In a recent interview, Boeing CEO Dave Calhoun expressed his optimism about the recovery of travel demand, stating that it's more resilient than he had anticipated.
A Resilient Recovery
Calhoun noted that the recovery of travel demand has been stronger than he expected. He said, "It’s more resilient than I ever would have imagined coming out of Covid. A lot of pent-up demand for just passenger traffic and tourism, and businesses coming back". This resilience has been a pleasant surprise for many in the aviation industry.
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Pent-Up Demand
The CEO pointed out that there is a significant pent-up demand for passenger traffic, tourism, and business travel. As economies gradually reopen and travel restrictions ease, this demand is expected to continue to grow.
Robust Order Books
Calhoun also mentioned that the order books and demand for proposals to meet this demand are "as robust as [he’s] ever seen in his career". This suggests a positive outlook for the aviation industry in the near future.
Supply Chain Challenges
Despite the optimistic outlook, the aviation industry faces challenges. Both Boeing and rival Airbus have stated that supply chain constraints are curtailing their abilities to ramp up production. In August, Boeing delivered 35 planes, down from 43 aircraft in July.
China Market And Comac
The Chinese market has bounced back to its pre-pandemic state, providing ample opportunities for Boeing and Airbus to market their products, particularly as airlines are upgrading and expanding their fleets. Boeing's CEO, Calhoun, remains optimistic about his company's prospects in China despite the potential competition from COMAC’s C919. He believes that China, like the rest of the world, requires more airlift capacity. The primary obstacle is the strained US-China geopolitical relations, which he hopes will soon ease, allowing Boeing to collaborate freely with Chinese airlines. The C919 is deemed inferior to its Airbus and Boeing counterparts, particularly in terms of range. Boeing predicts that it will take COMAC a significant amount of time to develop a worthy competitor to the A320neo and 737 MAX. Calhoun sees the potential competition from COMAC as a positive development for the aviation industry given the robust and rapidly growing market. He welcomes the entry of the C919 as it would contribute to meeting the rising travel demand and believes that the market can accommodate three manufacturers.
Conclusion
The resilience of travel demand recovery has surpassed expectations, providing a positive outlook for the aviation industry. However, supply chain constraints remain a challenge. As the industry navigates these challenges, the focus will be on meeting the growing demand for air travel.
Read More:
- Boeing's CEO is not 'overly anxious' about China's C919
- Boeing CEO predicts supply chain pressure through 2024
