Boeing Sees China Demand Up As Budget Airlines Grow

By GILLIAN RICH, INVESTOR’S BUSINESS DAILY

Boeing predicted Thursday that China will be the largest buyer of passenger planes in the Asia Pacific region over the next 20 years.

Boeing sees a demand of 6,020 new planes, valued at $870 billion, over the next two decades for China, accounting for 45% of total demand for airplanes in the region.

“China’s aviation market is going through dynamic changes,” said Randy Tinseth, Boeing commercial airplanes VP of marketing, in the release. “New business models like low-cost carriers and airplane leasing companies, a new generation of fuel-efficient airplanes and evolving consumer needs are driving demand for more direct flights to more destinations.”

Boeing sees demand for 1,480 new wide-body aircraft like its 777 and 787 Dreamliner as the long-haul segment grows and more international flights arrive in smaller cities outside Beijing, Shanghai and Guangzhou.

“To compete in the tough long-haul international market, our Chinese customers are focused on evolving new business models, adding new destinations, increasing their capacity and resources,” Tinseth said in the release.

More than half of all the commercial planes in China are from Boeing, according to the company.

China is also the home to many budding low-cost carriers, as Beijing lifted restrictions on creating new airlines earlier this year. The new guidelines make it easier for budget carriers to get approval.

In July, China Eastern Airlines announced it would convert China United Airlines into a low-cost airline. Spring Airlines is the largest budget carrier in the country.

Worldwide, Boeing sees the delivery of 36,770 new commercial airplanes during the next 20 years.

Boeing shares were flat at 126.23 in the stock market today.

Boeing is dominating the skies in other markets as well. Europe’s Airbus said Thursday that it has more than 1,000 orders for new aircraft in the first eight months of the year, but cancellations continue to hit net orders, which are only at 722, far behind Boeing’s, at 918.

The Aerospace/ Defense group is ranked No. 115 out of the 197 industry groups IBD tracks.

Follow Gillian Rich on Twitter: @IBD_GRich.
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Record Philippines Growth Despite Devastating Typhoon

from Russia Today

The Philippines’ annual growth rate puts it close to the best-performing economies in Asia, just behind China which grew 7.7 percent last year, says Bloomberg.

President Benigno Aquino aims to achieve 8.5 percent growth by 2016 by turning the country into a manufacturing hub, expecting the recovery in advanced economies to support the GDP rise.

Stronger exports positively contributed to the recovery from Typhoon Haiyan, which inflicted an estimated $15 billion damage to the Philippines.

“The Philippine economy clearly still has strong momentum despite the typhoon,” Bloomberg quotes Edward Teather, an economist at UBS AG specializing on Southeast Asian markets. “That sort of strength in the context of an acceleration in developed nations increases the risk of overheating, something policy makers should keep an eye on,” he added.

Emerging challenges

In early December the World Bank warned against lower 2014 growth in developing markets which were exceptionally vulnerable to risk from US tapering .

The forecast has so far proved true. On Wednesday, the sell-off in emerging markets strongly intensified, after the US Fed said it would further scale back its massive monthly money injections to $65 billion per month.

In the Philippines, the peso lost 0.4 percent and plunged to 45.35 against the dollar at 11:51 AM, which is its lowest in more than 3 years. In the past six month Philippine stocks have fallen more than 10 percent, and is the sharpest drop after Thailand in the Asia-Pacific region.

Detrimental Effects of a Sequester

Traveling around the country and waiting through airport security is already a hassle. But on Friday, February 22nd the White House warned Americans of even longer waiting times as a result of the mandatory government spending cuts that may go into effect next week Friday. Sequestration is an effect of the Budget Control Act of 2011 that raised the debt ceiling in stages as long as government spending cuts were made.

If no compromise on budget cuts is found between the White House and Congress, then the sequester will automatically be effective and government funding will be reduced across the board.
These budget cuts MAY result in a furlough of many people and a reduction in government services. On the other hand, without budget cuts the debt burden of the country keeps increasing, much to the detriment of future generations.

As the old saying goes: You can pay now or you can pay later.