Press Release
Contact: Raymond Jaworowski, Senior Aerospace Analyst
Phone: (203) 426-0800
Web site: www.forecastinternational.com
E-mail: ray.jaworowski@forecast1.com
Forecast International, Inc.
22 Commerce Rd. Newtown, CT 06470 USA
FOR IMMEDIATE RELEASE
Large Airliner Market to Exceed One Trillion Dollars
FARNBOROUGH, U.K. [July 15, 2008] — Forecast International predicts that during the next 10 years, a total of 10,245 large commercial jet transports will be produced. The Connecticut-based market research firm estimates the value of this anticipated production at more than $1.2 trillion in constant 2008 U.S. dollars. As can be expected, Airbus and Boeing are projected to dominate the market, with the two manufacturers accounting for nearly 99 percent of the forecast production.
Forecast International projects that Boeing will build 5,444 large commercial transports from 2008 through 2017, while Airbus will produce 4,684 in the same time period. The two companies will battle tooth-and-nail in the narrowbody airliner segment of the market, essentially dividing that segment nearly in half.
In the widebody portion of the market, though, Boeing will have an advantage. Production of Boeing’s 777 series is expected to continue at a robust pace and, once it enters service, the new Boeing 787 will undergo a steady production ramp-up. Even with recent program delays, the 787 still enjoys a timetable advantage over its direct competitor, the Airbus A350 XWB, and is scheduled to enter service some four years ahead of its Airbus rival.
The game will change, though, with service entry of the A350 XWB, currently scheduled for mid-2013. Airbus widebody production will accelerate rapidly once the XWB enters service. The XWB is already causing some headaches at Boeing.
“With the A350 XWB competitively positioned against both the 787 and the 777, the new Airbus aircraft is forcing Boeing to take another look at product strategy,” said Forecast International senior aerospace analyst Raymond Jaworowski. A Boeing response to the XWB could take the form of a stretched version of the 787 (known as the 787-10), and possibly a new member of the 777 series.
A bigger contest looms in the narrowbody segment of the airliner market. All of the present maneuvering in the widebody sector should not obscure the fact that the next big Airbus/Boeing battle between all-new products will be between new designs to replace the two companies’ existing A320 and 737 series narrowbody airliners.
Amidst continuing strong sales of their current single-aisle products, neither Airbus nor Boeing is in any real hurry to launch a new narrowbody family. Both companies have slipped the projected service entry dates of such aircraft almost to 2020. However, as Jaworowski notes, “Once either Airbus or Boeing launches a new narrowbody series, the other will have no choice but to quickly respond in kind.”
The 2008-2017 period will thus be a critical time for Airbus and Boeing. According to Jaworowski, “In many ways, the next 10 years will be a time of transition for Airbus and Boeing. Both companies are in the midst of consolidating their product lines while, at the same time, they are scrambling to get important new mid-sized airliners into service. Both will also be formally launching all-new narrowbody airliner families.”
In devising their product strategies, Airbus and Boeing are attempting to respond to the changing needs of the world’s airlines. The airline industry finally regained net profitability in 2007, the first year since 2000 that the industry had posted a net profit. North American carriers led the way during the year, posting higher profits than carriers in any other geographic region. This feat was all the more noteworthy as, in the previous three years, the financial results of North American airlines had lagged well behind those of their European and Asian counterparts.
Already, though, the airline recovery may be starting to stall. Air traffic growth is slowing as economic uncertainty dampens passenger demand, and profits will likely be down somewhat in 2008. Meanwhile, Airbus and Boeing are continuing to ramp up delivery rates, leading to widespread concerns about excess capacity in airline fleets.
Additional information is available in Forecast International’s “The Market for Large Commercial Aircraft” analysis (sales@forecast1.com).
Forecast International, Inc., is a leading provider of Market Intelligence and Analysis in the areas of aerospace, defense, power systems and military electronics. Based in Newtown, Conn., USA, Forecast International specializes in long-range industry forecasts and market assessments used by strategic planners, marketing professionals, military organizations, and governments worldwide. To arrange an interview with Forecast International’s editors, please contact Ray Peterson, Vice President, Research & Editorial Services (203-426-0800, ray.peterson@forecast1.com).
