Boeing is trying to be optimistic about the future of air transport, but even it has to admit that the short-term prospects are looking difficult. In its ‘Commercial Market Outlook 2020-2039’ published on Tuesday (October 6), the Seattle based aeroplane manufacturer predicted lower growth than it had previously expected for air transport demand in general and specifically for airfreight.
Boeing commented, “over the last decade, growth in passenger air travel averaged 6.5% per year, well above the long-term average of 5%”, however, it believes that future traffic growth will average 4% over the next twenty years.
Boeing sounded upbeat whilst talking about “consumer spending driving economic growth in many parts of the world” with emerging market’s “maturation” increasing the consumer spending share of economic activity, but the lower growth figures imply an overhang of capacity in aircraft fleets and lower order books for aircraft.
As for air cargo, the report stated, “over the next 20 years, the air cargo market is forecast to grow at an average annual rate of 4%, led by the robust markets in Asia.” This is still an optimistic prospect, with demand growing faster than global GDP. Boeing sees this growth driven by the above-trend growth from e-commerce and pharmaceuticals.” As Boeing’s Head Vice President of Marketing observed, the cargo fleet is operating at an even higher rate of utilisation than before the crisis, illustrating the utility of air cargo. Slightly surprisingly the report does not explore in detail the impact of the transformation of retail activity over the past 6 months, with companies such as Amazon aggressively entering the airfreight market, so possibly the picture here may be brighter than Boeing realise.
Despite Boeing’s optimistic tone, the underlying numbers do describe a much more difficult economic environment. The basic message is that the “20-year global forecast for commercial aviation services is $9 trillion. This is a reduction of nearly 10% from last year’s forecast and largely observed over the first five years”. That said, twenty years is a long time and growth will be driven by underlying economic realities rather than a short-term crisis.
Source: Transport Intelligence, October 8, 2020
Author: Thomas Cullen
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