Boeing and Airbus Remain Bullish - 7/27/16
Despite economic risks presented by slowing growth in China, recessions in Brazil and Russia, and the recent British decision to leave the European Union, Airbus and Boeing, the world’s largest planemakers, continue to remain bullish. As reported by Reuters, rising air travel and demand for new fuel efficient planes raised the industry’s order backlog to a record thirteen thousand five hundred planes by the end of last year.
That translates into nearly ten years of production at current rates. Boeing forecasts that airlines will collectively need nearly forty thousand new aircraft worth approximately six trillion dollars over the next twenty years, up four percent from its estimate last year.
The company also forecast that airline passenger traffic will increase by four point eight percent per year over the next two decades. Airbus has also raised its twenty-year demand forecast and also expects global passenger traffic to grow by more than four percent per annum.
Both Airbus and Boeing indicate that demand for single aisle jets as opposed to twin aisled planes or four engine superjumbos were being the increases in their respective twenty year forecasts. Growth will be largely driven by expanding middle classes in emerging markets, including in both China and India.