AIR Airbus SE

By Doug Cameron 

Boeing Co. said the coronavirus pandemic will reduce global jetliner demand by around 2,000 planes over the next decade as people around the world remain wary of air travel.

The company said in its annual market forecast on Tuesday that the coronavirus pandemic would likely curb the global aerospace industry's sales by $200 billion through 2029. That figure is equivalent to less than two years' worth of combined Boeing and Airbus SE aircraft deliveries at pre-pandemic levels.

The forecast is the first from a major aircraft maker since the pandemic drove a slump in airline travel that halved passenger traffic, triggering thousands of job cuts and upending a decadelong surge in jetliner demand. The International Air Transport Association, a trade group, said Tuesday that global airlines are burning through $13 billion in cash a month.

Boeing shares were down about 3% to $165.70 in midafternoon trading Tuesday.

Boeing trimmed the value of aircraft and aviation services to $8.5 trillion over the next decade as it cut the number of expected aircraft deliveries in its annual 20-year forecast for the first time since the global financial crisis a decade ago, reducing its outlook for annual global traffic growth to 4%.

Boeing and Airbus have cut production rates sharply as the pandemic left airlines and leasing companies unable or unwilling to accept many of the new planes ordered in recent years.

The U.S. company forecast demand for 18,350 aircraft through the end of 2029, down 11% from its estimate a year ago as airlines focus on replacing older planes and pare back expansion into new markets. Boeing expects demand for over 44,000 planes through 2039, down 5% from its prior forecast.

The pandemic-driven shock has led airlines to retire hundreds of older jets earlier than planned, which Boeing said would lead to a bigger share of new deliveries in the next few years for replacing them rather than growing the business.

The pandemic has hit demand for long-haul jets particularly hard as a patchwork of government restrictions and quarantines have left international air travel volume down 90% from a year ago.

Boeing expects an eventual recovery in the business-class travel that is crucial to airline profitability, which had all but disappeared as companies kept employees at home and quarantines made short trips impractical.

"We do see business travel recovering, even in the long-haul market," Darren Hulst, Boeing's vice president for commercial marketing, told reporters.

Some industry leaders such as Delta Air Lines Inc. Chief Executive Ed Bastian have said they don't expect business travel to ever return to pre-pandemic levels.

Boeing also doesn't expect airlines to reverse the trend of adding more seats to aircraft to boost revenue, even as the pandemic drove some carriers to block seats to promote social distancing.

"We don't see a change in seating density as a result of the virus," said Mr. Hulst.

Boeing expects global economic growth to return the airline industry to expansion mode in the 2030s, albeit at a slower pace than the boom that led airlines to amass orders for more than 13,000 jets.

The latter half of the 20-year forecast period assumes plane makers introduce new jet models, which typically spur sales, said Mr. Hulst. Boeing and Airbus haven't announced any new planes, though analysts expect both will have to replace their bestselling single-aisle jets, partly in response to tougher environmental regulations.

Airbus, which reclaimed its position from Boeing as the world's largest jetliner maker last year, said it had no immediate plans to provide a new forecast, given widespread uncertainty over the airline industry's recovery.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

October 06, 2020 15:09 ET (19:09 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.