Despite the Covid pandemic wiping out two years of growth for the commercial airplane market, Boeing expects demand for the industry to swell over the next 20 years.
The company's annual market outlook predicts the global fleet of commercial airplanes will climb from 25,900 in 2019 to 49,405 planes by 2040, with almost 90 percent those planes being new models that will enter service over the period.
In addition, Boeing is projecting the global aerospace industry, including defense and services, will reach $9 trillion over the next decade. That's up $500 billion from the same forecast last year. It is also the largest amount the company has ever projected for the industry over a 10-year period.
"It is a pretty promising view and it tells us it's time to start preparing for growth," said Marc Allen, chief strategy officer for Boeing.
Driving it all will be an expected recovery in air travel, especially on international routes that have been devastated by the pandemic. International travel is down 74% from 2019, while domestic travel is down just 16%. By late 2023 or early 2024, Boeing expects global travel to return to 2019 levels.
"The industry essentially had two years of growth wiped out by the pandemic," said Darren Hulst, vice president of commercial marketing for Boeing.
In its annual global market outlook released in 2019, long before the pandemic, Airbus had predicted that the world would need 47,680 jets by 2038.
The recovery that began last year with Boeing and Airbus delivering 723 airplanes, is gaining slow but steady momentum, with airlines expected to take delivery of almost 900 Boeing and Airbus planes in 2021. By the end of the decade, the industry is expected to deliver more than 19,000 new airplanes, with the majority of those being single-aisle planes like the Airbus A320 and the Boeing 737 Max.
"We normally see about 15% of the fleet retired every five years," said Allen. "After the 9/11 crisis, after the global financial crisis we saw those numbers spike up and get up to the 20% mark. What we're seeing right now in the airline behavior is that those retirements over five years are going to be 20% to 25% of the total fleet."
Boeing's outlook comes as the company is steadily increasing deliveries of 737 Max airplanes following a year and half grounding by regulators around the world. The company resumed deliveries in November but has been conservatively increasing production as it clears out more than 400 Max planes that were built but never delivered when the aircraft was grounded. The last of the completed, brand new Max planes is expected to be delivered by the end of next year.
Just as the demand for new commercial planes is expected to grow steadily over the next two decades, the same can be said for cargo planes. The growth is being driven by rising demand for goods to be flown around the world. In 2019, just over 1,000 cargo planes were in service worldwide. That's expected to jump 70% by 2040, when almost 3,500 cargo planes are forecast to be in service.
Allen said Boeing has already begun to meet the demand for more cargo planes by preparing to expand eight conversion lines where old passenger planes are turned into freight carriers. "We are, by 2022, going to increase over 60% to 13 conversion lines around the world" said Allen.
—CNBC's Meghan Reeder contributed to this article.
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