Aerospace giant Boeing is playing the long game, when it comes to China.
And who can blame them, as there is a lot of money at stake.
Over the next 20 years, the Chicago-based firm predicts that China’s domestic passenger market will exceed intra-European traffic by 2030 and North America by 2040.
As a result of this unprecedented growth, Boeing anticipates that Chinese airlines will be in need of 8,700 new aircraft valued at US$1.47 trillion by 2040, according to the company’s 2021 Commercial Market Outlook (CMO), Aerotime Hub reported.
Single-aisle jets will account for nearly 6,500 deliveries, while wide-bodies, including for cargo, will total 1,850 and account for 44% of demand by value, according to Boeing.
The company is still waiting for its 737 Max model to be cleared by Chinese regulators after most major markets approved it to fly again, Bloomberg reported.
Boeing has already delivered around 100 of the new Max aircraft to China, but these cannot fly commercially until the Civil Aviation Administration of China (CAAC) has given its approval.
The airliner had been grounded for 20 months in the wake of two fatal accidents that killed 346 people that were found to be due to malfunctioning of its Maneuvering Characteristics Augmentation System.
The FAA required extensive software upgrades, design changes, and new flight crew training procedures before it cleared the aircraft to resume operations in November 2020.
“Wide body demand in China is expected to be 20% of global deliveries,” read Boeing’s statement.
China’s civil aviation industry will also need more than 400,000 new personnel including pilots, cabin crew and technicians by 2040, Boeing said.
Across its businesses, training, supply chain and other activities, Boeing’s presence and partnerships in China contribute more than US$1.5 billion annually to the economy.
“The rapid recovery of Chinese domestic traffic during the pandemic speaks to the market’s underlying strength and resilience,” Boeing’s China marketing managing director for commercial airplanes, Richard Wynne, said in a statement.
“There are promising opportunities to significantly expand international long-haul routes and air freight capacity,” he said.
“Longer term, there is the potential for low-cost carrier growth to further build on single-aisle demand.”
Boeing has built a half-century partnership with China, providing advanced passenger airplanes, freighters and services to Chinese customers.
China also has a crucial component role on every current Boeing commercial airplane.
More than 10,000 Boeing airplanes fly throughout the world with integrated China-built parts and assemblies, the company said.
Meanwhile, IATA chief economist Brian Pearce sees that a “turning point” could be in sight for airlines in the world’s second biggest economy.
Load factors which hit a low of 40% on sharply reduced operations during the lockdown of key areas of China in February, have now climbed to 60% and more flights are taking to the skies.
“China is now returning to work and relaxing domestic travel restrictions. We’ve seen a slow resumption of domestic air services. Load factors of 60% show that passenger confidence is returning too, albeit slowly,” said Pearce.
Within three years, according to IATA, it will be the world’s biggest market, carrying some 1.3 billion passengers a year.
It’s also a cargo heavyweight. China remains the engine room of the global economy, pumping out goods from its factory floors which are consumed worldwide.
And it is a critical link in the global just-in-time manufacturing process. China both exports and imports equipment and components for immediately assembly as part of the global supply chain.
Passenger jets carry about 50% of the world’s air cargo and the near-grounding of the world’s fleet as a result of covid-19 has severely disrupted that supply chain.
According to Boeing’s order book, China Southern Airlines ordered 50 Boeing 737 MAX in 2015, Air China ordered 16 737 MAXs in 2014, while China Eastern Airlines ordered 14 MAXs in 2014.
Out of China’s Big Three airlines, China Southern is the largest Boeing 737 MAX operator, currently having a total of 24 737 MAX aircraft in its fleet, Planespotters.net data shows.
Adding to that, Air China has a total of 16 MAXs, while China Eastern Airlines has only three 737 MAX aircraft in its fleet.
Sources: Aerotime Hub, Bloomberg, AINonline, MirageNews.com, Boeing.com, IATA