Supply and Demand for Air Transportation

Supply and Demand for Air Transportation
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Supply and Demand for Air Transportation Introduction Air transportation is characteristic of demand forecasts by the different industry players, such as airlines, aircraft manufacturers, airports, and other entities operating in the aviation sector. Forecasts of demand play a significant role in developing future plans for achieving sustainable growth and development objectives among firms operating in air transportation. For instance, the lead time and cost of developing and marketing new aircraft necessitate the long-term forecasts of air transport witnessed among aircraft manufacturers such as Boeing and Airbus. (Cook, 2017) Long-term forecasts allow aircraft manufacturers to develop their product strategies while also providing a framework for long-term business planning (Cook, 2017). Both Boeing and Airbus often develop their 20-year forecasts annually based on the different factors affecting the supply and demand for air transportation. Provided herein is a summary analysis of how the aircraft manufacturers develop their 20-year forecasts highlighting the identified factors affecting the supply and demand for air transportation as presented by each company. The paper further identifies the most important supply and demand factors based on the forecast for growth in air travel over the next 20 years for a selected world region. Airbus and Boeing 20-year Forecasts According to the 2022 Boeing Commercial Market Outlook (CMO) released on 16^th July, the aircraft manufacturer projects a demand of 41,170 units of new airplanes for the 2022-2041 period (Boeing, 2022). On the other hand, Airbus’ Global Market Forecast (GMF), released on 8^th July, projects demand for 39,490 new airplane units over the 2020-2041 period. Boeing’s projected deliveries will include 2,120 regional jets, 30,880 single aisle, 7,230 widebodies, and 940 freighter aircraft manufactured in the next 20-year period (Shparberg, 2022). Out of the 39,490 projected demand for Airbus aircraft, the company predicts that 31,620 will be single-aisle, with the widebody accounting for 7,870 units (Shparberg, 2022). In essence, the 20-year forecasts for both aircraft manufacturers highlight the projected demands for each aircraft brand. The projected demands for Boeing and Airbus aircraft in their 2022-2041 forecasts on demand are further broken down into different categories, including passenger and freight fleets. For instance, the Boeing 2022-2041 forecasts on demand project an 80% passenger fleet renewal over the 20-year period (Boeing, 2022). Airbus 2022-2041 projections also highlight increases in demand for freight fleets in the 20-year period. The 20-year forecasts by both manufacturers further highlight the market value for the projected aircraft demand. For instance, Boeing’s new airplane deliveries have a projected market value of $7.2 trillion, with the global fleet expected to increase by 80% through 2041 (Boeing, 2022). Airbus projects that new generation passenger aircraft will represent over 95% of its 20-year forecast (Shparberg, 2022). It is also important to note that both Boeing’s 2022 Comm...