June 14, 2007

Demand boosts Boeing forecast

Boeing raised its 20-year forecast for world jetliner deliveries by 5.2 percent because of demand from Asian and Russian airlines.

Plane makers will deliver about 28,600 jets in the period, compared with the 27,200 Boeing predicted last year. That represents sales of $2.8 trillion, up from the $2.6 trillion forecast in 2006, the company said Wednesday.

Asian carriers will generate 36 percent of aircraft sales as they benefit from deregulation and higher demand driven by cheaper fares, Boeing said. North America will account for 26 percent of total sales, with 25 percent coming from Europe and Russia. Latin America, the Middle East and Africa will make up 13 percent, Boeing said in the report, which has been published for more than 40 years and comes before the Paris Air Show next week.

"The Asia-Pacific region will clearly be the largest aviation market in the world fueled by economies growing at above-average rates," said Randy Tinseth, commercial airplanes marketing vice president, on a conference call from London. "Today, relatively speaking, China is small, but in 20 years, it will be the size of the U.S. market today."

During the 2007 to 2026 period covered by Boeing's forecast, the company and rival Airbus will vie for the lion's share of the $60-billion-a-year commercial plane market. They may face a third competitor within the next 20 years, possibly from China, Boeing Chief Executive Officer James McNerney has said.

Fuel costs are spurring an increase in the number of new planes purchased to retire older ones. Airlines are looking to save money with new fuel-efficient aircraft such as the Boeing 787 Dreamliner and the planned Airbus A350.

Of aircraft being added over the two-decade period, 18,200 will be used for growth and 10,400 to replace aging planes, Boeing's forecast said.

Russian airlines plan to expand their fleets because locally made aircraft from the Soviet era are becoming outdated and are constraining the country's growth, the Transport Ministry said in March.

Tinseth said Russia, as a region, will account for about 1,000 aircraft. This is the first year the Commonwealth of Independent States has been included in the report because data have become more reliable and the market has stabilized, he said.

Russia's top two airlines, Aeroflot and S7 Airlines, are expanding their fleets as air travel is expected to double by 2015. Russian airlines carried 38 million passengers last year, up 8.3 percent from 2005.

The forecast for deliveries of aircraft with more than 400 seats fell to 960 planes from an earlier projection of 990, Boeing said. That category includes passenger and freighter versions of Boeing's 747 and Airbus's new 550-seat A380.

Jumbo airliners fly in and out of large international airports fed by smaller aircraft coming from secondary airports, a so-called hub-and-spoke system. That system is the target market for the A380, which is running two years behind schedule because of faulty wiring design.

Airbus, based in Toulouse, France, in a market forecast published in November said 1,660 jumbo planes will be needed through 2025. That's 73 percent more than Boeing's latest forecast.

Boeing lifted its industry sales projection for single- aisle, 90- to 240-seat planes by 6.7 percent to 17,650 from 16,540 last year. That category includes its 737 and Airbus's A320.

The growth of low-cost carriers resulted in the projection for single-aisle planes being somewhat conservative, Tinseth said. Jumbo-jet projections have been overestimated in past years compared with actual deliveries, he said.

Shipments of twin-aisle, medium-size planes, the industry's most lucrative category, are predicted to total 6,290, up 1 percent from last year's forecast of 6,230. Those jets include such models as Airbus's A330 and A350 and Boeing's 777 and 787.

Worldwide passenger traffic will grow 5 percent a year over the period, according to the Boeing forecast. Air-cargo shipping will increase 6.1 percent annually.

Information from Bloomberg News reporter Emmet Oliver in London is included in this report.

By James Gunsalus and Tracy Alloway, Bloomberg News
The full of this article's can be read on the source at: The Seattle Times Company

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