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By Shubhangi Mathur, 3:55 PM ET
Boeing Co. revised jet demand forecasts on Tuesday. This comes as there is recovery seen in the commercial air travel industry after the pandemic--especially in domestic market.
Boeing forecast 43,610 commercial jet deliveries over the next 20 years--a dealworth $7.2 trillion. This is an increase of 500 units from the 43,110 jets forecasted last year.
For the next 10 years, the U.S. planemaker forecast 19,330 delivers, compared to 18,350 deliveries forecasted last year.
One of the strongest reasons for confidence is how quickly we have seen a bounce-back in domestic travel in the last 12 months, Boeing Chief Strategy Officer Marc Allen told reporters.
Boeing expects domestic flying to reach pre-crisis levels in 2022, and that regional and international traffic will reach that level by 2023 and 2024.
The company also raised the average annual global economic growth assumption to 2.7%, compared to 2.5% from last year's forecast.
Planemakers expect that due to environmental pressure, retirement of jets will be accelerated. This move is predicted to increase Boeing's profits. Analysts, though, warn of travel restriction due to unpredictable spread of the coronavirus variants.
The aerospace company forecasts demand for $9 trillion of goods and services, from freighters to fighters, compared to $8.7 trillion a year ago. The annual passenger traffic growth forecast by Boeing remains unchanged at 4%. Due to production problems, the deliveries of 787 jets are currently halted--which is a key source of cash for Boeing.
However, Boeing projects that they will have 32,660 deliveries of 737 MAX jets over the next 20 years, up from the previous 32,270. The 737 MAX has recently returned to service late last year after a safety ban of almost two years. This is yet another reason that Boeing updated their forecasts.
(With inputs from Reuters)