- The aviation industry has seen strong growth over the last eight and half years, with passenger traffic numbers exceeding trends and demand in the cargo space returning, said Randy Tinseth of Boeing Commercial Airplanes.
- That comes amid the backdrop of growing trade tensions between the U.S. and China as well as changing customer demands for aircraft which enable direct flights over longer distances.
Over the past eight and a half years, the growth of the aviation industry has been “very strong,” according to one Boeing executive.
“(The) market’s in a pretty good place,” said Randy Tinseth, vice president of marketing at Boeing Commercial Airplanes.
Speaking with CNBC’s Matthew Taylor, Tinseth said passenger traffic numbers have grown above trends and the demand in cargo markets has come back in recent years, resulting in airlines being “at or near record profitability.”
“From a Boeing perspective, our (production) rates are 65 percent in that eight year period. Last year, we had record deliveries and this year we’re on track to even deliver more aircraft,” Tinseth said.
Boeing’s performance comes amid changing customer demands in the industry, with more airlines shifting toward direct service flights instead of traveling through a hub.
One example of a plane that enables such a service is Boeing’s own 787 Dreamliner, which Tinseth said has opened up 180 new markets since going into service in 2011.
“It’s about the right-sized airplane, really efficient aircraft, great economics to open up these routes more profitably,” he said.
Possible trade headwinds ahead
As trade talks between the U.S. and China remain inconclusive, Boeing has been one of the companies under the spotlight for being a potential retaliation target caught in the crossfire.
“There’s no question, this is a global industry,” Tinseth said. “In fact, 80 percent of the aircraft we build, deliver outside of the United States.”
“We’re big proponents and always have been for fair and open trade,” he added, explaining that open markets and greater deregulation translate into better prices for customers.
Voicing his opinion that the growth of the world economy and the aviation industry were symbiotic in nature, Tinseth said Boeing is watching the market “very closely.”
“We recognize the importance of trade and economic growth and we’re hoping, as we go through this, that the governments will understand that as well,” he said.