Boeing (NYSE:BA) now expects deliveries of 18,350 commercial aircraft over the next decade, down 10.7% from its previous forecast, with the coronavirus pandemic expected to create minimal demand for new jets through the next few years.
In its annual market review, the company said it still expects 43,110 commercial aircraft deliveries over the next 20 years, down only slightly from its previous forecast of 44,040, implying that it believes the industry will be able to make up for lost sales in the years that follow the next decade. Boeing enjoys a duopoly with Airbus (OTC:EADSY) in global aircraft production, and the two companies would be expected to soak up much of that demand.
Over the last decade, growth in passenger air travel has averaged 6.5% per year, well above the long-term average of 5%. But that came to a halt in March, as the pandemic chilled demand for air travel and forced airlines to look to cut costs and scale back fleet expansions.
The pandemic, according to Boeing, "has shifted the focus to replacement after a decade of growth bias."
Boeing expects 75% of the 43,110 airplanes delivered over the next 20 years to be single-aisle aircraft, a reminder of how important the 737 franchise is to the company. The 737 MAX remains grounded after a pair of fatal accidents, but Boeing hopes to get it airborne again before year's end.
Overall, wide-body aircraft like Boeing's 787 Dreamliner and 777 are expected to account for just 7,480 deliveries, or 17% of the total, with the remainder coming from demand for freighters and smaller regional jets.
Last week, Boeing announced plans to consolidate production of its Dreamliner, eliminating one of two factories dedicated to the jet.