Beijing: China will become the world’s first trillion-dollar aviation market as its expanding middle class takes to the skies in ever greater numbers, US manufacturer Boeing predicted Tuesday.
The world’s most populous country is expected to add more than 6,800 new aircraft to its commercial fleet worth $1.03 trillion by 2035, Boeing said in its annual China Current Market Outlook.
Passenger traffic is estimated to increase 6.4% annually in China over the next 20 years as the country reforms its economy to rely more on consumption and the service industry to drive growth, said Randy Tinseth, vice-president of marketing at Boeing Commercial Airplanes.
“As China transitions to a more consumer-based economy, aviation will play a key role in its economic development,” he said.
Chinese carriers have been expanding their fleets and adding new point-to-point services to cater to both leisure and business travel demand from an increasing number of affluent consumers in China and throughout Asia, Boeing said.
“The continuing expansion of China’s middle class, coupled with new visa policies and a wide range of wide-body airplanes with new technologies, capabilities and efficiencies, gives us every reason to expect a very bright future for China’s long-haul market,” said Tinseth.
Of the 6,810 new aircraft it will need during the 2016-2035 period, 75% will be single-aisle planes with 90-230 seats, Boeing said.
A total of 1,560 wide-body aircraft are seen as needed, according to the company.
China’s rapidly growing e-commerce business—already the largest in the world—also drives demand for cargo planes, with 180 new freighters and 410 converted freighters forecast to be added over the next two decades.
A quarter of Boeing’s deliveries over the last three years were to Chinese airlines, it says.
Boeing, maker of the 737 MAX and 787 Dreamliner, competes with Europe’s Airbus for global dominance in the aircraft market.
The US firm says it made more than half of China’s commercial jetliners currently in operation, while Airbus says it has an almost 50% share.
But both Boeing and Airbus are facing rising competition from Chinese rivals, who are supported by the government as Beijing sees the lucrative, technology-intensive industry as of strategic importance and a symbol of national pride.
In November last year, state-backed Commercial Aircraft Corp. of China (COMAC) rolled out the C919, China’s first domestically developed narrow-body passenger plane that would compete with Boeing’s 737 and Airbus’ A320.
Airbus in March started construction on a new facility to deliver wide-body planes in China while Boeing has reportedly submitted to the Chinese government plans for a factory in the eastern province of Zhejiang.
Tinseth said Boeing was “absolutely” vigilant about Chinese competitors.
“With such a large domestic base, there is an opportunity” for a Chinese airplane maker, he told reporters.
“There are areas with COMAC where we’re partners, and there are areas where we compete. We will be strong partners and we will be strong competitors,” he said.
Boeing said in July it expected a combined 39,600 jets worth $5.9 trillion will be needed globally over the next 20 years.