A Boeing 777X flies over the Boeing Everett factory
David Ryder | Reuters
Due to the coronavirus epidemic, Boeing is predicting a years-long slowdown in travel demand, lowering expectations for demand for new commercial aircraft over the next decade.
The manufacturer on Tuesday forecast that the world’s airlines will need 18,350 aircraft worth 9 92.9 trillion over the next 10 years, down 11% from a year earlier forecast and downbeat forecast after years of strong growth around the world.
Shares of Boeing fell after the report was released, down more than 2% in late-morning trading.
By 2039, Boeing predicts 43,110 new aircraft will be delivered, three-quarters of which are single-island jets, used for short-haul routes. In its annual forecast last year, Boeing estimated the delivery of 44,040 aircraft to customers by 2038.
Airlines around the world are moving away from the web of epidemics and travel restrictions that have ruined bookings. Boeing said the demand for new commercial aircraft will be driven by carriers in the medium term, replacing older, less fuel-efficient aircraft with purchases aimed at growth.
According to a forecast this summer by the International Air Transport Association, a trade group representing many of the world’s airlines, global travel demand will not return to pre-epidemic levels until 2024.
“This industry has faced challenges before, and on a comparative basis this challenge … is big without question,” said Darren Hulst, Vice President of Commercial Marketing at Boeing. He added that the industry has come out of the crisis before and probably will. There will be a boom but this will take many years.
Hulst said international long-distance travel is expected to take longer to recover than short-term, domestic routes echoing previous industry forecasts. One bright spot during the epidemic is air cargo, Hajlet said, citing the grounding of hundreds of passenger jets that have removed capacity from the market.
Another positive note is the defense, which has become increasingly important for Boeing as it endures commercial aviation. Boeing has forecast 6 6.2 trillion for the defense and space sector over the next 10 years, 100 100 billion more than last year’s estimate.
In the first half of 2020, Boeing’s sales fell 26% to .7 28.7 billion. Its defense and space unit generated about 44% of that revenue, compared to 34% of sales in the first six months of 2019.
.
