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 SEATTLE, March 2 /PRNewswire/ -- Boeing Commercial Airplane Group

today released a generally favorable long-term forecast for air traffic growth between 1992 and 2010.
 It predicted that by the year 2010 worldwide traffic growth in revenue passenger miles (RPMs) will nearly triple, averaging 5.2 percent a year. During that period, $857 billion worth of airplanes (in 1992 dollars) will be delivered.
 "Our goal is to provide a reasonable guide for our industry," said Richard L. James, vice president-marketing for Boeing Commercial Airplane Group. "Much of the world has moved to more market-based economies, and we may see the best decade we have ever had." He said the world economy is expected to recover to an average 3.4 percent annual growth rate in gross domestic product (GDP) between 1991 and 2000.
 The forecast, detailed in the annual Boeing "Current Market Outlook," looks five years farther than last year's report. James pointed out that the Boeing forecasts aim to be credible and consistent over the long term. "We believe 1991 events were a short- term deviation from that trend," he said.
 The company predicts that during the decade from 1990 to 2000 world travel will grow an average of 5.5 percent a year and then slow to about 5 percent a year for the next 10 years. "Incremental gains in actual numbers of people moving will be enormous," according to James.
 "Of course we see the record debt, the credit crunch and low consumer confidence at present," James said, "but the cold war is ended and the Middle East is more stable than a year ago. This will lead to an improved travel environment and a brighter outlook for air transportation."
 Some of the expectations affecting the recovery, he said, are:
 - Travel growth will rebound as it has historically when unforeseen disruptions have occurred.
 - The economy will return to solid growth, resulting in more personal income.
 - Financing capability should improve.
 - Oil prices will remain low with prices fluctuating around the $20 a barrel level (in 1991 dollars) through the year 2000.
 - Airlines will use their airplanes more efficiently, experience modest declines in costs and return to good profitability.
 - Consolidation and integration will mean fewer carriers will have the advantage of economies of scale.
 - Improving technology and more skilled labor will provide better productivity.
 As predicted in last year's Boeing market outlook, the poor performance for the industry in 1991 was due to the combined effects of the Gulf War and weak economic growth in several countries. For the year, world travel declined for the first time in the jet era.
 "But we think the U.S. economy has bottomed out," James said, "and traffic growth will recover as consumer confidence and economic growth resume." The outlook predicts U.S. domestic traffic will grow between 5 percent and 7 percent annually assuming U.S. airlines recover to a 4 percent to 6 percent annual profit margin by 1994.
 The fastest growing area will continue to be the Far East, where an 8.6 percent a year growth rate is expected. The slowdown in traffic in that area in 1991 (excluding the Indian subcontinent) was never as severe as in the rest of the world. During the past 20 years, the average annual 12.5 percent growth rate in the Far East pulled up the world average to about 7.2 percent a year.
 Although Boeing had expected about 300 airplanes would be retired in 1991, only 91 were. But the company anticipates many of the estimated 800 jetliners currently grounded (although not officially retired) will never return to service. It assumes that 4,200 jetliners will be retired by 2010, with the majority -- 2,750 -- being retired by the year 2000. Approximately 10,600 are in inventory today. The higher percentage of the fleets is expected to be retired in the near term as airlines comply with newly established noise regulations.
 Because of this, from now until the year 2000, Boeing projects that 65 percent of the airplanes delivered will be to accommodate traffic growth and 35 percent will be used to replace those taken out of service. But for the full 19 years from 1992 to 2010, 73 percent will be delivered to accommodate growth and 27 percent will be used for replacement.
 Jetliner deliveries are projected to grow from the average of 467 airplanes a year from 1980 to 1991, to 655 a year from 1992 to 2000 and then 580 a year from 2001 to 2010, with more standard-bodied jetliners in the near term and more widebodies in the long term.
 During the past 21 years, the industry has averaged $18 billion a year in deliveries (in 1992 dollars) but during the next 19 years, from 1991 through 2010, Boeing forecasts deliveries will average $45 billion a year.
 In 1960, the entire world travel market totalled 70 billion RPMs. But in the 1990s, the growth in volume each year is expected to average 81 billion RPMs, or more than the traffic for an entire year in 1960.
 James pointed out that in the 1990s, airline traffic measured in revenue passenger miles will increase by 70 percent over that recorded in the 1980s despite the recent traffic slump; even more important, the long-term future of air transportation continues to look favorable.
 -0- 3/2/92
 /CONTACT: Tom Cole of Boeing Commercial Airplanes, 206-237-5445/
 (BA) CO: Boeing Commercial Airplane Group ST: Washington IN: AIR SU:

LM -- SE005 -- 3968 03/02/92 12:32 EST
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Publication:PR Newswire
Date:Mar 2, 1992

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