The world’s biggest airplane manufacturer, Boeing, expects nearly half of the world’s air traffic growth to be driven by the Asia-Pacific region over the next 20 years. However, it is monitoring local currencies to assess airlines’ ability to meet orders.
On the eve of the Singapore Airshow, Boeing forecast the fleet of aircraft in the region would triple in size over the next two decades, sparking demand for close to 13,000 more planes valued at $1.9 trillion.
Air travel has surged in the region, driven by a rise in disposable incomes and low air fares offered by budget carriers, notably in Southeast Asia.
But Randy Tinseth, vice-president of marketing at Boeing Commercial Airplanes, sounded a note of caution, saying market conditions were being monitored closely for any signs of overcapacity. “We are watching what’s happening here in terms of currencies and in terms of economic growth,” he told Reuters television.
After years of explosive growth, the region’s budget carriers now face the possibility of overcapacity as deliveries accelerate, airlines expand into each other’s markets and currency weakness threatens to dent economic growth.