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GERMANY IS BIG MARKET FOR AIRLINERS

Boeing and Airbus have published their latest market forecasts almost simultaneously. For the manufacturers these predictions provide essential information around which they can plan their activities. Both companies are agreed that air traffic is set to increase over the next two decades. But their predictions differ both as to overall volume and distribution of demand over the various market segments.

Airbus's forecast envisages a global requirement for 15,400 new passenger and cargo aircraft worth $1.3 trillion between now and 2019. Boeing's analysis is more optimistic and anticipates a requirement for 22,315 aircraft worth $1.5 trillion over the next 20 years. In Boeing's latest forecast, Germany is assumed to have the third highest demand for new aircraft. According to Boeing, over the next 20 years German airlines will take delivery of 1,070 new passenger aircraft, a requirement only surpassed in the USA and China.

The discrepancies between the two companies' predictions arise firstly from the market segments considered and secondly from differences in the consequences assumed to follow from the likely traffic growth. Boeing's forecast is based on the demand for jets with 50 seats or more, while Airbus confines itself to jets with more than 70 passenger seats.

Boeing believes that global liberalisation of the air transport market will result in increased demand for smaller aircraft. Randy Baseler, Boeing marketing vice-president, is convinced that competition will result in fragmentation. "Where passengers have a choice, they will choose non-stop flights in preference to time-consuming transfers at the major hubs." The result will be a continuation of the trend towards smaller aircraft, as airlines increase flight frequencies on the trunk routes and offer point-to-point services which bypass the hubs. Accordingly Boeing believes that only 330 aircraft will be needed in the 500-plus seat category. This latest Boeing forecast reinforces Seattle's message to Toulouse: Airbus's A3XX programme will not pay off as the potential demand in the very large aircraft (VLA) segment will only support one manufacturer.

Airbus's definition of the VLA market assumes a lower cut-off point. In their analysis, the VLA market segment includes all aircraft with more than 400 seats. And in this segment, according to Airbus, there will be a requirement for 1,235 large capacity jets over the next 20 years. The rationale used by Airbus's market research team is that the growing demand for inexpensive flights in a hotly contested market combined with increasing airspace and airport congestion will result in an increase in the average capacity per aircraft from today's 179 seats to 217 seats in 2019. Besides, there are already 36 aircraft today which can accommodate over 500 passengers.

This latest Airbus forecast reinforces Toulouse's message back to Seattle: Airbus's A3XX programme will pay off, as the potential demand in the VLA segment will support more than one manufacturer.

Which of the two sets of predictions is correct only time will show. It would appear that there is probably some truth in both analyses. On the one hand the airlines will offer more point-to-point services in the future than they have done in the past. This will create considerable demand for aircraft such as the Boeing 777-200 and the A340-500 which will be used on long, thin routes. On the other hand, however, this will not mean that airline hubs are phased out. On the contrary, they too will experience growth, bringing in its wake increased demand for very large aircraft. Experience shows that manufacturers' forecasts have always proved excessively conservative in the past and that demand has almost always been higher than was predicted.

From page 6 of FLUG REVUE 11/2000