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Ayşe Akalın

Boeing’s Commercial Market OUTLOOK REPORT

Issue 10 - 2022
Boeing’s Commercial Market OUTLOOK REPORT

Forecast of Aviation Market for Next  20 Years & Activities in Turkey

Boeing has had a strong, long-standing partnership with Turkey for more than 70 years. It supports both airline operators with commercial          jets and the government with defense platforms. Boeing Turkey General Manager and Country Representative Ayşem Sargın and Boeing Commercial Airplanes Turkey Marketing Director Keith Nida held a press conference to inform ‘Commercial Market Outlook’ report focused on current situation and forecast of aviation market for next 20 years and Boeing activities in Turkey

Aviation sector showing signs of recovery and resilience

While health and regulatory dynamics will continue to shape the near-term Boeing's analysis of market dynamics shows that commercial airplanes and services are showing signs of recovery and resilience. Availability and distribution of COVID-19 vaccines will continue to be critical factors in recovery of passenger air travel. Countries with more widespread vaccination distribution have shown rapid air travel recovery, as governments ease domestic restrictions and open borders to international travel.

Keith Nida, Boeing Commercial Airplanes Turkey Marketing Director gave a briefing about Current Market Outlook report.  He mentioned that demand for domestic air travel is leading the recovery, with intra- regional markets expected to follow as health and travel restrictions ease, followed by long-haul travel's return to pre-pandemic levels by 2023 to 2024.

According to the Boeing Commercial Market Outlook, more than 700 older aircraft in Europe’s fleet will retire in near term. Fleet renewal provides significant cost savings (3.1B usd/year), fuel savings (1,7B usd /year) and environmental benefits (CO2 reduction 6,5M tonnes per year). 

Keith Nida stated that Turkish airports have become the busiest in Europe during pandemic. 

Historically, short-haul travel has been stimulated through improved offerings such as new direct routings and lower fares via low-cost carriers. That trend is expected to continue, particularly within emerging markets, where large shares of the population have not flown before. In the forecast, travel within regions accounts for more than half of industry total growth requirements, with intra-China travel alone accounting for 17% of new capacity produced by the industry.

8,700 new aircraft will be needed between 2021 and 2040 in Europe. This is 20 percent of global demand. European network airlines leverage single-aisle versatility serves range of market needs. 

Long term, market fundamentals and resilience drive demand through 2040 for more than 43,500 new airplanes valued at $7.2 trillion. Boeing forecasts the global commercial fleet will surpass 49,000 airplanes by 2040. China, Europe, North America and other Asia-Pacific countries each account for about 20% of new airplane deliveries, with the remaining 20% going to other emerging markets.

The Boeing CMO 2021 freighter fleet forecast incorporates near-term cyclical disruptions and long-term structural impacts we anticipate will impact air cargo markets. This assumes the current dynamics of constrained widebody passenger belly capacity will dissipate into the long term, and air cargo will then reflect market dynamics closer to those seen in the years prior to the COVID-19 pandemic. 20-year traffic growth (2021–2040) is forecast to be 4.6%, reflecting low base year effects due to the pandemic-induced traffic reduction estimated at 9% in 2020. The 21-year traffic growth, using 2019 as a baseline, remains at our previous growth forecast of 4.0% (2020–2039). In 2040, the world’s freighter fleet will grow from ~2,000 units in 2019 to ~3,400 units, an increase of 70% over the pre-pandemic fleet. This long-term fleet growth will be powered by GDP growth, industrial production and replacement demand. Near-term air cargo market demand has been boosted by increased e-commerce, supply chain disruptions, severe maritime interruptions, economic recovery and the previously mentioned widebody passenger capacity loss. This boost is reflected in total air freighter unit demand that sees somewhat higher demand in the first decade of the forecast.

Boeing presence in Turkey focuses on strong and long-standing partnership

Ayşem Sargın , Boeing Turkey General Manager and Country Representative  enlightened the press about Boeing activities and strategies in Turkey  focused on industrial, technological partnerships  along with commercial aircraft marketing.

In 2017, Boeing and Turkey launched the National Aerospace Initiative (NAI), a strategic partnership that contributes to both the growth of Boeing in Turkey and the growth and competitiveness of Turkey’s aerospace sector, in conjunction with targets set by Turkey’s Vision 2023. NAI focuses on four key pillars of collaboration: Industrial Development, Technology Acceleration, Services Collaboration and Advanced Skilling.

NAI aims to support industrial capability development, broaden supply base and improve bid win rate among Boeing suppliers in Turkey. The Supplier Development Program (SDP) is a key NAI component, which includes industrial training, assessment, mentoring and development activities. This program envisions a greater share for the Turkish aerospace industry in Boeing’s global aerospace supply chain.

In the last 10 years, purchases from Turkey have reached 2 billion dollars. Boeing makes purchases of 200 million dollars annually from suppliers in Turkey. It works with more than 20 suppliers in Turkey. 4 companies became a Boeing approved supplier last year.

TUSAŞ and Kale Aero are among Boeing's major suppliers of structural parts in commercial aviation programs and have been taking part in all Boeing commercial aircraft programs since 1997. TCI and TSI are also Boeing's major supplier of cabin interior products, and Boeing is partnering with these two companies to reach markets outside of Turkey.

NAI aims to grow Boeing’s engineering and technology footprint in Turkey. In this framework, the Boeing Turkey Engineering and Technology Center opened in Istanbul in December 2018. The center develops technologies that Boeing adopts globally and partners with local universities while adding to the existing engineering capabilities in Turkey, bringing the country closer to its target to become a global player in aerospace.

NAI aims at positioning Turkey as a regional hub expanding Boeing partnerships with Turkish maintenance, repair and overhaul (MRO) providers to service the global Boeing fleet. With the signing of the Global Fleet Care Agreement in 2018, Turkish Technic was positioned as a strategic regional supplier for Boeing for airplane line maintenance and heavy maintenance as well as component services and repair.

NAI aims to deliver training programs for strategic skills critical to Turkey’s fast-growing aerospace sector. Boeing’s simulator investment for expanded flight training capacity in partnership with Turkish Airlines (THY) is a key initiative. Another major partnership includes the joint master’s program in aerospace structures and materials that Boeing launched with Istanbul Technical University (ITU) and Turkish Aerospace in 2019.

These investments constitute the foundation of a long-term, successful partnership between Boeing and Turkey as the company continues to expand collaboration with world-class partners in industry, services, engineering and academia in the country.

Partnering with several universities and companies in Turkey to foster aerospace i novation Boeing has invested more than $2 million in research, technology and technical aerospace education in Turkey. Boeing currently has eight technical partnership programs in Turkey focused on aerospace technologies, including joint research and technology projects as well as engineering and technical education initiatives.

Boeing and Turkish Airlines share a long history that began in 1945 with the arrival of Turkish Airlines first DC-3/C-47 airliners. Turkish Airlines entered the jet age in the late 1960s, when the airline began operating DC-9, DC-10 and Boeing 707 airplanes. Over the years, Turkish carriers have also flown 727, 757,MD-80 and, of course, modern 737 and 777 airplanes. Boeing has also developed mutually beneficial relationships with key customers in Turkey such as Sun Express (the joint venture of Turkish Airlines and Lufthansa) and Pegasus Airlines.

Turkish Technic, a subsidiary of Turkish Airlines, is a world-class maintenance center for the 737, with certifications from regulatory authorities throughout the region and beyond. The Global Fleet Care agreement with Turkish Technic has positioned the Turkish Airlines maintenance arm as a regional MRO provider for Boeing aircraft. Boeing has also partnered with THY Flight Academy on a pilot training program and invested in simulator training capability in the Turkish Airlines Flight Training Center in Istanbul 

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