LAXDESI
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Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 12:31 am

Boeing projects $2.6 tln market for new planes over 20 years. Link:
http://www.marketwatch.com/News/Stor...F564B2740E%7D&siteid=mktw&dist=nbs

Quotes:
BA on Wednesday forecasted a $2.6 trillion market for new commercial airplanes over the next 20 years. The new airplanes will accommodate a forecasted 4.9% annual increase in passenger traffic, and a 6.1% annual increase in air cargo traffic, the Chicago-based aerospace giant said.

Boeing projected a need for about 27,200 new commercial airplanes, doubling the world fleet by 2025. On a delivery-dollar basis, the largest market is projected to be the Asia-Pacific region, with 36% of the $2.6 trillion total -- a result of the demand among Asian carriers in that market for more twin-aisle airplanes, Boeing said. North America will make up 28% of the delivery dollars and Europe will make up 24%. Deliveries to airlines in Latin America, the Middle East and Africa will represent a total of 12% of the delivery dollars between 2006 and 2025, the company said.
 
keesje
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 12:34 am

In between the lines, not explicitly, Boeing raised the 400+seats VLA segment +10% since last year. Maybe another gradual 10% in 2007 & 2008?
"Never mistake motion for action." Ernest Hemingway
 
firennice
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 12:38 am

I wonder what they project to grab out of that.
 
pavlin
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 1:07 am

Quoting Keesje (Reply 1):
Boeing raised the 400+seats VLA segment +10% since last year. Maybe another gradual 10% in 2007 & 2008?

Yes, since they launched the 747-8 the market has miraculosly expanded. But still no orders for big aircraft. Neither A380 and 747. Exept some cargo 747-400
 
boeingbus
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 1:14 am

Quoting Pavlin (Reply 3):

Yes, since they launched the 747-8 the market has miraculosly expanded.

Maybe they know something you don't? I love the conspirarcy theororist... Maybe they have received more interest on jumbo jet than they have before?
Airbus or Boeing - it's all good to me!
 
n844aa
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 1:25 am

Quoting Pavlin (Reply 3):
Yes, since they launched the 747-8 the market has miraculosly expanded. But still no orders for big aircraft. Neither A380 and 747. Exept some cargo 747-400

 Confused

I thought there were 18 orders for -8F and one for the -8I?
New airplanes, new employees, low fares, all touchy-feely ... all of them are losers. -Gordon Bethune
 
airfrnt
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 2:09 am

Quoting Pavlin (Reply 3):
Yes, since they launched the 747-8 the market has miraculosly expanded. But still no orders for big aircraft. Neither A380 and 747. Exept some cargo 747-400

Yeah. Boeing needs to be careful here. They are starting to fall into the same wishful thinking trap that Airbus is currently tied up in.
 
pavlin
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 2:13 am

Quoting N844AA (Reply 5):

I thought there were 18 orders for -8F and one for the -8I?

Pardon me. I forgot that. But still no passenger 747.

Quoting AirFrnt (Reply 6):
Yeah. Boeing needs to be careful here. They are starting to fall into the same wishful thinking trap that Airbus is currently tied up in.

? Please explain.
 
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N328KF
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 2:36 am

Quoting AirFrnt (Reply 6):
Yeah. Boeing needs to be careful here. They are starting to fall into the same wishful thinking trap that Airbus is currently tied up in.

I don't see how. Boeing's investment in the 748 is much lower (partially due to shared R&D with the 787) and they don't need to sell a whole lot of airframes to break even.

And also, keep in mind that Boeing need not make a profit to achieve their goal here. Look at the 747-8 as an airframe intended to keep customers from buying Airbus products...it keeps sales "within the family," and in some cases, would deny Airbus additional A380 sales. Think of it as performing the same role as the 767-400...not a stellar sales success, but it kept two key customers within the fold, and one of them is now a major 787 customer.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
starrion
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 2:44 am

"Pardon me. I forgot that. But still no passenger 747."

No they have the one -8i from an unidentified Middle Eastern customer.
Knowledge Replaces Fear
 
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Stitch
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 3:47 am

Boeing might also feel that the 748I will be a more cost-effective plane to operate then the A388 should fuel prices rise and world traffic patterns fall (due to higher fares driven by higher fuel costs) and as such some carriers who they expected to go straight from the 744 to the A380 might instead go from the 744 to the 748.
 
Aither
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 4:02 am

Quoting Stitch (Reply 10):
Boeing might also feel that the 748I will be a more cost-effective plane to operate then the A388 should fuel prices rise and world traffic patterns fall (due to higher fares driven by higher fuel costs) and as such some carriers who they expected to go straight from the 744 to the A380 might instead go from the 744 to the 748.

Or on the contrary that could lead to a greater concentration of traffic.
Thinner less profitable routes could be dropped (eg AA SJC-NRT) in favor of trunk routes (eg LAX-NRT).
Never trust the obvious
 
keesje
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 4:59 am

Can you up your forecast for VLA´s 10% & attack Airbus for developing the A380 at the same time? Randy can!

Boeing lambasts Airbus's product strategy
http://msnbc.msn.com/id/13831017/

I start to like him more & more!

"Never mistake motion for action." Ernest Hemingway
 
airfrnt
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 4:59 am

Quoting N328KF (Reply 8):
I don't see how. Boeing's investment in the 748 is much lower (partially due to shared R&D with the 787) and they don't need to sell a whole lot of airframes to break even.

The 748i is cheap, but it is no where near as cheap as Boeing has been making it sound.

Quoting N328KF (Reply 8):


And also, keep in mind that Boeing need not make a profit to achieve their goal here. Look at the 747-8 as an airframe intended to keep customers from buying Airbus products...it keeps sales "within the family," and in some cases, would deny Airbus additional A380 sales. Think of it as performing the same role as the 767-400...not a stellar sales success, but it kept two key customers within the fold, and one of them is now a major 787 customer.

There is yet to be a single example of a grouped order that Boeing won that included the 748i as a element. Might this plane be snaking some orders for Airbus, certainly, but I don't think the market is large enough to sustain a single manufacturer in this space, to say nothing of two.
 
pavlin
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 5:09 am

Quoting Starrion (Reply 9):
No they have the one -8i from an unidentified Middle Eastern custome

You are right. I remember those post
 
texfly101
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RE: Boeing Forecasts $2.6 Trillion Market Over 20

Thu Jul 13, 2006 6:17 am

The forecasts are based on a very complex algorithm that takes into account a lot of non commercial aviation related items. Things like population growth in countries with limited capital available for infrastructure improvements. That translates into air cargo as the area to serve the consumer demand. Think of things like the future of oil production, supply and demand mixed with the projected political alignments and you start getting a view of what goes into this forecast. More importantly, the inclusion of the airlines projections are given a higher ranking than costs of airplanes and such stuff as we typically discuss. The forecasts are the end result of these analysis and are an ongoing changing set of numbers as Keesje points out. And it has a company flavor too. The differences between Airbus and Boeings forecasts back in the late 90's was striking. And it directed where the two companies went with their product lines. Thats how the 787 started as a Point to Point, 20% improvement in capital costs, fuel burn and O&M costs. I think its a fair statement to make that the Boeing Point to Point strategy has proven to be successful for their product lines. I'm not saying that the Airbus Hub and Spoke is wrong, but it did dictate that the development of the A380 was the direction that their product line took, leaving the twin aisles to follow later. As far as Boeing getting into the same trap, one thing they do is constantly back check their assumptions as time goes along and revise them accordingly when they see what the real numbers were compared to the projected. That interative approach serves to keep the forecasts in line with what will happen in the future. Its interesting to see how the projections have lined up over the years with the reality of the industry.
 
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Stitch
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Thu Jul 13, 2006 7:08 am

Quoting Aither (Reply 11):
Or on the contrary that could lead to a greater concentration of traffic. Thinner less profitable routes could be dropped (eg AA SJC-NRT) in favor of trunk routes (eg LAX-NRT).

Or keep the routes, downsizing them and employing more efficient planes on them. Such a pattern would suit the 787 and (current) A350 well, and might explain the strong sales in the segment.
 
Aither
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Fri Jul 14, 2006 7:29 am

Quoting Texfly101 (Reply 15):
think its a fair statement to make that the Boeing Point to Point strategy has proven to be successful for their product lines. I'm not saying that the Airbus Hub and Spoke is wrong, but it did dictate that the development of the A380 was the direction that their product line took, leaving the twin aisles to follow later

"Point to Point" is not a strategy.
It only means new routes. And there has been always new routes (because of something called "growth"). That's not Boeing, that's not Airbus, this is just the market.

If you think "point to point" means no hub, well look at the new long range routes announcments. They almost all involve a hub at one side at least.

Quoting Stitch (Reply 16):
Or keep the routes, downsizing them and employing more efficient planes on them. Such a pattern would suit the 787 and (current) A350 well, and might explain the strong sales in the segment.

The problem is more about the demand than the airline costs. Airplanes have lower load factors on thinner routes.
Never trust the obvious
 
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Stitch
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RE: Boeing Forecasts $2.6 Trillion Market Over 20 Year

Fri Jul 14, 2006 8:13 am

Quoting Aither (Reply 17):
The problem is more about the demand than the airline costs. Airplanes have lower load factors on thinner routes.

But if you can tailor capacity to the profitable part of the demand (so if you have demand for 300 seats, but only 200 sell for positive RASM, so you only offer 200 seats) you can still make money.