Boeing lifted its forecast for aircraft demand in China in the next two decades, saying a rising middle class would spur leisure and business travel would make it the first US$1 trillion dollar market.
The plane maker projects demand in China for 6,810 aircraft valued at $1.025tn, Boeing said in Beijing on Tuesday. The aircraft maker last year predicted China would need 6,330 new planes worth $950 billion in the next two decades.
In China, “we continue to see very strong passenger traffic growth. We’ve seen a very strong consumer segment of the market”, said Randy Tinseth, the vice president of marketing at Boeing Commercial Airplanes. “The good news for aviation is that is the segment of the economy that services the aircraft market.”
Carriers across Asia are expanding their fleets as economic growth makes air travel affordable to more people, lifting orders for Boeing and Airbus. The more-optimistic outlook from Boeing, which last year announced a plan to build an aircraft-completion centre in China, comes after it delivered a record number of planes to China in 2015.
The plane maker won more orders from Chinese carriers including China Southern Airlines’ Xiamen Airlines unit this year.
Passenger traffic will expand 6.4 per cent annually in China over the next 20 years, Boeing said.
About 71 per cent of the new aircraft demand in China will be for growth, the plane maker said. Including a retained fleet of 910 planes, China will have 7,720 aircraft by 2035, the company said.
The depreciation of the yuan has improved profitability of Chinese airlines and has not dampened orders at Boeing, Mr Tinseth said. The Chinese currency has weakened 4.6 per cent against the dollar in the past 12 months, the worst performer among 11 Asian currencies tracked by Bloomberg.
The aircraft-maker predicted China will need 5,110 new single-aisle jets with a market value of $535bn through 2035, or 75 per cent of total new deliveries. The widebody fleet will triple in size, requiring 1,560 new airplanes. China’s narrowbody and widebody fleet account for about 18 per cent and 5 per cent respectively of the global figures, Boeing said.
In September last year, Boeing said it will open a facility in China with Commercial Aircraft of China to paint, complete interiors of and deliver the single-aisle 737 aircraft to Chinese companies. The US company is still working closely with Chinese partners on the details and will issue a statement at a later date, Mr Tinseth said.
The plane maker said it expects 39,620 new aircraft valued at $5.9tn to be delivered worldwide in the next 20 years.
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