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Boeing sees China needing 6,020 new planes

2014-09-05 11:18 Global Times Web Editor: Qin Dexing

Forecast for next 20 years to 2033; competition in country with Airbus seen as increasing

US plane manufacturer Boeing Co forecasted on Thursday that demand in China will reach 6,020 new airplanes in the next 20 years, up 8 percent from a previous two-decade estimate made in 2013.

Boeing's estimate of 6,020 aircraft in China, valued at $870 billion, is expected to account for nearly 45 percent of total delivery in the Asia-Pacific region over the forecast period, according to a press release posted by the company on its website.

Analysts agreed with Boeing's forecast, saying that the aircraft market in China is booming thanks to the nation's strong economic growth and increasing outbound travelers.

China Tourism Academy estimated in a report released in July that China's outbound tourists would surge 18.2 percent year-on-year in 2014, hitting 116 million.

"In order to cope with such a rise, domestic carriers will open more long-haul routes, which will further drive up the need for highly-efficient airplanes developed by multinational companies," Wang Jiangmin, a research fellow with World Civil Aviation Resource Net, based in Hefei, East China's Anhui Province, told the Global Times on Thursday.

In one of the most recent developments, China Southern Airlines Co, which took delivery of seven Boeing aircraft in late February, started a non-stop route from Guangzhou, South China's Guangdong Province, to New York in August.

Meanwhile, Air China Ltd also reportedly kicked off three new routes to the US from July 2013, including launching three weekly flights to Honolulu early this year.

Wang noted that air-route networks in China, such as from second-tier cities to international destinations, are still incomplete and inadequate.

Boeing planes make up more than half of Chinese airlines' fleets, according to an annual China Current Market Outlook report posted by the company on its Sina Weibo account on Thursday.

Although Boeing has the lead in the world's second-largest aircraft market, it still faces a growing challenge from rival Airbus Group, said Li Lei, an aviation analyst with Beijing-based China Minzu Securities.

Boeing revealed in a meeting in Beijing earlier this year that the company delivered 143 aircraft in 2013, while Airbus Group reportedly delivered 133 planes over the same period.

"In the last five to 10 years the gap between Airbus and Boeing in the Chinese market has gradually narrowed. Airbus' increasing investment in its Tianjin assembly factory will give Airbus an edge over Boeing in China," Li told the Global Times on Thursday.

Airbus, the France-based European airplane maker, set up a plane assembly plant in Tianjin in 2009 in partnership with Aviation Industry Corporation of China and agreed in March to extend the joint venture to make A320 aircraft for another 10 years, while most Boeing planes in China are still assembled in the US.

Besides the intensifying competition from each other, Li also noted that Boeing and Airbus will likely be challenged by State-owned Commercial Aircraft Corporation of China Ltd (COMAC) in the future.

COMAC was formed with the approval of the State Council to build large passenger aircraft and reduce the nation's dependency on foreign markers.

Its narrow-body airliner C919 is believed to be the largest commercial plane designed and made by China.

The plane is expected to be delivered in 2016, and would likely be something that COMAC could bank on to compete with Boeing and Airbus in the Chinese market, Li said.

Boeing also found that China's aviation industry is going through changes.

There are increasing demands for "an airplane lineup that has high efficiency, low operating costs, environmentally progressive technologies and a great passenger experience," Randy Tinseth, vice president of marketing with Boeing Commercial Airplanes, said in the press release.

Passenger growth has been lower than plane capacity growth for the nation's carriers, and in addition to the hike in airplane fuel prices, utilizing capacity more efficiently is an urgent issue for the carriers to deal with, said Wang.

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