Boeing Projects $1 Trillion Market But Work Force Won’t Grow As Airline Industry Recovers

Airlines are likely to order $1 trillion worth of commercial jets over the next 20 years, The Boeing Co. declared Monday in its most optimistic industry report in recent years.

The air-travel industry is coming out of a tailspin and world economic growth is projected at 3.6 percent a year through 1999 and 3.1 percent from 2000 to 2014, Seattlebased Boeing said in its annual Current Market Outlook.

“This is the best we have seen since the mid80s,” said Nancy Bethel, marketing vice president at Boeing Commercial Airplane Group.

However, despite the optimistic projections, Washington’s largest employer said it does not expect to increase its shrunken work force.

The outlook anticipates a 5.1 percent annual increase in air-passenger traffic and orders for 773 new planes a year over the next 20 years.

Manufacturers delivered an average of 818 commercial jets in 1991 and 1992, compared with 522 last year, and airlines have 1,800 planes on order.

The clearing skies are evident in orders this year for 96 Boeing planes through Thursday, compared with 120 for all of 1994, Bethel said.

Boeing has more than 60 percent of the world market against rivals McDonnell Douglas, based in St. Louis, and the European consortium Airbus Industrie.

The outlook covers only world demand for aircraft and makes no attempt to project market share. It also does not consider the prospects for war or major fuel-price fluctuations, both of which can affect air travel.

“A very slight increase” in fuel prices is anticipated over the 20-year period, said Timothy D. Meskill, project director in charge of the forecasts.

Bethel and other executives would not comment on a report Monday in the Wall Street Journal that Boeing is about to get two-thirds of a longanticipated $6 billion order from Saudia airlines.

Boeing chairman Frank Shrontz visited Saudi Arabia last month for the latest talks in 15 months of intense negotiations, but orders are announced only by customers or with their approval, she explained.

The company projects no increase in hiring or total employment over the 20-year period covered by the report, Bethel said.

“We certainly don’t anticipate that we will have increases in employment,” she said.

“The goal is to keep employment level and manage the peaks with efficiency,” said Russ Young, a Boeing Commercial spokesman. The peaks are likely to come at the end of the decade.

Boeing has laid off 51,000 workers since 1989. The company is eliminating 12,000 jobs this year - a total boosted only last month from the 7,000 announced in February - because of heavy competition for aircraft orders. Voluntary retirement accounts for more than half the cuts.

Boeing, the nation’s biggest exporter, employs about 113,900 people, down from 117,300 at the start of the year.

Besides airline growth, the outlook cited a need to replace aging planes in estimating the market at 15,400 planes with a combined value of more than $1 trillion over the next 20 years.

U.S. airlines remain the biggest likely buyers with a projected total of $322 billion. China would account for $100 billion.

Another $70 billion is expected to come from Russia, the rest of the Commonwealth of Independent States and the Baltic nations.

The key to recovery is Asia. Projected growth in air travel worldwide is led by 7 percent within Asia, 7.1 percent in the region extending from southeast Asia to Australia and 6.5 percent across the Pacific.