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Boeing: Mideast to Require 2,980 New Airplanes

Boeing’s 2022 Commercial Market Outlook indicated that passenger widebody aircraft demand continues to be robust. (Asharq Al-Awsat)
Boeing’s 2022 Commercial Market Outlook indicated that passenger widebody aircraft demand continues to be robust. (Asharq Al-Awsat)
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Boeing: Mideast to Require 2,980 New Airplanes

Boeing’s 2022 Commercial Market Outlook indicated that passenger widebody aircraft demand continues to be robust. (Asharq Al-Awsat)
Boeing’s 2022 Commercial Market Outlook indicated that passenger widebody aircraft demand continues to be robust. (Asharq Al-Awsat)

The United States-based aviation giant, Boeing, forecasted that airline fleets will nearly double by 2041. Middle Eastern carriers have successfully managed through challenges brought on by the pandemic by adjusting their business models and increasing usage of freighters to maximize revenue.

Looking ahead, the region’s fleet is forecasted to expand to 3,400 airplanes to serve fast-growing passenger traffic as well as cargo demand, Boeing said in its 2022 Commercial Market Outlook.

“The Middle East region, a popular connection point for international travelers and trade, is also growing as a starting point and destination for business and leisure passengers,” said Randy Heisey, Boeing managing director of Commercial Marketing for the Middle East and Africa, and Russia and Central Asia Regions.

“The region will continue to require a versatile fleet that meets the demands of airline and air-cargo business models.”

According to the report, Mideast airlines will require 2,980 new airplanes valued at $765 billion to serve passengers and trade.

More than two-thirds of these deliveries will enable growth, while one-third will replace older airplanes with more fuel-efficient models.

It said that air cargo traffic flown by Mideast carriers has continued its substantial growth of recent years, as two of the world’s top five cargo carriers by tonnage are based in the region.

To serve future demand, the Mideast fleet is projected to reach 170 by 2041, more than doubling the pre-pandemic fleet.

The report also included these projections for 2041, noting that passenger traffic is expected to grow at 4% annually, while passenger widebody aircraft demand continues to be robust, with 1,290 deliveries supporting a growing network of international routes.

Middle East's single-aisle market will more than double, the report stressed, reaching 1,650 jets to serve regional and international destinations.

It said that demand for aftermarket commercial services including maintenance and repair valued at $275 billion.

The region also will require 202,000 new aviation personnel, including 53,000 pilots, 50,000 technicians and 99,000 cabin crew members in the next 20 years, according to Boeing’s 2022 Pilot and Technician Outlook.

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Investors Weigh Market Risks as Israeli-Iranian Tensions Rise

Traders monitoring the movement of stocks on Wall Street (Reuters)
Traders monitoring the movement of stocks on Wall Street (Reuters)
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Investors Weigh Market Risks as Israeli-Iranian Tensions Rise

Traders monitoring the movement of stocks on Wall Street (Reuters)
Traders monitoring the movement of stocks on Wall Street (Reuters)

As the conflict between Israel and Iran escalates, investors are analyzing several potential market scenarios, especially if the United States deepens its involvement. A key concern is a sharp increase in energy prices, which could amplify economic consequences across global markets.

Rising oil prices could fuel inflation, weaken consumer confidence, and diminish the likelihood of interest rate cuts in the near term. This may prompt initial stock market sell-offs and a flight to the US dollar as a safe-haven asset.

While US crude oil prices have surged by around 10% over the past week, the S&P 500 index has remained relatively stable, following a brief decline after the initial Israeli strikes.

Analysts suggest that if Iranian oil supplies are disrupted, market reactions could intensify significantly. A serious supply disruption would likely ripple through global petroleum markets and push oil prices higher, leading to broader economic consequences.

Oxford Economics has outlined three possible scenarios: a de-escalation of conflict, a full suspension of Iranian oil production, and the closure of the Strait of Hormuz. Each scenario carries escalating risks to global oil prices. In the most severe case, prices could soar to $130 per barrel, pushing US inflation to nearly 6% by year-end. In such a scenario, consumer spending would likely contract due to declining real income, and any possibility of interest rate cuts this year would likely vanish under rising inflationary pressure.

So far, the most direct impact has been felt in oil markets, where Brent crude futures have jumped as much as 18% since June 10, reaching nearly $79 a barrel, the highest level in five months. Volatility expectations in the oil market now exceed those of major asset classes like equities and bonds.

Although equities have largely brushed off the geopolitical turmoil, analysts believe this could change if energy prices continue to climb. Rising oil prices could weigh on corporate earnings and consumer demand, indirectly pressuring stock markets.

While US stocks have held steady for now, further American involvement in the conflict could spark market anxiety. Historical patterns suggest any sell-off might be short-lived. For instance, during the 2003 Iraq invasion, stocks initially dropped but recovered in subsequent months.

As for the US dollar, its performance amid escalating tensions could vary. It may strengthen initially due to safe-haven demand, although past conflicts have sometimes led to long-term weakness, especially during prolonged military engagements.