Boeing: Chinese Investments in the Aviation Fleet Will Exceed $1 Trillion

Chinese airlines are likely to purchase more than 7,000 aircraft worth $1.1 trillion over the next 20 years to meet the growing demand for domestic and international travel, forecasted American aircraft manufacturer Boeing on Wednesday.

Boeing estimates that by 2036, Chinese carriers will buy 7,240 aircraft, raising last year’s estimate by 6.3 percent.

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– This long-term forecast is supported by China’s continuous economic growth, significant infrastructure investments, a growing middle class, and the development of airline business models, said Randy Tinseth, Vice President of Marketing for Boeing’s Commercial Airplanes division.

Boeing estimates that three-quarters of the 7,240 expected orders will be for narrow-body aircraft, thanks to strong demand for flights in China and Asia. The demand for wide-body aircraft is estimated at 1,670 new planes.

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– It is expected that the aircraft fleets of Chinese companies will grow significantly faster than the global average, with nearly 20 percent of global demand for new aircraft being generated by companies based in China, notes Tinseth.

Boeing and its European competitor Airbus are competing for market share in China, the fastest-growing aviation market in the world, with both companies having manufacturing facilities in the country.

Both companies are greatly benefiting from the aggressive expansion plans of Chinese airlines, which are currently experiencing a decline in passenger yield on certain routes due to increased competition and capacity expansion.

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Tinseth believes that the decline in yield is temporary. “These are significant investments that take time, and ultimately they will pay off,” he said.

He also points to a more pronounced optimism regarding long-term economic forecasts, given the unexpectedly strong Chinese economic growth this year.