Airbus raises outlook for global jet demand

Airbus expects airlines to order more aircraft than previously forecast over the next 20 years to replace less fuel-efficient planes, but said passenger numbers would not grow as fast as previously thought.

In its 20-year outlook published on Monday the European aerospace group raised its forecast for global deliveries of jets by all manufacturers to 39,490 from 39,020.

Roughly 80 per cent of the deliveries are expected to be for single-aisle aircraft, which typically serve short and medium-haul destinations, while 2,400 planes will be new and converted freighter aircraft.

The upward revision is partly the result of 2021 being taken out of the rolling 20-year forecast period. Last year was exceptionally weak for deliveries as the industry struggled to emerge from the pandemic, which led to the temporary grounding of most of the world’s fleet.

Airbus said it expected passenger traffic to grow more slowly than before, by 3.6 per cent per year rather than the 3.9 per cent forecast in November, as higher energy costs and the cost of carbon start to hit the sector.

“As energy prices become more expensive, whether we are talking about crude oil prices or carbon dioxide pricing or alternative fuels, there is a strong correlation between what is good for the environment and the fact that purely for operating costs, airlines are very, very motivated to require the latest, most efficient and lowest-emission aircraft,” said Bob Lange, head of business analysis and market forecast at Airbus.

Just 20 per cent of all aircraft currently in service are in the latest generation of fuel-efficient planes, such as Airbus’ best-selling A320neo family of narrow-body jets and Boeing’s rival, the 737 Max. However, this is up from 13 per cent in 2019.

The company still expects air traffic to recover to pre-pandemic levels some time between 2023 and 2025, amid ongoing pressure from soaring inflation as well as the risk of further outbreaks of variants of Covid-19.

Orders from Asia, which has driven demand for planes in recent years, are expected to be slightly lower than the previous Airbus forecast. China, however, still remains poised to overtake the US as the world’s busiest aviation market in the coming years.

The company’s assumptions include global economic growth of 2.6 per cent a year, and passenger and freight traffic growth of 3.6 per cent and 3.2 per cent a year respectively.