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DECEMBER 2009 AUSTRALIAN AVIATION
that are operating in different business
models than they were a few years ago."
e rise of the low cost carrier has been
particularly important says Tinseth, who
notes that low cost carriers are currently
growing in every major region of the world
bar the US. And airlines in China and
Latin America are also growing.
" ey're clearly helping us as we go
through this cycle."
Fuel prices too have helped to keep the
backlog stable, says Tinseth. "Airlines, in
this push to become more efficient, have
retired their older, less efficient airplanes
and replaced them with new aircraft."
Tinseth's longer term optimism is under-
pinned by the long term outlook of Boe-
ing's Current Market Forecast, something
it has produced annually for 45 years.
"We do a (fleet planning) forecast for
about 150 different airlines and airline
groups, we look at 40 different traffic flows.
Fundamentally a forecast should be seen as
a rather simple process, you forecast traffic
growth, you try look at your customers and
see how they'll develop their networks...
But you have to look at fuel prices, economic
growth, you have to consider liberalisation,
what will happen in emerging and develop-
ing markets, will the infrastructure be there,
how much more productive will airplanes
be in 20 years compared to what they are
today, we have to do some things in terms
of (modelling) airplane development and
capabilities. It's a rather complex process."
e forecast is important in informing
Boeing's product development strategy,
provides important information to suppli-
ers, and is a very useful source of intelli-
gence for airlines, Tinseth says.
In the current forecast Boeing expects
Oceania air travel growth for the next two
decades will be above five per cent, com-
pared to a world average growth of 4.9
per cent. at will drive demand for 670
new commercial aircraft to be delivered to
operators in the region up to 2028, with
67 per cent of commercial airliners to ac-
commodate growth and the remaining 33
per cent for fleet replacement. Of those,
63 per cent (ie 420) are expected to be
narrowbodies, 30 per cent (200) twin aisle,
six per cent (or 40) large aircraft and just
one per cent regional jets.
It is interesting to note that rival Airbus's
forecasts for the region don't differ that
greatly. In early November Airbus chief
operating officer -- customers John Leahy
was in Australia to talk about the Euro-
pean airframer's Global Market Forecast.
It predicts that airlines in Australia, New
Zealand and the Pacific Islands will acquire
631 new aircraft valued at US$87bn
(A$96bn) between now and 2028.
Airbus forecasts that revenue passenger
kilometres will grow by five per cent over
the next 20 years, higher than the 4.7 per
cent it predicts for global growth. Con-
sequently, 360 aircraft will be required
to accommodate this growth, while 271
will replace existing aircraft. By segment,
Airbus sees demand for 399 single-airline
aircraft, 172 twin aisle widebodies and 60
very large aircraft.
Interestingly, with Air New Zealand
retiring its 747s, Qantas will soon be the
region's only 747 operator, so in effect
Airbus is forecasting Qantas will eventually
buy 60 A380s (it has 20 on order to date),
Boeing 40 (given Qantas's public rejection
of the 747-8).
It's probably no great surprise that Boe-
ing's and Airbus's forecast for very large
airliners differ markedly.
"Frankly, now they've been selling the
A380 for nine, almost 10 years, and they've
sold 200 airplanes, so I think the market
size (question) has really been answered."
Certainly both Boeing and Airbus fore-
cast that the main game, at least as far as
volume is concerned over the 20 years, will
be the narrowbody 737/A320 series and
their eventual replacements.
"My guess is it (the 737 replacement)
will be (broadly conventional). Of course
we have to consider as we go forward how
we might incorporate an unducted fan
type of design into that airplane, because
essentially when we look at the single aisle
market over the next 20 years, you're talk-
ing about demand for 19-20,000 airplanes.
So you absolutely have to make sure that
whatever airplane you bring to the market
is the best possible airplane it can be.
" e last thing we can have is an airplane
that comes to the market and then two
years later gets trumped in terms of tech-
nology. So we have to make sure we look
at all the technologies that are available,
and we have to make sure that we make
the decision at the right time to replace the
airplane with the right technology.
"Customers are being very demanding,
and I don't blame them, because they want
the best possible airplane, but when you
take a look at all their requirements, and
you take a look at the technology that we
have today, it's just not there. So we have to
have a robust technology plan so sometime
later in the next decade we have those
technologies available for us when we need
to make the step to replace the airplane."
With the technology seemingly some way
off for a step change improvement from an
all-new single aisle aircraft, that opens up
opportunities for re-engining the 737.
"As a manufacturer we have to be looking
at all possible things at all times in terms
of product improvements, and clearly re-
engining that airplane (the 737) at some
point in the future has got be something
we're looking at, and we are."
e other dynamic is new competitors,
from Bombardier's CSeries to potentially
the Chinese with the Comac C919, or Em-
braer with a new offering. "We'll have new
players, there's no question about it."
But the more immediate issue for Boeing
is flying and delivering the much delayed 787.
" ere's no question that these delays
are hurting our customers, and impacting
our customers has been very, very difficult
for all of us at Boeing, recognising it's
probably more difficult for our customers,"
"So there's no question in my mind
that our credibility has been hurt, and the
fact is you don't regain your credibility
overnight. It's a slow process taken step by
step, showing and demonstrating perform-
ance over a long period of time. So the
best way for us to gain that credibility is to
fly the airplane, to get through a success-
ful flight test program, begin delivering
and then slowly but consistently raise your
production rates to meet the requirements
that your customers require."
GROWTH MARKET Boeing predicts Australia/NZ/South Pacific traffic will grow five per cent per year over
the next 20 years. (Seth Jaworski)
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