Over the next two decades, almost $3 trillion worth of aviation industry business would be generated in China because of the growing demand for aviation in the country, Boeing has claimed.

The Chinese aviation market will soon become the largest aviation market of the world and would require a total of 8,090 new planes by 2038, predicted the United States based plane manufacturer in its latest market outlook. One-in-five airline passengers will be Chinese within a decade, Boeing predicts.

And according to the current list prices for planes, the plane making industry would face potential business of about $1.3 trillion. The forecast by Boeing claims that business related to associated services to maintain fleets would be even larger at about $1.6 trillion. That would take the total possible business to be generated from the Chinese aviation market would be worth almost $3 trillion for the global aviation industry, Boeing has predicted.

Till 2038, there would be an average annual growth of 6 per cent in passenger traffic within China, Boeing has said, and has added that within a decade, the size of the middle class in the country would be doubled.  There will be significant increase in the outward bound international travel from China even though the lion’s share of growth would be accounted for by domestic flights, said 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,” said Randy Tinseth, vice president of commercial marketing for Boeing said in a statement on Tuesday.

Boeing also provided a possible breakup of the type of planes that would be required by China’s need for new and replacement aircraft between now and 2038 which would include 5,960 numbers of single-aisle jets, 1,780 widebody planes, 230 freighters, and 120 regional jets.

Boeing forecast that by 2038, the world would need $6.8 trillion worth of new airplane amd an additional $9.1 trillion in services.

Boeing has so far delivered more than 2000 planes to China and about one forth of production line of the plane maker now delivered to Chinese customers. One third of its 737 planes are currently delivered to China, Boeing has said.

A 737 Max 8 was delivered to Air China by Boeing in December last year which is also the first plane from the plane maker that was completed in China for a domestic client.

But the use of 737 MAX 8 planes was suspended in China following an order from Chinese aviation regulatory authorities on March 11 after two fatal accidents involving the plane model within a period of just five months. Most of the other aviation regulators followed suit in just two days which indicate the growing importance of China as an aviation regulator.

(Adapted from CNBC.com)

Categories: Economy & Finance, Geopolitics, Strategy, Sustainability, Uncategorized