Boeing warns of limits to airline growth
Wednesday 14/06/2017 - Source: Times Online
A lack of airports in Europe will start to limit airline growth within 20 years, Boeing said yesterday.
In its annual review of the global aerospace market the aircraft maker said that the lack of airport and air traffic control infrastructure across Europe would limit passenger growth.
It is predicting that passenger growth globally will be 5 per cent a year for the next 20 years on average.
Randy Tinseth, vice-president of marketing at Boeing, said that the growth rate would average slightly higher than 5 per cent in the first decade and then fall in the second. The dip is expected to be caused by a lack of infrastructure and also regulations to limit emissions of greenhouse gases.
Despite these pressures, the continued strong growth in passenger numbers will require the world's airlines to add 28,600 new aircraft to their fleets.
Boeing forecasts that these aircraft will be worth $2.8 trillion at list prices with the American company and its European rival Airbus expected to take the lion's share.
Mr Tinseth said: "We do expect issues around infrastructure in Europe and North America to constrain growth and we are also building in environmental pressures to the model."
In Boeing's analysis of the next 20 years, it predicts that the number of aircraft flying will double from today's level. The global fleet stands at 18,200 but 10,000 will be retired over the next two decades. The addition of 28,600 new aircraft will give a global fleet of 36,400 by 2027.
The largest proportion of this fleet will be single aisle jets such as Boeing's 737 or Airbus's A320. Sales of these will continue to be bolstered by the growth of low-cost carriers such as Ryanair. Boeing estimates that the no-frills airlines will grow from 29 per cent of the market to 36 per cent.
Boeing also expects that passenger growth will be fastest in Asia, with China experiencing 8.8 per cent annual growth. By 2027 its aviation sector will be as busy as North America's.
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