Boeing raises China airplane and services forecast to US$2.9 trillion

Boeing raises China airplane and services forecast to US$2.9 trillion

Boeing, which saw China become the first country to ground the troubled 737 MAX, raised its forecast for plane sales and services for the mainland in its latest China Commercial Market Outlook released in Beijing. The American plane maker said Chinese carriers will need 8,090 new airplanes in the next 20 years, worth nearly US$1.3 trillion, and the country will need about US$1.6 trillion in services to meet airplane passenger traffic in China, which is expected to grow by 6 percent annually. Boeing said the total demand for aircraft and services represents a 7 percent increase over the 2018 forecast.

“China is one of the world’s most dynamic and fastest growing markets,” said Randy Tinseth, vice president of commercial marketing for Boeing. “An expanding middle class, significant investment in infrastructure, and advanced technologies that make airplanes more capable and efficient, continue to drive tremendous demand for air travel.”

Boeing is facing pressures around the world, but China is a key market and Boeing is keeping a keen eye on sales made to Chinese airlines of airplanes made by COMAC, which hopes to take on Boeing and Europe’s Airbus in the single-aisle market. Three Chinese airlines recently announced plans to buy 115 ARJ121 airlines and the C919 single-aisle plane, which is scheduled to start deliveries in 2022 will be aimed squarely at taking sales away from Boeing and Airbus.

Single-aisle airplanes, like the ground MAX, are expected to remain the foundation of the domestic and regional fleets in China, according to Boeing’s report. The company said China will need 5,960 new single-aisle airplanes, representing 74 percent of total new deliveries. The country will also need 1,780 new widebody aircraft, which will triple the country’s current fleet size. “China’s rapidly growing e-commerce and express delivery market will make air cargo a key growth driver as 230 new freighters and 500 converted freighters will be needed,” Boeing said in the report.

The company also said China’s US$1.6 trillion services market will include about US$935 billion in ground and cargo operations services, US$390 billion in maintenance and engineering services, US$200 billion in flight-operations services and US$90 billion in marketing, customer service and corporate services.

China currently has 15 percent of the world’s commercial airplane fleet. By 2038, that number is expected to increase to 18 percent, putting China on pace to become the world’s largest aviation market within the next decade.

Worldwide, Boeing projects the need for 44,040 new commercial airplanes over the next 20 years valued at US$6.8 trillion.