The Business Times

Boeing big on region for commercial, defence planes

It sees additions to fleets dominated by single-aisle planes in Asia-Pacific

Published Mon, Feb 10, 2014 · 10:00 PM
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[SINGAPORE] Boeing is bullish on prospects in the region, both on the commercial and defence fronts, it told the media here yesterday.

On the commercial end, Boeing is forecasting the need for 12,820 new airplanes worth US$1.9 trillion by 2032, making up 36 per cent of the world's new airplane deliveries.

Asia Pacific's fleet itself is slated to nearly triple, from 5,090 airplanes in 2012 to 14,750 in 2032.

This surge in demand will be supported by an estimated annual growth rate of 3.2 per cent for the global economy over that period. At the same time, world air travel is expected to grow at about 5 per cent annually.

This year alone, Boeing is guiding for a delivery of 715-725 aircraft, at least 110 of which will be the 787 Dreamliner. This represents almost a doubling of 2011's delivery of 477 airplanes, Randy Tinseth, vice-president of marketing for Boeing Commercial Airplanes, pointed out at a media briefing yesterday at the Ritz-Carlton Hotel.

To meet demand, Boeing will continue ramping up production rates, Mr Tinseth said. Currently, its 737 lines build 38 airplanes a month. By the middle of this year, this will be increased to 42 and by 2017, it will be expanded further to 47 airplanes a month.

In the Asia-Pacific region, the new additions to airliners' fleets will be dominated by single-aisle airplanes, by Boeing's estimates. This will be driven by the presence of new low-cost carriers and demand for intra-Asia travel.

The company's optimistic view of the next two decades comes on the back of a triumphant 2013. For the first time, more than 3 billion people travelled by air last year, while the sector as a whole sold more than 3,800 new airplanes in gross orders, Mr Tinseth noted.

On the defence end of things, Boeing Defense, Space & Security (BDS) expects a modest increase in defence spending given the region's projected economic growth rate and the stability of defence budgets, its executives told the press at a separate briefing yesterday. This is enough cause for bullishness given how markets elsewhere might stay flat or even decline.

"Some of the systems that have been in the region are ageing and they require some form of modernisation, so there's a lot of discussion about how to upgrade or make the case to retire and buy new (assets)," said Chris Raymond, vice-president of business development and strategy at BDS.

In the Asia-Pacific region, a lot of attention is being paid to maritime surveillance, according to Jim Armington, East Asia and Pacific vice-president, international business development at BDS.

"That's driven not only by the rise of the economic activity in the region, but also a lot more surface traffic. And a lot more means that the countries have to monitor and track maritime surface activity," he said yesterday.

Asked about interest in Boeing's P-8 maritime surveillance aircraft in Southeast Asia, Mr Raymond said: "There are two or three countries we are talking to about it. Where it will fit in their priorities will be up to them, but these things take time."

At the same time, another major area of interest for the region lies in the field of air supremacy and airspace sovereignty.

"You will see more interest in fighter and fighter upgrades. (There is) a lot of capability nowadays in our latest F-15s. We're able to come back and retrofit into existing fleets to greatly enhance the aircraft," Mr Armington said.

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