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Boeing’s 20-year forecast: $2.8 trillion market

SEATTLE – Boeing Co. on Wednesday boosted its 20-year market projections for new commercial jets to $2.8 trillion, up about $200 billion from its forecast last year, citing a growing demand for regional, single-aisle and twin-aisle jets that airlines want for nonstop routes.

Boeing lowered its market forecast for jumbo jets over the next two decades to 960 planes – down from 990 last year – saying airlines are increasingly turning to smaller, more fuel-efficient planes that will fly passengers directly where they want to go, bypassing layovers at hubs.

Airlines will spend less and make more money by offering more frequent nonstop flights, because passengers have shown they’re willing to pay more for the convenience of flying straight to their destination, Randy Tinseth, vice president of marketing for Boeing’s Seattle-based commercial airplane division, said in a conference call with reporters about the company’s 2007 Current Market Outlook report.

Nonstop flights also cost airlines less and are more environmentally friendly because planes burn less fuel and produce fewer emissions with only one takeoff and landing per flight, Tinseth said.

“Airlines are responding to the true needs of passengers to save more time on more capable aircraft,” Tinseth said. “Airlines have accommodated air travel by adding more frequencies and nonstops, and what’s most important for us is that we’ve seen this trend for the last 20 to 25 years, and we expect this trend to continue into the future.”

All told, Chicago-based Boeing projects airlines will buy 28,600 new passenger and cargo planes over the next two decades.

The new planes will meet an estimated 5 percent annual increase in passenger traffic and a 6.1 percent rise in yearly air cargo traffic, Boeing said.

Boeing said about one-third of the demand for new planes will come from the Asia-Pacific region, followed by North America, which will account for about one-quarter of worldwide demand.

Single-aisle planes such as Boeing’s 737 and rival Airbus SAS’s A320s will continue to be the market’s best-sellers, driven by brisk growth among low-cost carriers.

But Boeing expects to make more money from sales of larger twin-aisle jets such as its 777 and new 787, which is scheduled to enter commercial service next May, about five years ahead of when Airbus plans to begin delivering its competing A350 XWB.

Boeing projects much weaker demand for jumbo jets than Airbus, which has invested heavily in its 555-seat A380. That plane is scheduled to enter commercial service in October, after delays caused by production snags that wiped more than $6 billion off the company’s profit forecast for 2006-2010.

In Airbus’ most recent market forecast, released last fall, the European aircraft maker projected airlines will buy more than 1,200 passenger jumbo jets over the next two decades.