenger volumes and increasing airplane retirements will drive the need for 44,040 new jets, valued at US$6.8 trillion over the next two decades and up 3 percent from a year ago. The global commercial airplane fleet will also sustain the need for aviation services valued at US$9.1 trillion, leading to a total commercial market opportunity of US$16 trillion through 2038.

“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,” said Boeing’s commercial marketing vice president Randy Tinseth. “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.”

Of the new airplane deliveries, forecasters say 44 percent will go toward replacing aging aircraft while the rest will accommodate traffic growth. Together, the new jets support an industry where passenger traffic will grow an average 4.6 percent and cargo traffic will grow an average 4.2 percent. Factoring in the new airplanes and the jets that would remain in service, the global commercial fleet is expected to reach 50,660 airplanes by 2038. This is the first time the projected fleet has crested the 50,000 mark.

The biggest airplane segment remains single-aisles such as the 737 MAX, which has been grounded over safety concerns, as operators are projected to demand 32,420 new airplanes. This US$3.8 trillion market is driven in large part 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 airplanes valued at more than US$2.6 trillion over the next 20 years.