Demand for Single-Aisle Jets Continues to Set Pace as Boeing, Airbus Issue Upbeat 20-Year Forecasts
Thursday, September 20, 2018
Aerospace giants Boeing and Airbus, in separate digital presentations on their respective websites and online postings, have issued robust 20-year forecasts for the global commercial aerospace market, with trends moving “onward and upward” that should yield significant business opportunities for the titanium industry. The upbeat message—similar to other forecasts issued by the two companies in recent years—continues to underline the strong, projected demand for single-aisle aircraft in the years ahead.
Representatives from the two aerospace original equipment manufacturers (OEMs) will provide additional information at TITANIUM USA 2018 conference and exhibition, which will be held Oct. 7-10 at the Bellagio hotel and casino in Las Vegas.
Chicago-based Boeing Co. anticipates that demand in the commercial market is expected to more than double during the next two decades. “To meet this demand, we forecast the number of jet airplanes will nearly double to 48,000, at an average annual growth rate of 3.5 percent,” Boeing wrote in its forecast statement. As such, Boeing sees a need for more than 42,700 new commercial jet deliveries for the global market, valued at over $6 trillion, for “growth and replacement” in the next 20 years.
Single-aisle airplanes will command the largest share of new deliveries at more than 70 percent, with airlines needing more than 31,300 in the next 20 years, according to Boeing. “These new airplanes will continue to stimulate growth and provide required replacements for older, less-efficient airplanes. In addition, more than 9,000 new wide-body airplanes will be delivered, allowing airlines to serve new markets—passenger and cargo—more efficiently than in the past.
“Consistent with air travel demand growth trends, we forecast that by 2037, approximately 40 percent of all new airplanes will be delivered to airlines based in the Asia region,” the Boeing report continued. “An additional 40 percent will be delivered to airlines in Europe and North America combined, with the remaining 20 percent delivered to the Middle East, Latin America, Russia and Central Asia, and Africa.”
In a similar projection, Airbus, headquartered in Toulouse, France, expects the world fleet of commercial aircraft will reach nearly 48,000 planes during the next 20 years, which includes a growth in new planes at 26,540 jets, and 10,850 jets to replace existing, aging aircraft. All told, Airbus, in its global market forecast report (2018-2037), anticipates that 37,400 aircraft will be required during the next 20 years, representing an estimated value of $5.8 trillion.
However, along with the lofty 20-year forecasts, it’s been reported by Reuters and other media outlets that the two aerospace giants recently have experienced some difficulties in keeping pace with the surging demand for commercial jets due to engine shortages. An article in the July 16 edition of The Wall Street Journal reported that “Airbus has missed a number of delivery deadlines,” especially for its new A321neo single-aisle jet. “Boeing hasn’t missed any deliveries, but is straining with the same supplier shortfalls as Airbus, particularly when it comes to engines.”
The Wall Street Journal report came at the start of this year’s Farnsborough Airshow in the United Kingdome and included interviews with Boeing Chief Executive Dennis Muilenburg and Airbus Chief Executive Tom Enders. The July 16 Journal article stated that
Boeing, the No. 1 plane maker by deliveries, and No. 2 Airbus are on track this year to deliver more than 1,600 airliners in total, more than double the figure produced in 2000, and both are expected to add hundreds more to their backlogs (this week at the Farnborough Air Show). The plane makers have been struggling for years under the surge, and have spent heavily reviewing and retooling supply lines. The record production pace is due in part to surging demand for flights. This year is poised to be the ninth in a row of growth in passenger demand. The International Air Transport Association, an industry lobby group, forecasts planes will carry 4.4 billion passengers this year, compared with 2.7 billion in 2010. Amid higher oil prices, airlines are also eager to update their fleets to more efficient planes that burn less gas. Suppliers to Boeing and Airbus have struggled to keep up. Engine-production delays have been among the most painful. At one point this year, Airbus had more than 100 nearly finished planes waiting on the tarmac for their engines. In the first six months, the company delivered 303 jetliners against a full-year target of 800 deliveries, mostly because of late engines.
Nicole Lecca, the Airbus senior vice president of materials and parts procurement and the chair of the Airbus material board, served as the distinguished guest speaker at the first TITANIUM ASIA 2018 conference and exhibition, which was held Feb. 4-5 at the Grand Hyatt Singapore. Lecca recapped Airbus’ 2017 performance, noting that there were 718 deliveries of jets, with a backlog of 7,265 planes. She said each day the Airbus global supply chain consumes 50 metric tons of titanium, and that 35 percent of Airbus’ 2017 deliveries went to the Asian market, compared with 16 percent for North America and 13 percent for Europe. According to Lecca, aerospace industry titanium demand for the foreseeable future will be driven by the growing adoption of carbon fiber reinforced polymer (CFRP) manufacturing for airframes and novel designs for pylons—structural components used to hold jet engines in place.
Boeing, in its outlook, observed that single-aisle airplanes comprise 69 percent of the current global passenger jet fleet, and that this share will increase over the next 20 years to nearly 75 percent—more than 33,500 passenger airplanes. Boeing noted that “strong replacement needs in more mature aviation markets and robust overall growth in emerging markets are driving increased demand for single-aisle jets.”
Starting in 2010, as the world began its recovery from the global financial crisis, Boeing said that revenue passenger kilometers (RPK) have increased. “Our forecast traffic growth remains healthy, with an average RPK growth rate of 4.7 percent per year over 20 years. Like the global economy, world traffic varies by market. In the next two decades, fast growth in China’s domestic market will make it the largest domestic market in the world and traffic within Asia is set to become the largest travel market. The central location of the Middle East airlines allows them to link many parts of the world with one-stop flights, which will help drive higher-than-average growth on those routes. In the more mature aviation markets such as North America and Europe, while domestic growth rates are below the global average, increasing connections to faster-growing emerging markets provides more opportunities for growth. These differing growth profiles result in an increasingly diverse global air travel market.”
MarketWatch, in an online report dated April 25, said that Boeing expects to have a new facility in China ready for work on its 737 jets by the end of this year. MarketWatch quoted Boeing’s Muilenburg who indicated that construction is under way on a “finishing center” near Shanghai, which will install seats and other features such as in-flight entertainment systems. China accounts for a fifth of Boeing’s global jetliner deliveries, according to the report. Boeing will continue assembling 737s at its plant near Seattle, but plans to send some planes to China for completion at the new Shanghai finished center, which is an alliance between Boeing the state-controlled Commercial Aircraft Corp. of China Ltd.
Airbus is ramping up efforts to position itself to further expand its business in the soaring Chinese aerospace market. According to a company press release, Airbus first established an official presence in China in 1994 and aims to deliver its 2,000th commercial jetliner by 2020. As part of this expanding business framework, an Airbus A330 Completion and Delivery Center (C&DC) in Tianjin was inaugurated in 2017. The C&DC, co-located at the same site as the A320 Family’s Final Assembly Line and the Airbus Tianjin Delivery Center, is Airbus’ first wide-body center outside of Europe. The facility performs A330 “completion activities” that include cabin installation, aircraft painting, production flight tests, customer acceptance and aircraft deliveries.
By late 2017, there were more than 1,500 Airbus commercial jetliners in service in China, and deliveries to the country represent nearly a quarter of Airbus’ total jetliner production. It’s estimated that Airbus and its joint ventures have 1,900 employees in China producing commercial aircraft in multiple locations across the country.
As reported in an Airbus press release dated Aug. 8, Air China received delivery of its first A350-900, which is powered by Rolls-Royce Trent XWB engines. The national flag carrier is the first Chinese mainland customer to order and take ownership of the twin-engine wide body aircraft. The airline initially will operate the new aircraft on its domestic routes, followed by flights to international destinations. The Airbus A350 XWB is a new family of mid-size, wide-body, long-haul jets, featuring carbon fiber fuselage and wings. Airbus reported that, as of July 2018, Air China operates an Airbus fleet of 201 aircraft, including 142 A320 family aircraft and 59 A330 family aircraft.
Three years ago Airbus opened its A320 family jetliner assembly installation in Mobile, AL, known as the “Airbus U.S. Manufacturing Facility.” An online news item posted Feb. 21 by the website “Made in Alabama” said that the plant is “in line for 600 new jobs, thanks to a planned second assembly line for the Bombardier C Series jetliner and a possible increase in the production of A320 family aircraft,” with a capital investment of $300 million. According to press reports, Airbus and Bombardier, on July 1, finalized a joint venture deal known as the C Series Aircraft Limited Partnership.
The New York Times, in a story filed July 5, reported that Boeing “planned to take over the commercial jet business of the Brazilian aerospace company Embraer, a move into smaller jetliners that mirrors a deal last fall by rival Airbus to join in a partnership with Bombardier.” The deal, as indicated in the Times article, would involve Boeing owning 80 percent of Embraer’s commercial aircraft and services arm. “Under the memorandum of understanding announced by both companies, management would be based in Brazil, but the venture will be controlled by Boeing. The companies also said that they would form another joint venture focused on new markets and applications for defense products and services, such as Embraer’s KC-390 military transport plane.”