In previous years, Boeing, Airbus, AVIC, Ba and other aviation manufacturers will release aviation market demand forecasts in July and August. These reports focus on the demand changes of different aircraft types in different regional markets. Although the data are slightly different, the manufacturers' demand for civil aviation in the next 20 years has roughly drawn a gentle growth curve.
It's not the same this year. As the year 2020 is drawing to a close, the annual market forecasts of major aviation manufacturers have not been released yet. Airbus China replied to the 21st century economic reporter on November 12: because the situation is not clear, Airbus thinks it is too early to make predictions, so no relevant report has been issued so far.
In this case, the annual market report released by Boeing on schedule is extra special and worth savoring. On November 12, Richard Wynne, general manager of Marketing China of Boeing civil aircraft group, told reporters that it is expected that in the next 20 years, Chinese airlines will purchase 8600 new aircraft, worth US $1.4 trillion, and require us $1.7 trillion of civil aviation services. This reflects the expectation that the market will recover strongly after the epidemic.
Global demand falls, but China increases by nearly 7%
This time, all of Wei Li's questions and answers are completed through video connection. This is also the first time. Previously, Boeing's marketing executives will come to China to explain to Chinese media the inside information of Boeing's annual market demand forecast report, and take the opportunity to interact closely with Chinese airlines once again. However, due to the epidemic situation this year, Wei Li could not come to China and could only complete the report release and question and answer session through video link.
Wei Li said Boeing's forecast for the future reflected the strong market recovery after the outbreak.
It is worth noting that in Boeing's forecast this year, the global market for new aircraft demand is slightly lower. Boeing expects to deliver 18350 new aircraft worldwide between 2020 and 2029, down 11% from the market demand forecast made in 2019. Boeing's forecast for 2020-2039 is that 43110 commercial aircraft will be delivered worldwide. This figure is also about 2% less than the 44040 passenger aircraft expected in 2019, that is, 930 less demand.
Therefore, the Chinese market is one of the few countries judged by Boeing that the demand is still growing. Last year, Boeing predicted that China's aviation market would need 8090 new aircraft, worth $1.3 trillion, and $1.6 trillion worth of aviation services in the next 20 years to meet China's annual air passenger flow growth of 6%.
He said Boeing's forecast takes into account factors such as the rapid growth of China's middle-income population, sustained economic growth and urbanization. He said China's civil aviation jet fleet has expanded seven times since 2000. In the past decade, about 25% of the growth in the global aviation industry has come from China. This trend will continue over the next 20 years.
Wei Li said that although the epidemic has seriously affected all passenger transport markets in the world, China's basic growth drivers remain tough and strong.
That's why, despite the challenges posed by the epidemic, China's aircraft and service market outlook for the next 20 years has increased by nearly 7% compared with last year's forecast. Waley believes that the growth is driven by the continued high demand for single channel aircraft, China's expanded share of wide body passenger aircraft to support international routes, and the large-scale replacement cycle as China's fleet matures.
Three years ago?
Boeing's forecast seems a little optimistic. After all, the demand for new aircraft depends on the market situation and the airline's money bag.
On November 12, the results of a quarterly survey conducted by the International Air Transport Association (IATA) on airline CFOs and air cargo managers showed that in the third quarter of 2020, the financial situation of the vast majority of Airlines was still very difficult, with 83% of respondents saying that their profitability declined, higher than that in July (78%). The vast majority of respondents said that the industry's losses were deteriorating and the profit outlook for the next 12 months was gloomy. The survey results show that passenger demand in the third quarter of this year has not improved compared with the second quarter.
"The epidemic has affected the demand for air passenger transport. Without the recovery of market demand, the airline company will not be able to return to normal in terms of finance." Qi Qi, a senior civil aviation expert, believes that airlines will adjust the aircraft procurement plan and even the pick-up rhythm of the purchased aircraft. The delivery of new aircraft will certainly be restrained, and the whole related industrial chain will also be affected.
Wei Li admitted that this year's civil aviation market situation is special, the new crown epidemic indeed has a very profound impact on all aspects of the industry, "may be the most serious impact in the history of the entire industry.".
According to IATA data, the number of flights around the world is only about 50% of that before the epidemic, and the passenger traffic volume is only about 25% of the normal level before the epidemic. In particular, the impact on the international market is greater.
"The development of civil aviation market has a very strong inherent resilience, which has been proved more than once in history." Wei Li said that in the past 40 years, the global civil aviation traffic volume has been showing a gentle growth curve, even though it has encountered global shocks, including the terrorist attacks of September 11 in 2001 and the global financial crisis in 2008. Both events left traces on the development curve, but both returned to the level before the impact and returned to the growth curve three years later and two years later.
Therefore, Wei Li believes that although the impact of the new epidemic situation and scope will be far higher than the previous cases, "but the law of historical development tells us that we will certainly come out of this impact." Weili predicts that it may take about three years for global civil aviation market demand to return to the level of 2019.
75% market share for aircraft
As the market changes, the demand will naturally change.
In IATA's investigation, a large part of airlines are considering various long-term adjustments to their strategies. 59% of the respondents said that they would reduce the frequency of flights, but still retain the existing network, 28% of the respondents said they might switch to small aircraft, 41% of the respondents wanted to expand the freight network, and 21% of the respondents even wanted to significantly change their business model, such as becoming a low-cost and short-distance airline company.
On the other hand, the recovery of domestic aircraft market will be the first to recover. Boeing predicts that the world will need 32270 narrow body aircraft in the next 20 years, down 0.5% from the forecast in 2019, while the demand for wide body aircraft in the same period is only 7480, 10.3% lower than the 8340 aircraft forecast last year. Among them, the demand forecast of China Airlines for narrow body aircraft and wide body aircraft is 6450 and 1590 respectively.
Since the important battlefield in the future is the narrow body aircraft market, winning narrow body aircraft can win the "world". Isn't Boeing going to lose market share? After all, the 737max series, the main aircraft of Boeing's narrow body aircraft, is still banned from flying around the world and has not obtained the go around permit of any country. As for Boeing 737 Max's go around prospects in China, Wei Li told reporters that he had been communicating with CAAC in the past period of time and actively responding to their requirements, but the time of go around was determined by CAAC, and Boeing has no timetable.
He also responded to Airbus's competition. It is believed that once the 737max series aircraft resume market operation and have the opportunity and ability to obtain good market share, Boeing company is still full of confidence in the competitiveness of 737max, "regardless of its range and efficiency, it can meet the market demand". Weili told reporters that Boeing has no plans to develop new products to replace the 737max.
Boeing and Airbus are not alone in the narrow body aircraft market. Qi Qi believes that in the next 10 years and 20 years, the biggest variable of domestic new aircraft delivery is C919 certification, mass production and delivery on schedule. With the support of ARJ21 countries and the enthusiasm of airlines, the market share of C919 in domestic single channel new aircraft is expected to increase rapidly, which objectively reduces the corresponding market demand of Airbus and Boeing. "The relative number of market share is not so important, the absolute number of new machine orders is the key." Qi Qi said.