A top Boeing executive says the airline industry is enjoying record profits because of increasing demand for air travel and a decline in oil prices.
Randy Tinseth, Boeing’s vice president of marketing, sounded optimistic when he spoke with reporters in a briefing ahead of the Paris Air Show, which begins June 15th. Tinseth says air passenger traffic grew six percent last year, above the historical rate of five percent, and should grow six percent again this year.
Tinseth pointed out that that’s a lot faster than growth in the worldwide economy, which is projected by the International Monetary Fund to be 3.5 percent this year.
“Air travel’s just become both a catalyst for economic growth but it’s become very, very resilient, especially as we see the emerging and developing economies grow and their middle class grow,” Tinseth said.
International Orders
That international demand is evident in Boeing’s order book. So far this year, the company has received orders for its 787 Dreamliner from Air Austral, which serves the Indian Ocean region, Air Tahiti Nui, which serves French Polynesia, All Nippon Airways, based in Japan, and TUI Travel Plc, a tour operator based in the U.K.
However, Boeing’s orders so far this year total 136. That lags where the company should be if it wants to meet its goal of having a so-called “book-to-bill” ratio of 1, meaning that the company brings in one order for every plane it delivers. So far this year the company has delivered 310 planes.
“We’ve got work to do,” he said. “We have a lot of things in the pipeline, both on the single-aisle and the wide-body side. We’re on plan.”
A bit of good news is that the air cargo market is enjoying a rebound, Tinseth said.
He says he expects that to translate into more orders for the 777 and the 747, which are often used as freighters. More orders for those planes would be good news for Boeing’s Everett plant, where the planes are built. So far this year, Boeing has received 25 orders for the 777 and four orders for the 747.
