Global airlines will buy $3.5 trillion of aircraft over the next 20 years to meet relentless demand for travel to and from Asia's burgeoning megacities and renew aging fleets in the West, Airbus
The world's largest civil jetmaker raised its forecast for airplane deliveries over the next 20 years by around 8 percent to 27,800 aircraft, as part of an annual market survey.
That figure includes 900 freighters to keep up with a projected expansion in global trade.
The European company shrugged off turmoil in financial markets, saying population growth and urbanisation would continue to promote strong aviation demand.
The industry has recovered more quickly than expected from the last recession but some are nervous over the short-term outlook.
Some airlines are bracing for a slowdown in business traffic, even in Asia, but all we are talking about is a softening in the growth rate, Airbus sales chief John Leahy told Reuters.
The recovery in the aviation industry perhaps overreached its trend a little bit and we will see a bit of a slowdown or flat period, but by 2012 we will end up in the same place as we would have been. This is a real growth story.
Revenue passenger kilometers -- the number of people boarding planes adjusted for the distance flown -- will grow by an average 4.8 percent per year, which is equivalent to traffic more than doubling in the next 20 years, Airbus said.
The predictions underscore soaring demand for narrowbody or single-aisle jets such as the Boeing 737 and Airbus A320, the backbone of many airlines.
Both planemakers have decided to refresh their best-selling models with new engines to cut fuel costs and see off newcomers such as Canada's Bombardier
Airbus raised its demand forecast for these 100-200 seat aircraft by 7 percent to 19,200 airplanes worth $1.4 trillion between 2011 and 2030. Boeing sees a market worth $2 trillion, though its data includes airplanes from 90 seats upwards instead of 100.
Airbus, which expects to have sold 1,200 of its A320neo jets by the year-end, and Boeing are increasing production rates to keep up with demand.
There is concern, however, over what the planemakers' optimism means for airlines on the eve of a widely watched airline industry profit forecast from lobby group IATA.
The International Air Transport Association halved its forecast for 2011 airline profits in June and could trim it again in the light of Europe's debt crisis and fears of a new U.S. recession. Premium travel is where airlines make most of their cash and is seen as a key guide to business confidence.
A switch toward more fuel-efficient aircraft is underpinning aircraft demand.
Airlines are investing in new lightweight airplanes to lower fuel costs, though Airbus' Leahy points out the industry's record of reducing fuel burn is already more impressive than many observers think.
We were burning the same amount of fuel as an industry in 2010 as in 2000, while traffic in revenue passenger kilometers (RPKs) rose 45 percent, said Leahy.
Airbus sees strong demand for wide-bodied twinjets like the Boeing 787 Dreamliner, which is due to be delivered to its first Japanese customer next week after three years of delays, and smaller versions of its own A350. Airbus hiked its forecast for 250-300 seat jets by 11 percent.
The Airbus survey also acts as a signpost to the next big battle with Boeing over the future of mini-jumbos such as the Boeing 777, which Airbus has countered with its planned
Boeing must decide in the next year or so whether to redesign the 777 or just commission a replacement for the world's largest civil jet engines as it tries to keep its dominance of the 350-400 seat market.
Airbus sees demand for 2,100 new aircraft in this category over the next 20 years.
However, Airbus and Boeing continue to disagree on the demand for the industry's behemoths -- the Airbus A380, the world's largest airliner, with 525 seats, and Boeing's newly revamped 747 jumbo.
Airbus sees a $600 billion market for airplanes with 400 seats or more, representing 1,781 units. Boeing sees demand for less than half that, just 820 planes.
Boeing contends long-haul air travel will splinter into more direct routes, rather than people having to change planes at hubs, a system known as point-to-point travel.
Airbus believes hubs, for which its A380 was designed, will remain essential and that many of these aerial crossroads will become destinations in their own right.
By 2030, 60 percent of the world's population or some 5 billion people will be urbanised, and the number of mega cities will have more than doubled to 87 from today's 39. It is also forecast that over 90 percent of long-haul travelers will fly between these mega-city points, Airbus said.
So far, the market has voted mainly with Boeing, opting for the next generation of mid-sized jetliners such as the 787 with its ability to fly further on less fuel.
But Airbus maintains the A380 project will succeed due to demand for the double-decker in Asia and the Middle East. So far, it has sold 236.
(Editing by Will Waterman and David Hulmes)