Randy Tinseth, VP-Marketing for Boeing, said forecasts predict oil as low as $7/bbl and as high as $80/bbl–as always, “giving themselves a lot of leeway.”
Asia remains the top growth market, adding 100m passengers every year (the size of Atlanta’s international airport, the world’s busiest, which served 100m passengers lasgt year.
The cargo market has been challenged over the last six years, and it comes and goes, but it will come back when trade comes back, Tinseth said.
The single-aisle market represents 70% of the market and half the value, including Airbus and all other competitors.
“We as an industry and we as a company have to focus on doing the right things…and build at the right cost” to be successful, Tinseth said.
He said that given the total forecast of 35,000 airplanes from regional jet to Very Large Aircraft, there is a need for 60% of the sales still to be made.
Tinseth said the company will deliver fewer 737s this year because the supply chain can’t keep up as the transition between the NG and MAX takes place.
Update: This email was received later from Boeing’s Corporate Communications department:
I wanted to touch base on this bullet in your coverage of Randy’s PNAA presentation.
After talking to Randy, I believe his response was lost in translation.
He was making the point that the transition to MAX is the reason we’ll deliver fewer 737s—because we’re producing several MAX airplanes this year that won’t deliver until 2017.
On a follow up question about separate production lines, he was simply making the point that the NG and MAX share a common supply chain.
So the supply chain is delivering precisely to our 42 per month rate. We’re producing 42 per month, but won’t be able to deliver to that rate this year due to MAX certification.
His point was the opposite of “can’t keep up.” Our suppliers are doing exactly what we need them to do. We can’t expect them to deliver at a rate higher than 42 right now just so we can build more NGs to make up for the MAXs that won’t deliver this year. And of course, that would go against our own rate hike schedule.
China’s market has slowed, but the government is restructuring the economy but “we see robust, double-digit growth” for the future, he said.
Despite the fluctuation of oil prices, “we haven’t seen a change in the replacement pattern,” Tinseth said. Aircraft reach maintenance requirements, interior upgrades and certain ages that simply need replacement.