Aircraft manufacturer Boeing (NYSE:BA) revised its 20-year outlook for global jet demand to reach 42,595 by 2042, valued at $8 trillion, up from its initial forecast of 41,170 jet planes. Boeing expects most of the demand to come from narrow-body jetliners used by low-cost air carriers. These single-aisle jets will reach a combined demand of 32,420, both from Boeing’s 737 Max as well as rival Airbus’ (OTHEROTC:EADSF) A320neo families, the company said.
Boeing’s Darren Hulst, VP of commercial marketing, made the announcement ahead of the Paris Airshow hosted on Sunday, June 18. Having said that, the revised estimates remain well below the 2021 forecast of 43,610 jet deliveries, which also included aircraft demand from Russia. Hulst also noted that the larger airplanes can be 20% more efficient by adding more seating patterns and remaining airborne for larger durations.
Other Details About the 20-Year Outlook
The revised estimates of deliveries also include 7,440 wide-body jets, 1,810 regional jets, and 925 fighters. As per Hulst, half of the deliveries from now until 2042 will be for replacing older planes, while the other half will increase the air carriers’ fleets. The overall demand for jets has played out much more in tandem with expectations, Hulst added, with minor alterations such as a subdued demand for regional jets than previously expected. Governments worldwide are pushing for carbon emission control, which is resulting in lower demand for short-distance air travel (less than 500 miles) and, thus, a subdued demand for regional jets.
Additionally, Boeing has increased its projected growth rate for industrywide passenger traffic from 3.8% to 4%. This adjustment reflects a positive outlook for the aviation industry. On the other hand, growth in air cargo demand is expected to remain subtle, around the current run rate of between 3.5% and 4%.
On the regional front, Boeing expects China to contribute 20% of the market and the rest of Asia to add another 22% of demand. Based on the revised estimates, the global aircraft fleet is expected to reach roughly 48,600 by 2042, up from the 24,500 planes used in 2022.
Is Boeing a Good Buy Right Now?
Wall Street remains cautiously optimistic about Boeing stock. Recently, Barclays analyst David E. Strauss assigned a Hold rating on BA stock with a price target of $210, implying 4.5% downside potential from current levels. Overall, the stock has a Moderate Buy consensus rating based on ten Buys and five Hold ratings. Also, the average Boeing price target of $238.40 implies 8.4% upside potential from current levels. Year-to-date, BA stock has gained 12.6%.
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