American planemaker Boeing said Thursday (25 February) that airlines in Southeast Asia will need 4,400 new airplanes valued at US$700 billion to support expanding demand for air travel over the next 20 years. The intra-Southeast Asian market will become the fifth-largest in the world by 2039 and the vast domestic and regional air-travel network across the region positions it well for a post-pandemic recovery.
Darren Hulst, vice president for commercial marketing at Boeing, said the outlook for the region was positive because countries like Indonesia will help drive passenger growth because the country’s geography dictates that air travel be used and said global hubs like Singapore will help drive growth as well because of the city-state’s aviation infrastructure provides deep connections to the region. The region is expected to require 183,000 more commercial pilots, cabin crew members and aviation technicians over the forecast period.
“Southeast Asia will not be a replacement market because it still will have a tremendous amount of traffic” once borders are opened, Hulst told reporters on a conference call. Hulst said Southeast Asia was one of the top economic regions and came in at third behind India in the top spot and China is second place in expected GDP growth.
Hulst said air travel in Southeast Asia should grow 5.7 percent over the next 20 years and said five of the top 10 countries for air travel growth are located in Southeast Asia.
Boeing projects the region’s commercial airplane fleet will grow 5.3 percent annually over the next 20 years. In addition, demand for aftermarket commercial services – valued at US$790 billion – will help maintain the fleet over the same period.
“Southeast Asia’s fundamental growth drivers remain robust. With an expanding middle-class and growth in private consumption, the region’s economy has grown by nearly 70 percent over the last decade, which increases propensity to travel,” Hulst said. “In addition, governments in the region continue to recognise the travel and tourism sectors as important drivers of economic growth.”
Hulst said the world has “never seen the likes of, in terms of commercial aviation, a year like 2020. Traffic was down by by two-thirds compared to 2019.” Hulst said on a global basis about 30 percent of the world’s airplanes are still in storage. He added that “shocks accelerate retirements and replacements”, saying in “average” times around 2-3 percent of the world’s fleet would be replaced, but following the 2008 financial crisis that figure rose to 4 percent and following 9/11 and SARS the figure was around 4-5 percent.
Overall, Boeing forecasts regional demand for 760 new widebodies by 2039, adding while the long-haul market recovery is expected to take longer, Southeast Asia’s twin-aisle fleet is slated to grow by 55 percent to 780 widebodies by 2039.
Globally, Boeing projects the need for 43,110 new commercial airplanes and the demand for aftermarket services to be equivalent to US$9 trillion over the next two decades. World air cargo traffic is projected to grow 4 percent annually due to solid industrial production and world trade. Freighters will remain the backbone of the cargo industry with the need for 930 new and 1,500 converted freighters during the same span.