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BOEING AIR CARGO FORECAST FAVORABLE

 BOEING AIR CARGO FORECAST FAVORABLE
 SEATTLE, June 24 /PRNewswire/ -- In agreement with its generally


favorable outlook for air passenger traffic growth released earlier, Boeing (NYSE: BA) today said that worldwide air cargo traffic will increase nearly two-and-one-half times by 2005.
 Boeing Commercial Airplane Group's annual "World Air Cargo Forecast" document, available early in July, said that the 74 billion revenue ton kilometers (RTKs) moved in 1991 will grow to 179 billion RTKs in the next 13 years.
 However, the average growth of 6.5 percent a year will be somewhat slower than the average of 8 percent a year during the preceding 21 years, it said.
 According to the report, an unusually high five-year expansion of air cargo began to moderate at the end of 1989 and ended abruptly with the advent of the Gulf War. As the world gross domestic product declined in 1991 for the first time since the 1930s, air cargo traffic declined with it, by 3.1 percent.
 Currently, two-thirds of the world's air cargo traffic is carried by non-U.S. airlines. By the year 2005, these carriers are expected to account for 69 percent of total world air cargo RTKs compared with 67 percent in 1991.
 To accommodate this growth, Boeing sees a requirement for nearly 365 additional large-capacity freighters (more than 50 tons payload) by 2005. More smaller freighters with a capacity of less than 30 tons, primarily converted passenger aircraft, will be available. A significant number of medium-size freighters will not be needed before 2005, the study indicated, because Boeing 757-size freighters expected to replace retiring 707 and DC-8 freighters will operate at considerably higher utilization rates than the airplanes they replace.
 Signs of renewed growth in the United States are apparent according to the forecast which notes that Asia and Latin America, which enjoyed significant air cargo growth in 1991 despite the war and recession, should be major contributors to the returning health of the world economy. During 1991, while U.S. domestic air cargo fell by 2.9 percent, intra-Orient air cargo traffic grew by almost 12 percent.
 Several positive factors support this expectation of future expansion of the air cargo market, the forecast said:
 - the world gross domestic product is expected to grow at about
 3 percent annually
 - fuel prices should remain level in constant dollars
 - airline costs are declining because of efficiencies in equipment
 and operations
 - competitive pricing (lower yields) will provide market stimulus
 - airline and air express networks are cooperating better, which
 portends even higher standards for traditional air freight
 In an interesting note, the study points out that although cargo demand will continue upward, driving an increasing demand for capacity, the actual share of world air cargo carried by all-cargo airplanes will decrease. The reasoning is that many older freighters will be retired while the number of wide-body passenger planes with relatively large lower-hold capacity will more than double. As a result, the all-freighter capacity share should fall from 41 percent to 37 percent by 2005.
 To feed the freighter market, Boeing currently builds a 757 freighter, has begun producing parts for the first 747-400 freighter at Boeing-Wichita with first delivery scheduled for May 1993 and continues to study the requirement for a wide-body 767 freighter. While Boeing does not manufacture a cargo version of the smaller 737 series, after-market conversions are available.
 -0- 6/24/92
 /CONTACT: Tom Cole of Boeing Commercial Airplane Group, 206-237-5445/
 (BA) CO: Boeing Commercial Airplane Group ST: Washington IN: AIR SU:


JH-LM -- SE002 -- 3278 06/24/92 12:00 EDT
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Publication:PR Newswire
Date:Jun 24, 1992
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