Jetrader - Fall 2014 - 29

of the market" (see Chart 1: 737-800 Size Single-Aisles are "Heart
of the Market") hovering around airplanes of the 150- to 170-passenger size.
"There's no question the market is converging to this size,
where network flexibility and cost efficiency meet. The NextGeneration 737-800 and new 737 MAX 8 offer our customers the
most revenue potential in this mid-sized space," Tinseth said.
Darren Hulst, who leads Boeing's CMO team, explains passenger
appeal is the driving force behind the single-aisle explosion.
"These aircraft give airlines the flexibility to serve multiple
markets with very efficient seat-mile costs, the range capability to
fly to new markets and flexibility to fly more frequencies," Hulst
told Jetrader. "It's all about serving passengers more efficiently,
and that aircraft size, combined with its design efficiency, is
optimal for that flexibility."
As for the widebody marketplace, the manufacturer forecasts
that 8,600 new twin-aisle airplanes will be needed, led by small
widebody airplanes in the 200- to 300-seat range, such as the
787-8 and 787-9 Dreamliner. This year's forecast reflects a continued shift in demand from very large airplanes to efficient new
twin-engine products such as the 787-10 and new 777X.
"With the most comprehensive and capable widebody lineup
in the industry, we're confident that we will meet our customers'
needs now and in the future," Tinseth added.

Chart 1: 737-800 Size Single-Aisles are
"Heart of the Market"

Airplanes like the Boeing 737 Next Generation, 737 MAX and the
Airbus A320 line-up represent about three-quarters of the deliveries
and orders for single-aisle airplanes over the course of Boeing's latest
annual market forecast. (Boeing chart)

Chart 2: Market for New Airplanes to Become Even
More Geographically Balanced

Market Makeup
Boeing forecasts the current industry fleet of close to 21,000
planes to grow to more than 42,000 by the end of the estimate
period. Nearly all of those are anticipated to be passenger jets,
with freighters making up less than 3,000 of the aircraft.
The company's 4 percent increase in aircraft numbers reflects
expected continued 5 percent annual growth in passenger traffic,
and 4.7 percent for the cargo market.
Major drivers continue to be the dynamic evolution of the LCC
segment and more market fragmentation, including additional
direct service and more frequencies. Boeing expects this trend
to continue as airline networks grow, evolve and emerge, and
as LCC penetration increases in regions currently underserved
by that model.
The bulk of new airplanes over the forecast span (58 percent)
will be to meet airline growth needs; the remainder will be for
replacement purposes.
"The replacement share is actually increasing as some of
the emerging markets begin to mature over the 20-year period.
We'll see the first big replacement waves come through in places
like China and Southeast Asia," Hulst said. "That drives a fairly
robust requirement for not only growth but replacement. That's
another reason why we're confident in that aspect of our forecast. Replacement demand is a key foundation of the longterm market."
The latest CMO continues the trend of showing more geographic
balance in terms of the sources for the original equipment manufacturer (OEM) orders (see Chart 2: Market for New Airplanes to
Become Even More Geographically Balanced).
The Asia-Pacific market, including China, will continue to lead
the way in total airplane deliveries over the next two decades
whether talking about single-aisle, twin-aisle or large airplanes.

New airplane deliveries by region

Market value by region

Region

2014-2033

Asia Paciﬁc
Europe

Airplanes

North America
Middle East
Latin America
C.I.S.
Africa

World Total

13,460
7,450
7,550
2,950
2,950
1,330
1,080

36,770

2014-2033

3%
8% 3%
8%
21%

37%

36,770
20%

Asia Paciﬁc
Europe

North America
Middle East
Latin America
C.I.S.
Africa

2,020
1,040

870
640
340
150
140

3%
3%

7%
12%

$5.2T

39%

17%
20%

World Total$5,200B

With airframers holding record backlogs for new airplane deliveries
over the next 20 years, Boeing's latest Current Market Outlook foresees
the global jetliner market to be even more balanced globally than
today's levels. (Boeing chart)

Freighters Carry Long-Term Promise
In terms of the world cargo market, Boeing forecasts a worldwide freighter fleet that'll grow by more than 50 percent (see
Chart 3: Future Freighter Deliveries...) over the two-decade
outlook term despite the current slower cargo market growth.
"We're seeing strength in the standard body, single-aisle conversion market for express uses, and we're also projecting that
about 70 percent of new cargo deliveries will be for large, widebody freighters," Hulst said. "As trade recovers and the market
improves, and comes back to a more normal state, we expect to
see a demand for two to three new freighter aircraft a month."

Accurate If Not Conservative
Like the versions before it, the 2014 CMO reflects a "top-down,
bottoms-up" approach to evaluating world jetliner need.
Jetrader * Fall 2014 29

Jetrader - Fall 2014

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