Aerospace and military market forecasted at $8.7 trillion through 2028 by Boeing

June 19, 2019

John M. McHale III

Editorial Director

Military Embedded Systems

PARIS AIR SHOW. Strong commercial aviation industry, Steady military spending combined with a growing commercial aviation sector promises growing aerospace and defense market, according to the Boeing Market Outlook (BMO), released this week at the Paris Air Show. Boeing experts forecast the market values at?$8.7 trillion?over the next ten years, up from?$8.1 trillion?a year ago.

The report also describes a $3.1 trillion projected demand for commercial airplanes through 2028 as operators replace older aircraft with more fuel-efficient models, and grow their fleets to meet the steady rise in air travel across emerging and established markets.

The BMO also forecasts $2.5 trillion of military and space opportunities during the next decade as nations modernize their military platforms and systems, pursue new technologies and capabilities and speed up exploration from sea to space. The projected spending – spanning military aircraft, autonomous systems, satellites, spacecraft, and other products – will continue to be global with 40 percent of expenditures expected to originate outside of the United States.

Supporting the defense, space and commercial platforms with lifecycle solutions will fuel a services market valued at $3.1 trillion through 2028.

"Aerospace and defense continues to be a healthy and growing industry over the long term, boosted by strong fundamentals across the commercial, defense and services sectors and demand that is geographically-diverse and more balanced between replacement and growth than ever before," says Boeing Chief Financial Officer and Executive Vice President of Enterprise Performance & Strategy Greg Smith.

Boeing's 2019 Commercial Market Outlook (CMO), a longer-term forecast that delves deeper into the market for commercial airplanes and services, forecasts that growing passenger volumes and increasing airplane retirements will drive the need for 44,040 new jets, valued at about $6.8 trillion over the next 20 years and up 3 percent last year. The global commercial airplane fleet will also sustain the need for aviation services valued at $9.1 trillion, leading to a total commercial market opportunity of $16 trillion through 2038.

"We see a market that is broader, deeper and more balanced than we have seen in the past," says Boeing Commercial Marketing Vice President Randy Tinseth. "The healthy market fundamentals will fuel a doubling of the commercial fleet over the next two decades and a massive ecosystem of lifecycle solutions to maintain and support it."

Of the new airplane deliveries, CMO forecasters say 44 percent will go toward replacing aging aircraft while the rest will meet traffic growth. Combined, the new jets support an industry where passenger traffic will grow an average 4.6 percent and cargo traffic will grow an average 4.2 percent. Factoring in the new airplanes and the jets that would remain in service, the global commercial fleet is forecasted to reach 50,660 airplanes by 2038. This would be the first time the projected fleet has crested the 50,000 mark.

The biggest airplane segment remains single-aisles such as the 737 MAX, as operators are projected to demand 32,420 new airplanes. This $3.8 trillion market is driven mostly by the continued strength of low-cost carriers, healthy replacement demand, and continuing growth in Asia Pacific.

In the widebody segment, Boeing forecasts demand for 8,340 new passenger airplanes valued at more than $2.6 trillion over the next two decades. Widebody demand is due in part to a significant wave of older airplanes that will need to be replaced beginning in a few years. Bolstering the demand for larger aircraft, operators are expected to need 1,040 new large production freighters over the forecast period.

The global airplane fleet will continue to generate significant demand for aviation services, including supply chain support (parts and parts logistics), maintenance and engineering services, aircraft modifications and airline operations. Over the next 20 years, Boeing experts forecast a $9.1 trillion market for commercial aviation services with annual growth of 4.2 percent.

Major categories in the services forecast include the $2.4 trillion market for maintenance and engineering, which covers tasks required to maintain or restore the airworthiness of an aircraft and its systems, components and structures. Another is the $1.1 trillion market for flight operations, which details services associated with the flight deck, cabin services, crew training and management, and airplane operations.

The Asia Pacific region, which includes China, will continue to lead the way in future growth, making up 40 percent of total airplane deliveries and 38 percent of total services value. North America and Europe round out the top three regions for future growth.

Globally, the growing commercial fleet will require a larger supply of pilots, technicians and crews. Boeing's 2019 Pilot and Technician Outlook forecasts that the civil aviation industry will need nearly 2.5 million new aviation personnel between now and 2038.

The CMO and other Boeing market forecasts can be found at https://www.boeing.com/commercial/market/.

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