Air Transport Forecasting and Market Research - Desklib

The report covers a comparison of two forecast reports of Boeing, assumptions made by the company, and a critical analysis of the projected growth in the aviation industry. It includes factors such as drivers of air travel passenger demand, air cargo demand, economic development, and passenger market development. The report also discusses the areas that require improvement.

AIR TRANSPORT
FORECASTING AND
MARKET RESEARCH

TABLE OF CONTENTS
TABLE OF CONTENTS.................................................................................................................2
INTRODUCTION...........................................................................................................................3
Comparison of forecast, highlighting and differences between forecasts...................................3
Overview of assumptions of company........................................................................................8
Critically analyse the projected growth of the aviation industry and the areas which required
improvement...............................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Forecasting is the process of making predictions about the future which is based on the
past and present data of the company. The present report is based on the two forecast report of
the Boeing company named as Commercial Market outlook 2020 to 2039 and Commercial
Market outlook 2021 to 2040. This covers the forecast of the company various activities for the
upcoming next 20 years. Now, this report will cover the comparison between the two forecast on
the basis of various factors such as drivers of air travel passenger demand, air cargo demand,
economic development etc. Further, the report will discuss the assumption used by the Boeing in
their most recent forecast such as forecast of 2021 to 2040. Lastly, the report will critically
analyse the projected growth in the aviation industry along with the area which need
improvement.
Comparison of forecast, highlighting and differences between forecasts
This section covers the comparison between the two forecasts of Boeing company using
the various factors of comparison. These factors are as follows:
Driver of Air Travel Passenger Demand:
This is one of the factors which describes the drivers on which demand of the air travel
passenger is estimated by Boeing company. This driver includes economic growth, airline traffic
growth and airline fleet growth. The forecasted data of these driver are as follows:
Particulars 2020 – 2039 2021 – 2040
GDP growth rate 2.50% 2.70%
Airline traffic growth 4.00% 4.00%
Airline fleet growth 3.20% 3.10%
‘
Graphical presentation of data:

Interpretation:
On the basis of above data and its graphical presentation, it is analysed and interpretated
that the estimated GDP growth rate and airline fleet rate in both forecast is different. It is because
in the year 2020 – 2039 the GDP growth is 2.50% while in 2021 – 2040 forecast is 2.70%. This
means that in the recent commercial market outlook, the company has increased their estimation
regarding their contribution towards the GDP of the country. On the same side, the airline fleet
growth in the 2020 – 2039 forecast is 3.20% and in the 2021 – 2040 forecast report is 3.10%.
This means that in the recent forecast report, Boeing has estimated low growth in airline fleet.
This might be because of the Covid-19 crises. On the basis of data, it is also interpretated that the
airline traffic growth rate in the forecast report 2020 – 2039 and 2021 – 2040 is similar i.e., 4%.
The reason behind keeping this driver similar in both forecasts might be that company beliefs
that this factor does not get affected by the changes taken place in the external business
environment (Siami-Namini, Tavakoli and Namin, 2018).
Passenger Market Development:
This is a factor which are plays crucial role in the business operation of Boeing which
involve service market size and flow of passenger traffic between region.

Factors 2020 – 2039 2021 - 2040
Service market size $9040B $9540B
Flow of passenger traffic
between regions
4.00% 4.00%
Interpretation:
On the basis of above data, it is interpreted that the service market size estimated by
Boeing for their upcoming period of 20 years in the commercial market outlook 2020 – 2039 is
different as compared to the forecast of 2021 – 2040. The service size market in 2020 – 2039
forecast report is $9040B, while in the recent forecast of 2021 – 2040 is $9540B. The reason
behind the increase in the estimation of Boeing company is because of the drivers of demand for
air travel. It will continue to encourage the travellers to visit place through airline service as it is
more convenient and comfortable for the people. It is also time saving mode of travelling that’s
why people prefer it more as compared to other mode. While on the other hand, the estimation of
the flow of passenger traffic between regions is similar in both the forecast and that is 4%. The
similarity between the two forecasts might be because Boeing experts think that the changes in
the external environment such as Covid-19 will not put major impact on the passenger market
development (Lago, De Ridder and De Schutter, 2018).
The economic development is also comparative in both the tenure such as 2021-2040 and
2020-2039. The growth rate of GDP for the 2021-2040 has been for the asia pacific region is
3.7%, china 4.4%, southeast asia 3.9%, South Asia 4.9%, Northeast Asia 1%, Oceania 2.3%,
North America 2.1%, Europe 1.4%, Middle East 2.8%, Latin America 2.4%, Russia and Central
Asia 2.1%, Africa 3% and World 2.7% (Liu and Madlener, 2021). On the other hand the growth
rate for the 2020-2039 tenure is 3.6% for the Asia pacific region, 4.3% in China, Southeast Asia
4%, South Asia 5%, Northeast Asia 1%, Oceania 2.1%, North America 1.9%, Europe 1.2%,
Middle East 2.3%, Latin America 2.2%, Russia and Central Asia 1.5%, Africa 2.6% and World
2.5%. The numbers are almost similar that demonstrate that the Boeing hold a different
economic growth rate that further influence the busioness progress. The airline traffic growth

rate is further demonstrate as asia pacific region is 5.1%, china 5.5%, southeast asia 5.7%, South
Asia 7%, Northeast Asia 1.5%, Oceania 3.3%, North America 2.7%, Europe 3.1%, Middle East
4.3%, Latin America 5.1%, Russia and Central Asia 2.4%, Africa 5.5% and World 4% in the
2020-2039 tenure. On the other side 2021-2040 tenure hold asia pacific region is 5%, china
5.4%, southeast asia 5.5%, South Asia 6.9%, Northeast Asia 1.7%, Oceania 3%, North America
2.7%, Europe 3.1%, Middle East 4.1%, Latin America 4.8%, Russia and Central Asia 2.9%,
Africa 5.4% and World 4%. These are the traffic that is contain over the respective regions.
Airline fleet growth rate is further demonstrate as 2020-2039 region is asia pacific region is
4.3%, china 4.4%, southeast asia 5.3%, South Asia 6.6%, Northeast Asia 1.2%, Oceania 2.3%,
North America 1.7%, Europe 2.8%, Middle East 4.3%, Latin America 3.5%, Russia and Central
Asia 2%, Africa 3.7% and World 3.2%. On the other side 2021-2040 tenure asia pacific region is
4.2%, china 4.4%, southeast asia 5%, South Asia 6.6%, Northeast Asia 1.2%, Oceania 1.9%,
North America 1.7%, Europe 2.7%, Middle East 4.1%, Latin America 3.4%, Russia and Central
Asia 2.5%, Africa 3.6% and World 3.1%. All thee are the different airline fleet growth rate
associated with the Boeing. The company is among the emerging organisation in the airline
sector that demonstrate with all the various figures entertain and address by the organisation in
respect to its business operations.
The 2021-2040 tenure demand demonstrate asia pacific region is 19150, china 9630,
southeast asia 4440, South Asia 2660, Northeast Asia 1590, Oceania 830, North America 10835,
Europe 9140, Middle East 3530, Latin America 3095, Russia and Central Asia 2095, Africa 1560
and World 49405. ON the other hand 2020-2039 tenure is indicated as asia pacific region is
18770, china 9360, southeast asia 4400, South Asia 2570, Northeast Asia 1560, Oceania 880,
North America 10610, Europe 9050, Middle East 3500, Latin America 3060, Russia and Central
Asia 1870, Africa 1540 and World 48400. All the figures demonstrate about Constant demand
the company is holding in all different tenures. The organsiation is among the leading
organisation in the field of airline. The demand clealry idicate about the potential company hold
to grow and upgrade in respective market (Al-Kwifi, Obeidat and Fetais, 2020). The sector is
highly competitive in nature which require the company to constantly undertake the practices
which can empower the business venture to maximise the growth and development possibilities.
The air cargo demand is also demonstrate as for the 2021-2040 tenure asia pacific region is 3745,
china 1800, south-east asia 790, South Asia 435, Northeast Asia 555, Oceania 165, North

America 2070, Europe 1895, Middle East 740, Latin America 535, Russia and Central Asia 320,
Africa 325 and World 9540. IN the 2020-2039 time asia pacific region is 796000, china 395000,
southeast asia 183000, South Asia 103000, Northeast Asia 77000, Oceania 38000, North
America 408000, Europe 409000, Middle East 223000, Latin America 117000, Russia and
Central Asia 69000, Africa 64000 and World 2086000 (Aschemann-Witzel and et.al., 2021). All
these values indicate about the air cargo demand entertain by the Boeing. The company is well
known in respect to its air cargo service that catered to all different customers in respective target
market.
Air cargo is among the main service area for the company that will further empower to
maximise the growth and development possibilities of the venture. This is important and
significant for the business venture to maximise its all different services that can further
empower to support the overall growth and development of the venture. The all different areas
assure the business to deliver all its business practices in well diversified manner. The Boeing
Company is associated with multiples services that involve passenger related services and also
the carge related services. The all different operational areas allow the business to delegate the
high turnopver in respect to business operations perform by the venture (Cothier, 2019). There
are various assumptions that are made which involve that the quality of services allocate by the
company would have a suitable impact over the level of customer satisfaction company ha
achieved in the business. The another assumption is taken as the entire operation related to the
services delegate by the business would have a suitable impact over maximising the business
growth and development opportunities for the business venture. This is a p[art of the business
operations perform by the company that the impact the services would create over the business
outcome will be sufficient enough to support the company for enhancing and maximising the
overall growth and development possibilities of the business venture (Nirino and et.al., 2021).
Along with that this is also assumed that all different factors related to the business environment
such as political, economic, social. Technological, legal and environment factors would have
affected all the companies associated with the aviation sector in the same capacity.
The business environment factor would hold the direct impact over the business
operations perform by the company. This is assumed that all different factors and elements
related to tee external business environment must have affected to all the competitors of the
Boeing Company in the same capacity as they could influence to the organisation itself (Pedada,

Arunachalam and Dass, 2020). This is a part of the business operations perform by the
organisation is the fact that the factors would create a best level of growth opportunities in favour
of the Boeing Company as they are influencing to all other competitor of the organisation. This
is also assumed that even after the covid pandemic the industry could reach to its normal pace
which is further assumed in the entire evaluation is that the pandemic would not create any
further impact in the sector. This is assumed that the situation will not reach to its earlier stage
where the flights got cancelled due to the pandemic by the government. This is assumed that all
the health and safety related aspect must have been positive for the company.
Overview of assumptions of company
The assumption that is made by the company involve the fact that passengers are
favouring to travel from airline as it is convenient and time saving as well. The assumption also
involve that the travelling through air is more safer for the passenger than other mode of
travelling which include train or bus. This entire process ensure all the health and safety
standards that are required in the time of covid to meet up different regulatory requirements. This
is an important aspect which is covered by the government in the time of covid to cope up with
all the regulatory requirement (Zhou, Li and Zhang, 2020). This is a major assumption that could
favour the company to formulate different strategies and policies to ensure the best level of
policy making and the most favourable one for the company. The company is also assumed the
fact that it can make the guidelines easy when it comes to implementing the same as the situation
get normal. This is a necessary assumption that is made by government to deal with all the
changing needs and requirement. The assumption is also made in the fact that proportion of the
passenger and the cargo segment may be equal in the revenue perspective. The company has
further made an assumption over the fact that the role of competition is to support the business
venture to formulate the different strategies and policies to take on the competitive advantage.
Critically analyse the projected growth of the aviation industry and the areas which required
improvement
The aviation industry is one of the fasted growing sector in the world because of its high
demand in the people of all country. As people always prefer travelling from one place to
another place in order to relax. Thus, it is identified that the projected contribution of the aviation
industry in the global GDP is around $2.7 trillion (Wang and et.al., 2018). It is also identified

that aviation industry will offer around 65.5 million jobs worldwide in the next 10 years. The
production of aeroplanes and the service of flying will help the industry in growing with 51% in
the upcoming year 2022.
On the basis of the above data, it is analysed that in the year 2019 the revenue of Boeing
company is 6B while the revenue in 2020 post Covid is — 2.5B. It might be because of the
temporary restriction on the movement of people from one place to another using flying mode.
This has also reduces the production of the aviation company. It is identified in the research
which state that projected growth of the aviation industry up to 2022 will be 51% which helps
the companies in recovering their loss happens due to Covid-19 (Srisook and Panjakajornsak,
2018).
Beside this, the various other areas which acts as a challenge for the industry and require
deep improvement fuel price and airline infrastructure. The price of the fuel used in the air-
planes and satellites are increasing day by day the impact of which the sale of the produced
products of Boeing get decreased. The industry have to improve it by entering into forward
contract with the fuel supplier when they think that the prices of fuel get increases in the future.
Further, in order to improve the airline infrastructure, the companies operated in this industry

need to identify and analyse the demand of the customers and make changes accordingly. They
have to analyse the experience of the customers along with the review and feedback from the
passenger. It helps them in identifying the comfort of the passenger which further help them in
infrastructure improvement (Caveney, 2017). The increased growth in the industry will help
Boeing company to improve its production of products which further increase its sales. The sales
of the company will also get increase because of the high demand of the air-planes in the market
in which Boeing already operates.
CONCLUSION
The Boeing Company is among the leading airline sector organisation that is involved in
both passenger services and the cargo related service to its customers. The organisation is
growing rapidly due to its competitiveness and market presence which empower the business
venture to support the growth and development in the market. The various drivers of air travel
such as safety, time saving and such other that support the company to attract customers in
market.

REFERENCES
Books and Journals
Liu, X. and Madlener, R., 2021. The sky is the limit: Assessing aircraft market diffusion with
agent-based modeling. Journal of Air Transport Management. 96. p.102104.
Al-Kwifi, O. S., Obeidat, S. M. I. and Fetais, A. H. M., 2020. Exploring the influence of home
country factors on rapid internationalisation of emerging multinational
companies. Journal for International Business and Entrepreneurship
Development. 12(4). pp.258-279.
Cothier, P., 2019. European Defense Industries: From Traditional Cooperation to a Single
European Arms Market. In Emerging Dimensions of European Security Policy (pp.
189-197). Routledge.
Pedada, K., Arunachalam, S. and Dass, M., 2020. A theoretical model of the formation and
dissolution of emerging market international marketing alliances. Journal of the
Academy of Marketing Science. 48(5). pp.826-847.
Zhou, X., Li, Y. and Zhang, Y., 2020. The threshold effect of firm size on technological
innovation: examination of panel data from China. Journal of Economic Studies.
Nirino, N. and et.al., 2021. Corporate controversies and company's financial performance:
Exploring the moderating role of ESG practices. Technological Forecasting and Social
Change. 162. p.120341.
Aschemann-Witzel, J. and et.al., 2021. Plant-based food and protein trend from a business
perspective: markets, consumers, and the challenges and opportunities in the
future. Critical Reviews in Food Science and Nutrition. 61(18). pp.3119-3128.
Siami-Namini, S., Tavakoli, N. and Namin, A. S., 2018, December. A comparison of ARIMA and
LSTM in forecasting time series. In 2018 17th IEEE International Conference on Machine
Learning and Applications (ICMLA) (pp. 1394-1401). IEEE.
Lago, J., De Ridder, F. and De Schutter, B., 2018. Forecasting spot electricity prices: Deep
learning approaches and empirical comparison of traditional algorithms. Applied
Energy. 221. pp.386-405.

Srisook, P. and Panjakajornsak, V., 2018. Thailand’s Low-Cost Carrier Airline Industry: Is the
Services Marketing Mix the Elixir for Economic Growth and Prosperity. Asia-Pacific Social
Science Review. 18(2). pp.65-79.
Caveney, R., 2017. Valuation and Value Drivers for US Based Airlines, an Analysis of an
Industry.
Wang, B. and et.al., 2018. Modeling Airline Cost Pass-Through within Regional Aviation
Markets. Transportation Research Record. 2672(23). pp.146-157.