Boeing cuts forecasts for first time in 10 years

Boeing has trimmed its forecast for new plane order for the first time in 10 years due to the global downturn severely denting both consumer and cargo demand.

The Seattle-based aviation giant expects 29,000 commercial planes to be ordered over the next 20 years, with a market value of $3.2 trillion, down from its forecast of 29,400 last year.
Randy Tinseth, Boeing’s vice president of marketing, said the company was concentrating on keeping its order backlog rather than winning new business.

“The downturn has had a significant impact,” he said. “It’s more about keeping backlog in place than selling new airplanes. The highest priority is keeping the 3,500 planes we have on backlog.”

Boeing has had 65 new orders and 65 cancellations so far this year.

Earlier in the week the IATA downgraded its forecast for the aviation industry, saying globally they would lose $9bn in 2009.

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Boeing’s growth forecasts for air traffic were reduced slightly, down to 3.1 percent from 3.2 percent, showing the airline industry will be relatively resilient once the current downturn is over. The biggest casualty will be cargo, with Boeing cutting its 20-year growth forecast to 5.4 percent from 5.8 percent last year.

The forecasts predict that by 2028, Asia Pacific will have taken over from North America as the biggest air travel market, growing at an average 6.9 percent annually over the next 20 years, compared with 2.5 percent in North America and 3.4 percent in Europe.

Mr Tinseth also acknowledged Boeing had overestimated demand for large planes at that time. Its delayed 787 “Dreamliner” has yet to make a test flight.

Boeing expects replacement planes to account for 42 percent of the planes ordered in the next 20 years, and new orders the remaining 58 percent.
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