boeing paper demand forecasting pdf

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  Zach Dantzer Opre 3310 Terence Egan Boeing has one of the longest published and most accurate demand forecasts in the commercial airline industry. In general, Boeing predicts that demand for it’s products will remain robust, continuing the trend from the past few decades. Some of the factors that go into this analysis are strong economic growth, a growing middle class, and increasing consumer spending on services. Thus, Boeing predicts that the industry will require roughly 42,000 new airplanes by 2037, mostly being single aisle airplanes. The airline industry is projected to be two and a half times larger by 2037, and the global commercial jet fleet will double in size by that same year. Forecasting long term demand requires a few assumptions and predictions about the major trends and drivers that will shape the future of the airline industry. Boeing identifies three key dimensions of the environment that shape this future: the underlying demand for air travel; the regulatory, infrastructure, and technology development; and the strategies and products airlines offer in the marketplace. Fortunately, the year over year travel growth for the past 5 years has averaged 6.2 percent. The global airline industry has had 8 years of continuous growth, and airlines are delivering very strong levels of financial results. In the past year alone, the airline industry generated more than 30 billion dollars in profits. In terms of airline deliveries, 56% of those are needed to accommodate growth in the marketplace, and the remaining demand will replace more  than 75% of the existing fleet, with an estimated 19,000 commercial airplane deliveries over the next 20 years. For the North American market in particular, airplane utilization has improved, and load factors remain at near record highs. Although there was a slow downturn during the 2008 recession, the market has been improving a lot over the past 10 years. In fact, America has captured more than 56% of global industry profitability in the last 5 years. For America, it’s a more mature market, and the future delivery forecast mostly consists of replacements of existing airplanes. In fact, 64% of all total forecasts for America are in this category. Also, single aisle airplanes make up two thirds of anticipated growth. In addition, the segment for wide-body aircraft is showing strong growth, with a two and a half fold increase in the last five years compared to the previous five years. Interestingly, this is only a small segment, so smaller twin-aisle style aircraft make up a larger portion of growth percentage wise. For the air cargo market, after several bad years it seems to have made a full recovery. Year over year growth for 2017 was 10%, making it the best year since 2010. One of the biggest factors for this growth has been the rise of e-commerce, since air cargo plays a vital role in transporting goods. All in all, Boeing has an incredibly good demand forecast, and it is very easy to see why it has become the industry standard. I was easily able to download detailed statistics and forecasts, and their website has an absolute wealth of data.  Sources:  Product & Service Design Boeing has a very interesting history as a company with regards to product and service design. They have been active since 1916, and have made countless airplanes over the years. Similar to Apple, Boeing constantly innovates and improves their production and design pro-cesses, getting ever more efficient. Boeing doesn't have one “flagship product,” but instead has a large variety of products for different markets. Examples include the commercial market, the de-fense market, and the space market. Each market has a different purpose, and Boeing has differ-ent product design processes because of that. For example, take the Boeing 787. I want to explore how the 787 was generated, de-signed, and manufactured for the commercial market. First off, the 787 was initially designed to replace the 767, a common plane previously used. Sales were slowing, so Boeing considered re- placement aircraft programs. Though there were a few previous projects in the interim, the 787 eventually won out. The 787 was 20% more fuel efficient than the 767, and was built to be a top of the line consumer airline. Because it had higher fuel efficiency than any other Boeing plane at the time, that meant it had lower operating costs, leading to much more revenue for the airlines that flew it. According to Boeing’s website, it also costs 30% less to maintain due to the new carbon fiber composites they use in the fuselage, leading to less wear and tear. Instead of having multiple aluminum sheets and the roughly 50,000 fasteners used with traditional aircraft design, Boeing


Dec 2, 2018
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