In a recent update to its 20-year forecast, Boeing's
What Happened: Airbus, the world's leading planemaker, anticipates the global fleet to more than double, reaching 48,230 planes in the next 20 years, Reuters reported on Monday. The company also foresees industry-wide deliveries of 42,430 new airplanes, including 41,490 passenger jets, which marks a 4% increase from the previous survey.
The demand for larger wide-body planes is seeing a sharp increase as airlines look to renew capacity. Airbus has revised its total wide-body demand forecast by 9% to 8,920 units. The most significant changes in Airbus' forecast affect the long-haul fleet, with double-digit increases in South America and North America.
Meanwhile, demand for single-aisle passenger planes like the Airbus A320 and Boeing 737 series is expected to increase by 3% to 33,510 units. The company's predictions are based on economic forecasts suggesting that 1.7 billion people will join the middle class, with some income available for air travel, in the next 20 years.
Bob Lange, head of market analysis and forecasts at Airbus, said, "We see particularly strong growth in Asia and the Middle East, led particularly by India and China. Domestic China (traffic) will overtake the U.S."
Why It Matters: However, these optimistic forecasts come after Airbus warned of potential delivery delays through 2026 due to supply chain issues. The company's shares also took a hit when it slashed its 2024 targets due to these supply chain woes.
In response, Airbus launched a cost-cutting program and implemented a hiring freeze to strengthen its aircraft manufacturing business.
Boeing is currently facing scrutiny for two 737 MAX crashes in 2018 and 2019, which resulted in 346 deaths. The Federal Aviation Administration has limited Boeing's production of the Max to 38 per month. The company is currently producing fewer than that but plans to increase output to 38 in the second half of the year.
Price Action: On Friday, Airbus SE closed at $36.31 as per Benzinga Pro.
