Boeing says Latin America needs 2,960 planes by…

Latin America

Boeing says Latin America needs 2,960 planes by 2038

 12 Nov 2019 – 21:53

Boeing says Latin America needs 2,960 planes by 2038

A LATAM Boeing 787-9 Dreamliner having arrived from Chile on its very first revenue flight is being towed from Terminal 8 to Cargo Area B to be parked for the day until its return flight via Peru (Wikimedia Commons)

The Latin America aviation market will more than double in 20 years as Brazil’s economy recovers and discount carriers boost demand, driving a need for 2,960 new planes, according to Boeing Co.

“Low-cost carriers have really been the engine of growth in Latin America,” Darren Hulst, Boeing’s managing director for market analysis & sales support, said Tuesday in Sao Paulo. Discounters currently make up 35% of the total market and will continue to attract more customers in the region as they make flying affordable to the lower income population, he said.

The number of passengers carried by Latin America airlines has more than doubled in the last 10 years and should grow 3.6% a year over the next two decades, according to International Air Transport Association data.

Out of the 2,960 new planes that the aviation market in Latin America will need through 2038 — valued at $500 billion — 1,160 will replace older planes and 1,800 will expand the fleet, Hulst said.

While about 90% of the demand will be for single-aisle aircraft, such as Boeing’s 737 Max 10 or Airbus SE’s A321, long-distance aircraft such as the 777 and 787 will see a faster rate of demand growth as more cities connect with flights of 5,000 kilometers (3,100 miles) or more, Hulst said.

Brazil, which makes up the largest chunk of the region’s market, with about 40%, should grow at least 4% to 5% next year as economic growth slowly resumes and capacity returns, he said. With that growth, it will easily surpass Japan to become the world’s fifth-largest aviation market, Hulst said, citing data from the International Civil Aviation Organization.

Shrunken Capacity

Oceanair Linhas Aereas Ltda., which operated under the Avianca Brasil brand and had more than 13% of the market, stopped operating in May, after filing for court protection from creditors. Gol Linhas Aereas Inteligentes SA, which operates a fleet of Boeing aircraft, has been unable to fly 18 of its planes — 14% of its total fleet — because of the grounding of the Max and structural issues in older 737 NGs.

“In the last ten years, Brazil has grown almost twice as fast as the rest of Latin America,” Hulst said. “2020 looks even brighter because we’ll have that capacity back with other carriers” absorbing the capacity left by Avianca Brasil.

Read more: Boeing Loyalist Gol Falls After Inspection Grounds 11 More 737s

While Boeing’s grounded 737 Max garnered 93 negative orders in the first ten months of the year, between cancellations and conversions, Hulst expects the plane to eventually lift sales in the region.

“The market is strong and we have constant dialogue with our customers about their needs,” Hulst said. “This is a long-term play.”

The Max has been grounded all over the world since March, when regulators imposed a flying ban on the jet after two fatal accidents killed 346 people.

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