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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