Boeing Increases Forecast For Jet Demand

By Michael Mecham
Source: AWIN First

Slow sales for Bombardier’s CSeries, the most serious new entrant in the 110-150-seat market, bears this out, Tinseth says. For its part, Bombardier says it is “guardedly optimistic” that more orders will be announced next week at the Paris air show as the company awaits the new family’s first test flight in late June.

Rising airline profitability is evidence that “our customers have been managing their fleets very, very well,” Tinseth says. Aside from the winter months when demand is traditionally weak, global load factors were comfortably in the 80-85% range in 2012. At its recent annual meeting, the International Air Transport Association confirmed that average load factors are growing and are now better than 80%. Last year they averaged 78%.

Not all sectors are performing so well. “We’ve been concerned about the growth rate for cargo aircraft for a long time,” Tinseth says. At 5%, this year’s forecast is slightly less optimistic than last year’s, which was for 5.1% annual growth. The current expectation is that 850 freighters will be ordered over the next two decades, 75% of them as big as a 777F or larger.

There is no demand for new smaller freighters although there will be a market for 767 converted freighters. The fact that 747-400s are being parked for lack of demand is not an indication that the fundamentals of air freight have changed, only that markets are slow, notes Tinseth.

As usual, Boeing factors in global GDP data in arriving at its expectations. Average annual GDP growth is set at 3.2%, the same as last year. But the annual average growth rate for passengers is much higher and up a full point from last year at 5%. “The reason why air travel grows faster than GDP is because it’s a bigger bargain,” says Mike Bair, BCA’s vice president of marketing and business development.

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