Boeing’s 33,500 New Planes

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Boeing (NYSE: BA) officials say that the world will need 33,500 large aircraft between now and 2030. That is a very precise number given that no one knows what will happen to the world economy over the next two decades. It is another example of how industries make fantastic predictions that have almost no use to them, their industries, their investors or the press.

Boeing’s forecast is for large planes like those made by it and competitor Airbus. The value of the aircraft delivered over the next 20 years is $4 trillion, according the U.S. firm. Boeing’s revenue last year was $69 billion, which is not up much from $66.4 billion in 2007. So, the level of growth that the aerospace company predicts is essential to its financial future.

Most of the growth that Boeing expects will be in Asia, which makes sense based on population and GDP growth. The 33,5000 forecast assumes that 11,450 large aircraft will be delivered in the Asia-Pacific region before 2030. The prediction is not 11,400 or 11,500. It is 11,450 on the dot.

It is as impossible to argue against Boeing’s numbers as it is to argue for them. They may not be precisely right, but Boeing should be in a position to make predictions if any company or economist is. However, a drop in gross domestic product of a fraction of a point here and there across Asia would make the prediction wrong on the downside. Sales in North America, Europe and other developing or developed parts around the world will not make up for that, particularly because Asia has become so much of the world’s total GDP.

Boeing management might as well keep their predictions to themselves. People may have flying cars in 2030, or the global economy may be such that very few people are flying at all.

Douglas A. McIntyre

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