Airbus revises up jet demand

Airbus on Wednesday revised up forecasts for jetliner demand in the next 20 years led by growth in the new industrial hubs of Asia, while voicing alarm over rising protectionism.

That is slightly smaller than the future fleet Airbus had anticipated in a comparable forecast one year ago, as airlines squeeze extra productivity out of their aircraft by adding more and slimmer seats or using them for longer periods of the day.

But the demand for new jets needed to reach that total has been revised upwards because Airbus believes airlines will replace a greater proportion of aircraft than previously anticipated, mainly to take advantage of extra fuel savings.

Airbus said it now expects airlines and leasing companies to take delivery of 39,210 new passenger jets and freighters over the next two decades compared to 37,389 previously forecast.

Airbus expects 36% of these new deliveries to replace existing aircraft with the rest slated to meet growth in demand, with traffic expected roughly to double over the next 15 years.

Airbus however trimmed its forecast for average traffic growth to 4.3% a year from 4.4% in its previous report.

Recent airline industry statistics suggest traffic is growing but at a slower rate this year amid trade tensions.

But the industry also faces a squall of new pressures from trade tensions, the partial unwinding of globalization and an anti-flying campaign from climate activists, notably in Europe.

“Increased protectionism and other geopolitical risks remain a concern,” Airbus said in its Global Market Forecast.

Addressing an increasingly vocal debate on emissions, in a week that Swedish teenage climate change activist Greta Thunberg pressed the U.S. Congress for action on climate change, Airbus said the industry could still achieve carbon-neutral growth while connecting more people due to more efficient planes.

Airbus revised up its demand forecast for the industry’s most-sold single-aisle jets by 4% to 29,720 planes but cut the medium segment including its A330neo by 2% to 5,370.

Airbus raised its 20-year forecast for after-sales services like maintenance, pilot training and cabin upgrades to $4.9 trillion from $4.6 trillion.

Once focused mainly on building and delivering their jets, Airbus, Boeing and other plane manufacturers are stepping up competition with their own suppliers and customers for a slice of this market, which is driven by the size of the global fleet./investing

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