Notwithstanding the existence of “significant headwinds” such as terrorism, the rise of populism and continued stagnation of trade and cargo markets, Boeing’s 2017 current market outlook (CMO) shows a demand for 41,030 airplane deliveries worth more than $6 trillion over the next 20 years. The forecast differs little from last year’s CMO, despite wide variations in economic growth, volatile exchange rates and increased geopolitical uncertainty.

In fact, Boeing’s expectation for this year’s growth in passenger traffic of 5.5 to 6 percent exceeds that of the International Air Transport Association (IATA), while higher fuel prices, lower yields and somewhat increased employee costs effect a slight fall in net profits, from last year’s record $35 billion to a level closer to $30 billion, according to Boeing vice president of marketing Randy Tinseth.

“If you take a look at the market since it started to come back after the downturn of 2008-2009, we’ve seen exceptionally strong traffic growth since 2010. I think it has averaged about 6.3 percent per year...so it has been growing over trend,” said Tinseth. “As traffic has grown we’ve seen the net profits for our customers continue to grow and be strong, especially as fuel prices have gone down over that time. Now we stand in 2017 frankly on path to have eight straight years of growth in the market, eight years in which traffic has grown faster than capacity, which means that load factors are at record highs.”

In the cargo market, Boeing expects a continuation of a gradual recovery, forecasting growth of between 3.5 and 4 percent. Still, while passenger traffic has grown faster than historical trends over the past eight years, cargo has grown “below trend,” said Tinseth, due to the lagging industrial production and the lack of trade growth. “Over the last eight or nine months, however, we’ve seen significant improvement in that market,” he remarked. “I believe we still have to work through some capacity issues in the cargo market. There’s still more supply than market demand, but that excess supply is starting to be worked out of the segment.”

Despite a somewhat soft cargo market, overall aircraft use, both among narrowbodies and widebodies, has reached record levels, meaning that the airframers’ customers—the airlines—have not shown a lack of fleet discipline. Meanwhile, Boeing, for one, has seen deliveries increase markedly from 2010, when it shipped 462 airplanes, to this year, when the company expects to deliver between 760 and 765.

On the individual capacity segments, Tinseth said the company expects little requirement for very large aircraft, namely the 747-8 and Airbus A380, while narrowbodies continue to lead global demand, particularly given the projected continued strength of the low-cost carrier (LCC) segment in emerging markets. In the twin-engine widebody segments, he noted that the recent slump in orders reflects a “rebalancing” of the market, but that by the time a replacement cycle takes hold in 2021 or 2022 the industry will see a strong recovery.

Tinseth also addressed the largely vacant capacity segment between the 737 and 787, for which Boeing continues studies on a new midsize airplane (NMA) that would cover far more market territory than the 757 ever did.

“First and foremost, the NMA would enter into high-density, single-aisle markets of today,” said Tinseth. “The other aspect of the NMA, because it has about 25 percent more range and size of a 757, think of an airplane that would take what the 787 has been able to do and move it to a different part of the market.”

As a result, said Tinseth, the NMA would fragment the North Atlantic in a way not yet seen. “So think of the NMA connecting places like Washington, D.C. and Prague or maybe places in Japan to places in India.”

Tinseth also cited the so-called Chinese Golden Triangle—Beijing, Shanghai and Guangzhou—as a good example of where undergauged single-aisle airplanes operate alongside over-gauged widebodies. 

Boeing sees a 20-year market for between 4,000 and 5,000 airplanes in the category the NMA would occupy. Although Boeing’s market outlook does not include the NMA, its entry into the market would not materially change its total forecast for 41,030 deliveries.