Boeing cuts 20-year jet delivery forecast for first time in decade

Boeing Co. has lowered its 20-year forecast for the commercial airplane market for the first time in at least a decade, citing the global recession, declining passenger and cargo traffic, and unpredictable fuel prices.

The world's second-largest airplane maker said Thursday it expects a market for 29,000 new passenger and cargo jets valued at $3.2 trillion over the next two decades. That's down 1.4 percent from a forecast last year of 29,400 planes, also valued at $3.2 trillion. The dollar value is unchanged due to anticipated price inflation.

Chicago-based Boeing and European rival Airbus SA, the world's largest plane manufacturer, have been grappling with falling orders as the world economic crisis forces airlines to cancel or delay plans to buy new planes. Tight credit markets have made it more difficult for potential customers to secure financing, though Boeing has said it expects to provide up to $1 billion this year.

Boeing nonetheless maintains a record backlog of more than 3,500 orders, including 866 for its forthcoming 787, a long-delayed but highly popular new aircraft built for fuel-efficiency with lightweight carbon composite parts.

In its latest forecast, Boeing said air traffic growth, which has averaged more than 5 percent annually over the past 30 years, is expected to grow at an average annual rate of 4.9 percent over the next 20 years.

Despite current difficulties, the commercial airplane market will stabilize and economic growth will return over time, Boeing said in a statement.

"While the commercial aviation industry is facing a significant downturn, it is cyclic and has a long history of declines and upturns," said Randy Tinseth, vice president of marketing for Boeing's commercial airplane division.

Global demand remains strong for new, more efficient commercial airplanes amid high fuel prices, aging fleets and environmental concerns, the company said. Airlines will grow, Boeing said, by responding to passengers' preference for more flight choices, lower fares and direct routes to a wider range of destinations.

Less efficient jets will be retired and replaced with new ones in the United States and Europe, while robust demand growth from China, the Middle East, India and other emerging markets with dynamic populations and rising incomes will help balance global demand, according to Boeing. About 80 percent of Boeing's orders have come from overseas customers.

The Asia-Pacific region will be the largest commercial airplane market, with 31 percent of new airplane deliveries and 36 percent of the market's total value. The region's share of the global air travel market will rise to 41 percent from 32 percent.

Boeing cut the number of new regional jet deliveries it expects in the market by about 16 percent, to 2,100 from 2,510 last year, representing a $10 billion slide in value. It said airlines would move away from those planes to single-aisle jets due to capacity, economic and environmental constraints.

It raised its estimate for single-aisle passenger jets -- the largest segment by units -- to 19,460 from 19,160 last year

Boeing trimmed its forecast for the projected number of new jumbo jets, such as 747s, to 740 from 980 -- a $70 billion decline in value. Those new planes are expected to be replacements for older ones.

Although global air cargo traffic dropped about 6 percent annually in 2008 and likely will fall again in 2009 due to lower industrial production, Boeing expects average growth of 5.4 percent annually over the next two decades, with the market nearly tripling overall. Larger freighters and more efficient planes will help keep cargo transport affordable, according to the company.

The forecast, released in London, was Boeing's 45th annually. A spokesman for the company said the drop in the number of expected new plane deliveries was the first such reduction in at least 10 years.

Shares of Boeing slid $1.64, or 3.1 percent, to close at $50.66.