Boeing ups its forecast for China market

Boeing Co has raised its forecast for China, saying that over the next 20 years, Chinese carriers will need 8,090 new airplanes, worth nearly $1.3 trillion based on list prices, to meet fast-growing airplane passenger traffic in the country, especially rapid rising demand from second-tier cities.

China's air travel passenger traffic is expected to grow at 6 percent annually in the next 20 years, higher than Southeast Asia, Europe and North America, the US aircraft manufacturer announced in its latest forecast in Beijing on Tuesday.

"China is one of the world's most exciting and dynamic markets, it became our largest market last year," said Randy Tinseth, vice-president of commercial marketing at Boeing.

"An expanding middle-income group, significant investment in infrastructure, and advanced technologies that make airplanes more capable and efficient, continue to drive tremendous demand for air travel," he said.

By 2023, another eight airports nationwide will finish construction, including the upcoming Beijing Daxing International Airport, and other new airports in Dalian, Qingdao, Xiamen and Chengdu.

Chinese carriers have rapidly expanded their flight networks. In the past five years, the compounded annual growth rate of the flights that connect second-tier cities stood at 11.3 percent, much higher than the number of flights that connect major hubs and smaller cities, Boeing said.

For long-haul international flights, the annual growth rate of flights in the past five years was 35 percent for second-tier cities. Now, Chinese mainland carriers operate 132 direct international flights, accounting for 65 percent of the global market.

"Many Chinese airlines would like to launch new flights to major hubs, but flight times available are quite tight and it is difficult to apply for flying rights. For example, Hainan Airlines launched a large number of international long-haul flights that connect major domestic cities and smaller overseas cities, or second-tier Chinese cities and major foreign cities in the past few years," said Lin Zhijie, a civil aviation industry analyst.

In the next two decades, Boeing predicted China would need 5,960 new single-aisle airplanes, representing 74 percent of total global deliveries. Demand for wide-body airplanes is 1,780, which will triple the country's current fleet size. In addition, China will need a significant number of regional aircraft and cargo aircraft.

Meanwhile, Tinseth said the B737 MAX, which has been grounded worldwide after two fatal crashes since March, is expected to resume flights in the early fourth quarter, but the final decision will depend on the US Federal Aviation Administration.