Boeing sees steady market growth for Northeast Asia

Randy Tinseth, vice president of Marketing for Boeing Commercial Airplanes.

TAIPEI, Oct. 23, 2018 – Boeing (NYSE: BA) projects steady growth for Taiwan’s commercial aviation market and a two percent annual growth rate in passenger traffic for the Northeast Asia region over the next 20 years.

“Over the past decade passenger traffic to and from Taiwan has nearly doubled with a growth rate of over seven percent annually,” said Randy Tinseth, vice president of Marketing for Boeing Commercial Airplanes. “Deregulation and open skies have played an integral role in the growth of tourism in Taiwan and ultimately increased passenger traffic.”

In addition, Tinseth revealed that a rebound in the global air cargo market has positively impacted Taiwan’s air cargo carriers.

“The resurgence in air cargo over the past couple of years has resulted in increased revenue for both China Airlines and EVA Air,” said Tinseth. “In fact, year-to-date, yields for both carriers are up by double digits.”

Boeing revealed that airlines in the Northeast Asia region will generate the need for 1,450 new airplanes, valued at $310 billion and will result in a total fleet size of 1,600 airplanes by 2037 for the region.

In the next two decades, Tinseth added global airlines will be in need of more than 42,700 new commercial airplanes valued at $6.3 trillion, riding on robust demand for air travel.

“Due to the maturity of the market environment here in Northeast Asia and especially in Taiwan, a much higher percentage of new airplanes will be used for replacement,” said Tinseth. “In the next 20 years, 69 percent of all new deliveries in this region will be to replace older and less-efficient airplanes currently in service. We have already seen this trend take place here in Taiwan with both China Airlines and EVA Air replace older airplanes with new 777s and 787s.”

In addition to Commercial Airplanes, Boeing also unveiled the global forecast for Commercial Services to be $8.8 trillion dollars over the next two decades. Of that total, Asia Pacific will make-up nearly 40 percent or $3.5 trillion of that demand.

“The massive in-service fleet in Asia will generate a strong and growing demand for aviation services ranging from supply chain support (parts and parts logistics), to maintenance and engineering services, to aircraft modifications, to airline operations,” said Tinseth. “This will provide Boeing and other services-based businesses in the region with ample opportunities to capitalize on this critical business going forward.”

Globally, Boeing projects airlines to invest $6.3 trillion for more than 42,700 new commercial airplanes to be delivered over the next 20 years. With the addition of the $8.8 trillion services market, the total commercial market will be valued at $15 trillion.

Boeing reports quarterly earnings before the opening bell on Wednesday. Oct. 24, and analysts expect the company to disclose earnings per share between $3.51 and $3.58. A key metric is commercial airline deliveries, which are expected to be below expectations despite robust earnings from airlines and strong passenger traffic. The key models for Boeing include the versions of the 737.

The complete forecast is available at www.boeing.com/commercial/cmo/index.html