(By Balaseshan) Boeing Co. (NYSE: BA) said it expects that air carriers in North America will take delivery of 7,290 new airplanes over the next 20 years at a market value of $820 billion with an average airplane value of $110 million.
Taking retirements of airplanes into account, the North America fleet will grow from 6,650 airplanes today to about 8,830 airplanes by 2031. The total world fleet will grow to about 34,000 airplanes by 2031.
Boeing forecasts single-aisle airplanes will grow to 69 percent of the total North America fleet by 2031, twin-aisle airplanes will increase to 18 percent, and regional jets will grow to 12 percent of the total fleet.
High fuel prices are intensifying the need for new fuel-efficient airplanes, prompting several airlines in the United States to accelerate their fleet renewal programs.
Alaska (ALK), American, Delta (DAL), Southwest (LUV)and United (UAL) have announced plans to replace some of their older, less efficient airplanes with next-generation 737s or the new 737 MAX. Both the next-generation 737 and the 737 MAX offer significant advantages in improved capabilities, fuel efficiency and maintenance costs, as well as enhanced environmental performance.
"The long-term outlook for the North American airline industry is about 3 percent annual traffic growth through the forecast period. The market is shaped by aggressive growth of low-cost carriers and the need to replace aging airplanes in the fleets of the established network carriers," said Randy Tinseth, vice president of marketing, Boeing Commercial Airplanes.
Long-haul international traffic to and from North America is expected to grow at an annual rate of about 5 percent, primarily driven by anticipated passenger traffic to Southwest Asia, China, the Middle East, Africa and South America.
Passenger traffic between North America and those regions is anticipated to grow at or above 6 percent per year. This growth in the long-haul segment is expected to result in demand for an additional 1,320 new fuel-efficient, twin-aisle airplanes such as the Boeing 787 Dreamliner.
Large airplanes (747-size and larger) will not see significant demand in North America, with only about 40 airplanes, or 1 percent of the total investment.
BA is trading down 2.15 percent at $71.15 on Thursday. The stock has been trading between $62.12 and $77.83 for the past 52 weeks.