Economic Headwinds, Russia’s Removal Cut Boeing’s 20-Year Delivery Forecast Projection

Expected long-term ramifications from the war in Ukraine and a broader global economic slowdown has led Boeing to cut projected deliveries in its latest 20-year outlook 5.6% compared to the 2021 version. 

Boeing’s updated Current Market Outlook (CMO), released July 18, sees 41,170 new-aircraft deliveries through 2041. Last year’s equivalent figure, updated in September, was 43,610. 

A big chunk of the difference is the loss of Russia’s market due to the country’s invasion of Ukraine and resulting sanctions that prevent the major Western commercial aircraft suppliers, including Airbus, ATR, Boeing, and Embraer, from selling or supporting aircraft with ties to Russian entities. The 2021 forecast included 1,540 aircraft earmarked for the Russian market, Boeing VP-Commercial Marketing Darren Hulst told reporters in a briefing on the latest CMO. 

Even adding Russian deliveries in still would not produce a year-2041 fleet size as large as last year’s forecast saw for 2040, however. This stems from a reduction in two fundamental forecast variables. Boeing now sees global revenue passenger kilometers increasing at a 3.8% compound annual growth rate through 2041, while global GDP will increase 2.6% annually. Comparable 2021 CMO figures were 4.0% and 2.7%, respectively. 

“The 20-year view is impacted by a slight reduction in our assessment of global GDP for the long term, and then the geopolitical and sustainability issues that will face the market,” Hulst said, particularly in the second half of the forecast, when slightly more than half of the total projected deliveries will come. 

Boeing sees the 2019 global fleet of 25,900 aircraft nearly doubling by 2041, to 47,080 aircraft. About half of the projected deliveries will be replacement aircraft, and the other half will support growing demand. 

The 2022 forecast—which like the 2020 and 2021 versions uses 2019 figures as its baseline—is the second in three years where Boeing has cut projected total deliveries. The 2020 forecast trimmed about 2% from the comparable 2019 totals—a reflection of the COVID-19 pandemic’s long-term uncertainty.  

Boeing’s 10-year outlook shows confidence in a continued recovery from the recent downturn. Deliveries are projected to total 19,575, a slight increase over the 2021 forecast’s 10-year look-ahead, even factoring out the Russian market, which had 710 aircraft in the 2021 forecast. 

“Overall, we still see late 2023, early 2024 as the time where the industry recovers to at least the level of pre-pandemic traffic,” Hulst said. “The sources of that demand are obviously dynamic as we go through the next two years. Domestic markets will be back by early next year, and long-haul markets—probably mid to late 2024, based on current trajectory.” 

Despite strong domestic recoveries in several key markets, notably the U.S., the overall domestic market is lagging expectations due to pandemic-related headwinds in places such as China, Hulst said. 

“On the international side, we’ve been a little bit surprised in terms of the pace of international recovery during the last few months as restrictions have been removed,” he added.