SEATTLE ( TheStreet) -- For the year, just three Dow stocks show a double-digit gain. One is Boeing ( BA), the Dow leader for the year, which issued its annual 20-year aircraft market forecast Thursday. In truth, Boeing's forecast -- which lays out one long growth cycle -- varies little from year to year. Inevitably it shows that world air traffic continues to grow, mostly in emerging markets, especially in China. As traffic grows, demand for new aircraft also grows. This benefits Boeing and Airbus, the world's only large aircraft manufacturers.
Although Boeing and Airbus have market shares most companies can only dream of, they do face various problems. Their unionized workers occasionally strike. The introductions of their new model aircraft inevitably take longer than planned. (Boeing said Thursday that the long-delayed delivery of the 787 may slip from late 2010 into early 2011.) And their customer base -- the world's airlines -- comprises an intensely cyclical, historically unprofitable industry, inducing various periods of fear among investors in the aircraft makers.
Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, told reporters on a conference call that making the projections is not horrendously difficult, given that air travel has generally grown about 5% annually since about 1980. As a result, "we've been very close in terms of forecasting air travel," he said. "Plus or minus (a bit), that's our call." Traffic dipped a bit last year, due to the global recession, but Boeing expects normal growth over the next four to five years. One potential hazard is that in the first half of the current decade, Tinseth expects two companies, Canada's Bombardier and China's Comac, to enter the narrow-body aircraft market. Over time, increasing competition is probably the biggest threat the world's aircraft duopoly faces. For the year, Boeing shares are up about 19% while the Dow is down about 1%. The other two double digit gainers in the Dow this year are Caterpillar ( CAT), up 16%, and McDonald's ( MCD), up 14%. -- Written by Ted Reed in Charlotte, N.C.