Boeing sees long-term growth for Southeast Asia aviation

BANGKOK, Thailand, 26 Nov. 2009. A Boeing [NYSE: BA] aviation forecast predicts long term growth in the Southeast Asia commercial aviation market over the next 20 years and that Southeast Asia's airlines will require more that 2,100 new airplanes valued at approximately $330 billion. Globally, airlines will need 29,000 new airplanes through 2028, valued at $3.2 trillion, company officials say.

Nov 26th, 2009

BANGKOK, Thailand, 26 Nov. 2009. A Boeing [NYSE: BA] aviation forecast predicts long term growth in the Southeast Asia commercial aviation market over the next 20 years and that Southeast Asia's airlines will require more that 2,100 new airplanes valued at approximately $330 billion. Globally, airlines will need 29,000 new airplanes through 2028, valued at $3.2 trillion, company officials say.

"It is encouraging that 27 percent of our 20-year forecast already is on order," says Randy Tinseth Boeing Commercial Airplanes vice president of marketing. "Equally important is that this backlog is well balanced – by type of airplane, by airline business model, and region of the world."

Tinseth notes that as of the third quarter of 2009, Boeing had a backlog of 3,400 airplanes, valued at $254 billion.

Airlines and the aviation industry in general have been hurt by a challenging and volatile business environment, Tinseth says. The world economy has been in recession, passenger and cargo traffic have declined and fuel prices are volatile.

"But data indicates that the economic downturn has reached bottom and recovery has begun," Tinseth says. "However, global recovery will be a long, slow process."

The Thai economy is anticipated to contract three percent in 2009, Tinseth noted, but is projected to grow around five percent in 2010 before settling into a long-term annual growth trend of 4.5 percent.

Global recovery to the 2008 peak won't occur until perhaps 2010, he says.

"In Southeast Asia, air traffic growth will outpace economic growth," Tinseth says. "Air travel growth over the next 20 years is expected to be above 6.5 percent, while the region's economy is projected to grow at 4.6 percent."

Looking at the Asia Pacific region in its entirety, long-term annual air traffic growth is projected to be 6.9 percent over the next 20 years, Tinseth adds.

"Travel volumes in Asia Pacific overall are large and growing rapidly," Tinseth says. "Asia Pacific will account for 41 percent of travel in 20 years' time, up from around 32 percent today. In fact, in less than 10 years, Asia Pacific will easily be the largest air travel market in the world."

To deal with the realities of the market created by the current economic environment, airlines adapted quickly by adjusting capacity, improving efficiency and restructuring, he says.

"In the longer term, airlines will continue to invest in more efficient, environmentally progressive airplanes," Tinseth continues, "that also serve the travel patterns of air travelers with their ability to fly to more places more often.

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