European airlines will spend $1.1 trillion on new aircraft over the next two decades as air travel booms and demand for smaller, low-cost carriers soars, according to US giant Boeing.
The aircraft maker predicts that European airlines will need more than 7,500 new aircraft by 2035, which, based on its current catalogue prices, would mean a spending spree of $1.1 trillion to help meet the rising demand for single-aisle aircraft.
European airlines acquired more than 240 new airplanes in 2015, of which 67pc were single aisle, or narrow-body planes. But Boeing estimates that by 2035 almost 80pc of new aircraft entering the European market will be smaller carriers, at a total cost of up to $640bn.
As a result the number of narrow-body planes carrying European passengers will climb from just over 3,300 in 2015 to almost 6,000 by 2035, according to the aircraft giant.
Airlines also face a looming ‘replacement cycle’ from the end of this decade and through the 2020s as many larger aircraft reach the end of their 25-year lifespans.
By 2035 aircraft replacement will account for 43pc of European aircraft purchases.
Shauna Basset, a market analyst for Boeing at its Seattle headquarters, said the company had revised its annual figures higher because previous forecasts had underestimated the growth of low-cost carriers.
The trend towards smaller aircraft is already well under way but is expected to speed up as passenger traffic climbs and airlines plough the yield from record profit margins into aircraft that service new direct routes between cities.
Boeing predicts that global passenger traffic will climb 6pc by 2035. The rosy outlook follows net profit margins of almost 4.9pc last year as fuel costs fell; margins are expected to inch up to 5pc in 2016 – numbers not seen for almost a half century.
The growth in passenger traffic and demand for smaller aircraft is expected to be particularly marked in Asia, where the emerging middle classes will drive changes in the Asia-Pacific market.
In Asia, the number of single-aisle planes will more than double from more than 4,500 operating in the region last year to over 12,500 within the next 20 years.
The Asia-Pacific market is expected to rely heavily on smaller aircraft such as its 787-8 and 787-9 aircraft as well as the larger 777 and 777X planes, which offer the size and travel range that are needed to meet its rising demand for long-haul flights to North America.