LONDON - Boeing forecasts a $3.2 trillion market for new commercial airplanes over the next two decades, driven by an increasing demand for airplanes to replace older, less efficient aircraft.

KGW

On Wednesday, The Boeing Company released its 2008 Current Market Outlook, which is the company's 20-year forecast of air travel.

The outlook calls for a market of 29,400 new commercial airplanes (passenger and freighter) by 2027.

The company says single-aisle airplanes will make up the bulk of the deliveries during the next 20 years. Strong domestic and intra-regional air travel growth in emerging Asia-Pacific markets, along with continued growth of low-cost carriers worldwide is driving demand in this segment.

"We're seeing an increasing share of airplane deliveries to the Asia-Pacific region, as well as the Middle East, Latin America, and the Commonwealth of Independent States," said Boeing Commercial Airplanes Vice President, Marketing Randy Tinseth. "The result is a much more geographically balanced and more stable long-term market, which is less vulnerable to swings in regional economies or other variations in demand."

The influence of current market conditions is reflected in the 2008 outlook, with replacement airplanes taking a greater share of demand (43 percent) than previously forecast (36 percent) -- due to the loss of economic viability of older aircraft in light of higher fuel costs.

In addition, Boeing is forecasting a slightly smaller fleet size at the end of the 20-year period (35,800) than predicted in the previous outlook (36,400). Compared with today's world fleet of 19,000 units, this represents an annual increase of 3.2 percent per year -- the same as the estimated economic growth rate.

Over the next 20 years, passenger and cargo airlines will take delivery of:

- Regional Jets: 2,510 units ($80 billion)

- Single-Aisles: 19,160 units ($1,360B)

- Twin-Aisles: 6,750 units ($1,470B)

- 747 and larger: 980 units ($290B)

The new airplanes will accommodate a forecasted 5 percent annual increase in global air travel, and a 5.8 percent annual increase in air cargo traffic.

"We're facing a very dynamic situation today in the commercial aviation industry," said Tinseth. "This year's forecast is rooted in today's realities, but also recognizes the nature of a long-term outlook."