Cloudy ball gazing

I find it fascinating how the two major manufacturers occasionally come up with deviating opinions. A few months ago, Boeing revised their twenty-year forecast in a downward direction, reducing the number of newly delivered aircraft by 1%. If you think about it, this seems entirely plausible, given the severe impact of the current recession and the obvious fallout in terms of reductions in capacity.

However, Airbus is taking a different view. Their updated Global Market Forecast reveals a 3% increase in the numbers of aircraft expected to be delivered in the next twenty years. The reason for this characteristically upbeat message is that higher fuel prices will encourage airlines to bring forward their fleet replacement decisions in order to get the most efficient aircraft into operation at the earliest opportunity, and thereby reduce their fuel bills.

Now, that sounds all well and good. But fuel prices are impossible to predict with any accuracy whatsoever. We all feel that fuel price is going to rise, but by how much? One of the primary agencies forecasting fuel is the US Energy Information Administration, and their current forecast reveals that the price of oil per barrel could be anywhere between $50 and $200 by 2030. If future aircraft orders are indeed so closely linked to the price of oil, then predicting the number of aircraft deliveries in such a highly volatile situation is just not possible. You may as well just toss a coin.