The Asia Pacific market will lead strong passenger growth around the world over the next 20 years, giving Boeing and its rivals with a market for 11,450 airplanes valued at $1.5 trillion. This was the latest assessment of Boeing Commercial Airplanes vice president of marketing Randy Tinseth during a media briefing on eve of this year’s Singapore Airshow
“Asia Pacific is such a strong and dynamic market [and] in 2012 we’ll continue to see resilient passenger traffic growth levels above the forecasted world average,” he predicted.
Tinseth said that airline growth would account for 80 percent of all the demand in the Asia Pacific region, in sharp contrast to conditions in North America and Europe, where fleet-replacement needs drive much more of the demand. He singled out low-cost carriers (LCCs) in the region as representing one of the most important segments, resulting in a reliance on single-aisle airplanes in the category of the re-engined Boeing 737, known as the 737MAX, scheduled for market introduction in 2017.
“We’re making solid progress on the 737MAX,” said Tinseth. “We’ll start wind-tunnel testing next week, which is a major design milestone.”
Now holding firm orders for 250 airplanes and “commitments” for more than 750, Boeing expects to convert many, if not most, of those still-unconfirmed orders this year. “2012 will be the year of the MAX,” he quipped.
With LCCs now accounting for 12 percent of the market in the Asia Pacific region, they will come to achieve a 16-percent share within 10 years, said Tinseth. Ten years ago they held a negligible share of the market in this region.
The BCA executive talked of a “strong” 2010 and a “challenging” 2011, due largely to natural disasters and high fuel prices. Still, passenger traffic increased by between 5 and 6 percent, while cargo volumes remained largely flat.
Boeing itself enjoyed a banner sales year, registering net firm orders for some 800 airplanes while delivering 477. Its backlog now stands at 3,771.
Tinseth noted Boeing’s 20-year projections for global GDP growth of 3.3 percent per year, a 4.2-percent annual passenger traffic increase, 5.1 percent growth in revenue passenger miles per year and a 5.6-percent annual cargo traffic increase.
As a result, according to Boeing, airlines around the world will need 33,500 new airplanes, valued at $4 trillion. Meanwhile, Asia Pacific carriers will need 11,450 new airplanes valued at $1.5 trillion, making it the biggest market in the world.
Noting that 25 percent of the projected demand already resides in existing backlogs, Tinseth expressed confidence that Boeing’s forecast will not prove overly optimistic.