That’s not just an idle question. Each year, Airbus, and especially Boeing, gather data on world travel and business, and forecast the numbers of planes that will be needed over the next decades. The market outlook helps shape their financial futures and stock prices—but how realistic are the estimates?
Here’s an example: At last week’s Dubai Air Show, Boeing presented its Current Market Outlook, or CMO for 2017. In that report, Boeing says that airlines in the Middle East will need 3,350 new airplanes over the next 20 year. Boeing argues that the Middle East will see some of the greatest growth because it is within 8 hours flying time of most of the world’s population.
That’s 3,350 new airplanes for three airlines that currently have a combined fleet of just under 600 planes (about 250 for Emirates, 225 for Qatar and 125 for Etihad). So, in Boeing’s view, those three airlines will need to add 2,750 planes in 20 years, or about 140 a year for 20 years.
Keep in mind that the three carriers are all young, and have relatively new flights. That’s growth, mainly, not replacement. And it would result in each airline having a fleets of over 1000 planes apiece. And that’s just for the three Gulf carriers, not counting other airlines that fly through there, or any other airlines.
Air passenger traffic has been growing, and in markets like China and India, it’s been growing at very high rates. But none of those rates can last forever. For the world as a whole, Boeing’s 20-year forecast is for 41,300 new planes, many of them fleet replacements for older planes in use around the world.
Significantly, Boeing and Airbus between them build about 90 planes a month, which adds up to about 22,000 planes over 20 years. While both have plans to add a few more per month, meeting Boeing’s forecast would require a near-doubling of the world’s aircraft production, perhaps leaving room for additional companies such as Bombardier and China’s new industry to find a place—although the two giants seem fearful of letting anyone else in.
So: Are Boeing’s forecasts reasonable and realistic? It doesn’t seem that way to Gumbo…but our crystal-ball app is still a little cloudy!
