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Boeing lifts 20-year jet delivery forecast by 2.8pc

CHICAGO - Boeing Co. raised its 20-year forecast for world commercial jetliner deliveries by 2.8 per cent as carriers struggling with soaring oil prices upgrade their fleets with more fuel-efficient models and global air travel increases.

Planemakers will deliver about 29,400 jetliners in the period, compared with the 28,600 predicted a year ago, Boeing said in a statement yesterday as the industry gathers for the Farnborough Air Show next week outside London. The forecast represents sales of $3.2 trillion, up from $2.8 trillion forecast in 2007, said Boeing, the world’s second-largest planemaker.

North American carriers are cutting more than 19,000 jobs and parking 400 jets to blunt an 87 per cent surge in crude-oil prices in the past year. The higher fuel costs will push up demand for replacement planes, which will make up 43 per cent of the total, even as a 5 per cent annual increase in air travel spurs fleet expansion, Boeing said.

“Long-term, you have to assume that the emerging countries of Brazil, China, India and Russia are going to continue to grow as a larger percentage of the world’s fleet, and they’re growing at a faster rate,” said Peter Arment, Greenwich, Connecticut- based analyst with American Technology Research.

Orders from Asian airlines will account for 31 per cent of the deliveries, with carriers from North America making up 29 per cent and 27 per cent coming from Europe and Russia, Randy Tinseth, the marketing chief for Boeing Commercial Airplanes, said at a London press briefing. Latin American carriers will order 6 per cent of the total and Middle Eastern airlines 5 per cent.

Older Planes

Boeing had said last year that replacement planes would make up 36 per cent of the total - a smaller portion than forecast today. Carriers are retiring their ageing MD-80s, 737s and Airbus SAS A320s earlier than expected because of the jump in oil prices, Tinseth said.

Airlines will start switching to slightly larger and more fuel-efficient single-aisle planes, such as newer versions of the 737s and A320s, from regional aircraft used now, Tinseth said, predicting sales of 19,160 single-aisle jets. The switch will produce a smaller total fleet, at 35,800 planes rather than the 36,400 projected last year. That compares with 19,000 aircraft flying worldwide now. The forecast for deliveries of aircraft with more than 400 seats rose to 980 planes from an earlier projection of 960. That category includes passenger and freighter versions of Boeing’s 747 and Airbus’s new 550-seat A380.

Fuel Prices

The industry is “extremely resilient,” and airlines will “remake themselves” to absorb the higher energy bills, which will eventually drop, Tinseth said.

“We assume that fuel over the near term will continue to be high and volatile and then at some point in the future supply and demand should align,” he said.

Airbus, a unit of European Aeronautic, Defence & Space Co., said in February it expects airlines to buy 24,300 planes worth $2.8 trillion during the next 20 years. Around 1,300 very large passenger aircraft will be needed to link hub cities, Airbus said then.

Boeing’s projection for a 2.8 per cent increase compares with a 5.2 per cent increase forecast last year and a 5.8 per cent jump predicted in 2006.

That makes the forecast “a little bit below the historical increase, but that’s not a surprise given the macro backdrop of where fuel prices are,” Arment said. Boeing’s report has been published for more than 40 years. Boeing climbed 64 cents to $66.56 at 2:27 p.m. in New York Stock Exchange trading. The stock had declined 25 per cent this year before today.