What Do The Events At The Dubai Airshow Say About The Global Commercial Aircraft Market?

+34.15%
Upside
193
Market
259
Trefis
BA: The Boeing Company logo
BA
The Boeing Company

The much anticipated Dubai Airshow came to a close Friday. Airshows of the likes are usually an opportunity for aircraft manufacturers – big or small – to seal the deal on long order negotiations with airlines and leasing companies. While Embraer and Bombardier were battling each other out in the regional jet market, Boeing (NYSE:BA) and Airbus went head to head in the long haul aircraft market. In the end, Airbus managed to outdo Boeing, raking in orders worth (in list prices) $52.7 billion, while Boeing fell short marginally, recording orders worth $47.6 billion.

However, the most important news coming out of the airshow had little to do with the order battle between the two giants. Considering that a huge proportion of the deals sealed in the event were commercial in nature, we can safely conclude that the global market for commercial jets is on the rise once again.

Over the last year, and beginning of this year, new commercial orders had fallen considerably as airlines slowed purchases, after years of record buying. The weak economy forced air carriers and governments to delay or cancel orders for new aircraft. Additionally, jetliners built more than 20 to 30 years ago were still flying regular routes having been refurbished multiple times. Historically, orders from airlines have been cyclical in nature and it appeared that the market was going through a prolonged slump back then. However, this trend seems to finally be changing.

Relevant Articles
  1. Should You Pick Boeing Stock At $190?
  2. Having Lost 15% So Far This Year, Is Boeing Stock Undervalued At $210?
  3. Will Boeing Stock Recover To Its Highs of Over $250?
  4. Following A 39% Rise This Year Is Boeing Stock A Better Pick Over Caterpillar?
  5. Is Boeing Stock Undervalued At $190?
  6. Here’s What To Expect From Boeing’s Q2

In this respect, earlier in June, Boeing released its global market outlook for commercial jets. In the report, the company raised its 20 year forecast for global commercial aircraft demand by 3.6%. The largest aircraft manufacturer now predicts that there will be a requirement for more than 41,000 new planes worth about $6 trillion between 2017 and 2036, globally. Furthermore, at the airshow, Boeing reported its 20 year forecast for the Middle Eastern region. In it, the company highlighted that demand for commercial jets in the region will be around 3,350 new planes, worth close to $730 billion.

Overall, we are witnessing a heavy rise in commercial passenger and freight traffic, driven primarily by demand in emerging markets. Keeping in account these improving statistics and the aforementioned discussion, it seems very plausible that commercial aircraft manufacturers have witnessed the end of the slump. We can expect orders to rise at a notable pace going forward.

View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research