Although publication of Boeing's Commercial Market Outlook (CMO) took place in September, precluding the ability to include projections based on the effects of the latest Omicron coronavirus strain, the working assumption calls for a return to pre-2019 growth rates once the world emerges from the pandemic. Whether or not that proves to be the case, the Asia-Pacific region—with China at the forefront—will likely serve as the most prominent engine for growth in global aviation.
“A key assumption in our forecast is that the pandemic will not last forever—it will eventually be beaten, and the restrictions and requirements will no longer be necessary,” said Ihssane Mounir, senior vice president of sales and marketing for Boeing Commercial Airplanes. “At that point, we expect to see a surge of pent-up demand for long-haul travel similar to the current dynamics in some short-haul markets, as travelers look to recover postponed visits, vacations, and other trips followed by a return to long-term fundamentals."
In 2019, Asia-Pacific accounted for 33 percent of passenger traffic by region, of which China took 15 percent, a figure expected to rise to 41 and 20 percent respectively in 2040. In contrast, Europe and North America’s combined share will fall from 46 percent of the total in 2019, to 37 percent in 20 years.
Boeing said Asia-Pacific stood as the largest region in the world. Accounting for 55 percent of the global population, its five regions—China, Northeast Asia, Southeast Asia, South Asia, and Oceania—each bring unique and diverse economic, demographic, and geographic characteristics. “These subsequently drive different market, passenger, and fleet dynamics, as well as forecasted growth rates,” the OEM said. “Asia-Pacific currently consists of 35 percent of the world's economic output, which will grow to over 43 percent of economic output by 2040.”
According to its latest forecast, air travel within Asia-Pacific markets will account for nearly half of global air traffic by 2040, driving long-term demand for 17,645 new airplanes valued at $3.1 trillion, Boeing said in a November 9 press release. To support its commercial aviation industry, Asia-Pacific countries will also require aftermarket services worth $3.7 trillion.
Boeing Commercial Airplanes managing director for regional marketing David Schulte told AIN that 64 percent of new deliveries to Northeast Asia and Oceania would be for replacement, an indication of the advanced age of existing fleets. In Southeast Asia, replacement will account for only 36 percent of fleet expansions while growth represents the balance.
Of total new aircraft, China will require 8,700 and the rest of Asia-Pacific 8,945. The CMO said China would require 6,490 single-aisle, 1,650 widebody, 360 regional jet, and 200 freighter aircraft. In contrast, the Asia-Pacific region outside China will need 6,970 single-aisles, 1,850 widebodies, but only 85 freighters and 40 regional jets. The Asia-Pacific region as a whole will require 231,000 new pilots and 249,000 technicians, with China taking over half of each figure.
China's domestic passenger flows will rank as the world’s largest in 2040, growing 3.2 times in the next two decades, compared with only a doubling in intra-Europe and 1.7 times in intra-North America.
Not all post-pandemic outlooks seem as rosy as Mounir’s, at least in the mid-term. “In order to survive and thrive in the post-Covid-19 world, airlines will have to fundamentally rethink their fleets, their business models, and their finances,” said Dick Forsberg, senior consultant to PricewaterhouseCooper's aviation finance advisory services. “This will not always lead to change, but for most a return to business as usual is not going to be a viable option.
“To put it bluntly, there are too many aircraft in the system relative to the realistic prospects for medium-term recovery," he said. "The new normal in many markets, and for the industry as a whole, is going to be a smaller industry: a market of 4.5 billion passengers will not return overnight.”