Boeing looking to Chinese market for freighter capacity expansion

2019-08-01 09:12:19Global Times Editor : Li Yan ECNS App Download

U.S.-based aircraft manufacturer Boeing announced Wednesday that it is on track to redeliver 17 737-800 Boeing Converted Freighters (BCFs) in 2019, with five conversion lines in operation. The company is also exploring the possibility of adding more capacity in China.

This year's expected output will more than double the eight 737-800BCF redeliveries the company recorded in 2018, Boeing said in a statement sent to the Global Times on Wednesday.

The announcement came amid increased demand for freighters in China, which boasts one of the world's largest and fastest growing e-commerce and express delivery markets. 

Compared to large 747 or 767 models, the 737-800 model is more suitable for small airports in regions that are not that economically developed, but where demand for online deliveries is on the rise, said Yu Ming, an industry observer.

"More people are buying fresh food online, which requires timely deliveries, so revamping smaller passenger airplanes to freighters will save the time previously cost from a bigger airport to the destination by road," Yu told the Global Times on Wednesday.

The 737-800BCF is designed to serve a distinct market different from Boeing's large freighters. While large freighters carry high-density cargo on long-range routes, the 737-800BCF is primarily used to carry express cargo on domestic routes, the company said.

Boeing is betting on China's freighter market amid the ongoing China-U.S. trade dispute. The Global Times reported in May that China could trim Boeing's orders provided trade tensions between the two countries escalated.

In May, Air China, China Southern Airlines and Xiamen Airlines demanded compensation from the aircraft manufacturer for the losses they suffered for grounding the flawed Boeing 737 MAX aircraft after two deadly crashes.

"I think Boeing's move of investing further in the China's freighter market is not much related with the China-U.S. talks," said Bai Ming, a deputy director of the International Market Research Institute of the Chinese Ministry of Commerce.

"Experiencing the political uncertainties caused by the trade frictions as well as the challenges brought by the 737 MAX accidents, Boeing values the Chinese market more than ever," Bai told the Global Times on Wednesday.

"The expansion of the 737-800BCF program demonstrates our continuous commitment to China, while solidifying Boeing's leadership in the air cargo market," said Sherry Carbary, President of Boeing China.

Boeing Shanghai Aviation Services and Taikoo (Shandong) Aircraft Engineering Company are operating the conversion of 737-800 freighters.

China's annual growth rate of its freighter airline industry is expected to surpass that of its passenger airline sector, according to Diao Weimin, a professor at Civil Aviation Management Institute of China.

According to Boeing market forecasts, over the next 20 years, China will need 725 additional freighters, 365 of which will be comprised of standard-body passenger-to-freighter conversions. This demand represents over a quarter of the 2,820 additional freighters in demand worldwide. 

Diao told the Global Times Wednesday that compared with the effect brought by China-U.S. trade row, the 737 MAX aircraft accidents still pose big challenges for Boeing.

If the model is required to exit the market, it would damage the company, said Diao.

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