Higher Frequencies, Smaller Aircraft Will Dominate Next 20 Years

World Airline News, June 19, 1998

Airline growth over the next 20 years will continue to come from added frequencies using smaller aircraft, according to Boeing's [BA] 1998 Current Market Outlook released yesterday. The report was delayed about two months because the crisis in Asia complicated Boeing's ability to predict numbers that it felt were accurate.

About 50 percent of traffic worldwide operates in a liberalized environment and airline strategies have evolved to survive that cut- throat competition, said Bruce Dennis, Boeing Commercial Airplane Group vice president of marketing. In developing its forecast, "one of the things we really noticed is that all these airlines are geared towards more frequencies. Travelers want more options on where they can go and when they fly. That determines the type of aircraft we will produce." Over the past ten years, said Dennis, 82 percent of all capacity growth has come from added frequencies - 38 percent from airlines operating new frequencies in new non-stop markets and 44 percent in existing city pairs. Out of every 10 aircraft delivered over the next two decades, seven will be single-aisle planes, accounting for 43 percent of all dollars invested in new aircraft. The only force Boeing sees potentially counteracting the tendency to smaller aircraft is congestion at airports such as Chicago O'Hare, London Heathrow and Tokyo's Narita. One of the strongest areas of growth will be Latin America. Boeing revised its growth forecast for that region upward almost 1 1/2 percent since last year. Dennis pinpointed Mexico, Brazil and Argentina as the three countries that are "really driving a lot of growth in Latin America." Boeing's Current Market Outlook is now available on the world wide web at http://www.boeing.com/commercial/cmo/index.html or you can receive it from World Airline News.