SINGAPORE — The world’s largest planemaker Boeing expects nearly half of the world’s air traffic growth will be driven by the Asia-Pacific region over the next 20 years, but is monitoring local currencies to assess airlines’ ability to meet orders.
On the eve of the Singapore Airshow, Boeing forecast the fleet of aircraft in the region would triple in size over the next two decades, sparking demand for close to 13,000 more planes valued at $1.9 trillion.
Air travel has surged in the region, driven by a rise in disposable incomes and low air fares offered by budget carriers, notably in Southeast Asia.
Randy Tinseth, VP of Marketing at Boeing Commerical Airplanes:
“We are watching what’s happening here in terms of currencies and in terms of economic growth.”
After years of explosive growth, the region’s budget carriers now face the possibility of overcapacity as deliveries accelerate, airlines expand into each other’s markets and currency weakness threatens to dent economic growth.
By the end of the year, airlines in Southeast Asia will have 1,800 planes, while their other book is set to surpass the 2,000 mark.
This week’s Singapore Airshow attracts the world’s major commercial and defense manufacturers, as well as buyers in the forms of airlines and military top brass.
Boeing estimated Asia-Pacific’s fleet size would blow out to 14,750 over the next 20 years, from 5,090 in 2012.
“Asia Pacific economies and passenger traffic continue to exhibit strong growth. Over the next 20 years, nearly half of the world’s air traffic growth will be driven to travel to, from or within the region.”
Rival Airbus sees Asia-Pacific as a lucrative market. It says planes on order make up 36 percent of the world total and the figure is rising.
Both Airbus and Boeing have committed to record production rates for their most popular models, but executives are closely watching the financial turmoil in key aviation markets, such as Indonesia and Thailand.
The Asia-Pacific is home to some of the world’s biggest long-haul carriers and budget carriers such as AirAsia and Lion Air. The two airlines have placed aircraft orders valued at billions of dollars and are among the biggest customers of Boeing and Airbus.
“They (low-cost carriers) have been able to provide a service to a part of the population that couldn’t fly before. And so what they are able to do is, to reach into a country and help stimulate demand, very similar to what a Southwest or a Ryanair did over time. Their growth is being bolstered by both the growth in income we see, but also the fact that they are able to push their product into a greater base.”