In a new study titled "The World Market for Large Commercial Jet Transports," Forecast International projects that a total of 6,075 large commercial jet transports will be produced in the 10-year period from 2005 through 2014. Measured in constant 2005 U.S. dollars, the value of this production is estimated at some $599 billion. Accounting for most of this forecast production are Airbus and Boeing. Boeing production for the forecast period is estimated at 3,151 aircraft, while Airbus output is predicted to total 2,757 aircraft.
The airline industry is presently undergoing a shake-out, as hub-and-spoke network airlines (also known as the majors) continue to be challenged by low-cost carriers (LCCs) that operate under a much more streamlined and simplified business model. Meanwhile, at the margins, the world of private business aviation continues to lure some high-yield first-class and business-class customers away from the scheduled carriers.
Overall net profitability has been elusive for the world airline industry since 2000, but it should be noted that the world's airlines do not present a uniform picture in this regard. For instance, carriers in the Asia/Pacific region are doing relatively well, while European airlines show a mixed bag of results. North American majors are generally suffering, although LCCs in North America are mostly profitable.
Air passenger traffic grew strongly in 2004, and such growth has continued into 2005. Traffic growth will eventually help pull the airline industry back to profitability, though there may be a few airline casualties along the way. Many surviving carriers will likely restructure their existing operations. A number could elect to join new or expanding code-share alliances, some of which might lead to outright mergers further down the road.
Airbus and Boeing have different ideas as to the type of aircraft that are required for the changing airline market. As exemplified by its 555-passenger A380, Airbus believes that a robust market exists for 550+ passenger aircraft to fly passengers on dense trunk routes between major hubs. Boeing has no plans to market a similar aircraft anytime soon, believing that the market for such an aircraft is currently too small for more than one competitor.
Boeing's view of the market is represented by the company's new mid-size 787 Dreamliner. "The 787 reflects Boeing's view that route fragmentation will continue and that passengers will want to bypass increasingly congested hubs and fly point-to-point between secondary airports," said Raymond Jaworowski, Forecast International senior aerospace analyst.
Airbus has countered the 787 with the A350, an A330 derivative. The announcement of the A350 seemed to temporarily take some momentum away from the 787. More recently, though, there has been a flurry of orders and commitments for the Boeing aircraft.
The single-aisle airliner market is also a key battleground between Airbus and Boeing. Here, Boeing's 737 series competes with the Airbus A320 family. These two aircraft families can be expected to account for the bulk of Airbus and Boeing production over the next 10 years. However, the smaller models in each of the two series are increasingly facing competition from new regional jets seating over 100 passengers. These regional jets can be expected to steal some market share away from the smaller Airbus and Boeing single-aisle versions.