Boeing and Airbus deliver market outlooks

Putting an end to recent industry speculation about a restart of 757 production, Randy Tinseth, Boeing’s vice president marketing, said, “We’ve looked at it, and the business case doesn’t come close. We’re not studying [a] 757 re-engined replacement right now. It just doesn’t work.” 
Tinseth’s comments came in response to audience questions during his “Market Outlook” presentation at the Pacific Northwest Aerospace Alliance (PNAA) conference in Lynnwood, Wash. “It isn’t an option to resurrect the line, and put on new engines. [The 757] had a unique production system, and was relatively expensive to build, compared to the 737,” he added.
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Tinseth did acknowledge that Boeing is studying the “middle of the market” to meet the needs of airlines looking for a jetliner that’s sized between the 737 and Airbus A320 single-aisles, and the 787-8 and Airbus A330 wide-bodies. He describes the segment as an “unexplored place.” He added, “airlines want an airplane that’s bigger than the 757, and flies further. We’re working on it, but there’s lots in the hopper.” 
Boeing certainly does have a lot in the hopper, with an order backlog of close to 5,800 aircraft.
Tinseth shared Boeing’s Current Market Outlook report that the company has published since 1961. Boeing uses the forecast to develop its product strategy and long-term plan. Looking both at historical data, and forecasting out for 20 years, Tinseth observed that airlines have been very resilient over the past 30 to 35 years, and managed to grow in spite of recessions and special challenges. That trend will continue. “We expect that the number of people flying will grow by 4.1 per cent per year,” he said.
Despite growing passenger numbers, Tinseth doesn’t expect thousands of wide-body aircraft in the 747-8 or A380 league to be ordered by airlines wanting to meet the increased demand. “It’s very simple – as the market grows, airlines accommodate this growth with more flights to more places, rather than with larger and larger airplanes,” Tinseth explained. He said that the 787 has successfully taken advantage of that trend, with more frequent, non-stop service between new city pairs.
The overall numbers are staggering. Boeing estimates that over the next 20 years, airlines will need over 36,000 new aircraft, worth an estimated $5.2 trillion. By 2033, the number of planes in the worldwide fleet will more than double, to over 42,000 aircraft. Tinseth said that the largest market will be Asia-Pacific, followed by North America and Europe. Looking at 2014 data, Tinseth said, “Clearly, it was a great year for us, [and] it was a fantastic year for our customers.”
Simon Pickup, strategic marketing director for Airbus Americas, echoed Tinseth, with a similar market outlook analysis. “Traffic, revenue, and profits were all up in 2014. The airline trade industry, IATA, in their 2015 forecast, says the industry as a whole will make $25 billion in profits, with North America making up over half. These carriers are doing a lot of things right, and they’re reaping the rewards. Of course, one of the things they’re doing right is buying new airplanes,” said Pickup.
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Airbus differs in its 20-year forecast for new aircraft, being somewhat less optimistic at over 31,000 new planes—5,000 less than Boeing. However, they are far more bullish on the outlook for their largest aircraft, the A380. Pickup says that 1,501 very large aircraft of the A380/747-8 class will be sold, double Boeing’s forecast of 620 planes. Pickup said that 90 per cent of long-haul traffic is on routes serving 42 cities, growing to 91 cities in 20 years. He describes these markets as “aviation megacities,” with more than 10,000 long-haul passengers per day, and believes that’s where the A380 “really shines.”
Airbus recently addressed the 757 replacement market, by introducing the A321LR. The re-engined plane will have additional fuel tanks, giving it a 4,000 nautical mile range with a payload of 200 passengers. “It will do some of the things that the 757 used to do,” said Pickup.

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