Boeing Says This Year’s China Orders Already Exceed 2013 Total

Sep 04, 2014 4:59 am ET

Sept. 4 (Bloomberg) -- Boeing Co. received 13 percent more orders from China in the first eight months of the year than it got in all 2013 as regional and budget carriers drive growth in the world’s second-largest economy.

Chinese airlines and lessors have purchased 260 planes so far in 2014, compared with 230 last year, Randy Tinseth, vice president of marketing for Boeing’s commercial airplane unit, said today at a Beijing press briefing. The Chicago-based planemaker expects that clients from the country will order 6,020 aircraft over the next two decades, he said, an 8 percent increase over last year’s estimate. Those deliveries would be worth about $870 billion.

“We’ve seen a very strong domestic market for a number of years and that market will continue to be very strong,” Tinseth said, citing the emergence of new low-cost and regional carriers, as well as expansion efforts by major airlines. “For years the carriers have grown internationally at a fairly slow rate. They are starting to expand the rate of growth.”

Asian air travel growth is lifting orders for planemakers, such as Boeing and Airbus Group NV, with China forecast to surpass the U.S. as the world’s largest market within the next 20 years. The country’s economic expansion is making air travel affordable to more people, increasing demand for planes from carriers, such as Air China Ltd. and China Southern Airlines Co.

Boeing estimates that smaller, single-aisle jets will account for about three-quarters of future deliveries. The company has received orders for at least 210 737s and two 777s this year from a low-cost carrier set up by China Eastern, Shanghai-based Juneyao Airlines and BOC Aviation Pte, an aircraft sales and leasing unit of Bank of China Ltd.

New Carriers

Boeing has delivered 61 jets to Chinese clients this year through July, according to data on its website. China Southern, the country’s largest carrier by passenger volume, and Hainan Airlines have each taken delivery of two Dreamliner 787s this year, while Xiamen Airlines received its first last week. China Eastern Airlines Corp., the country’s second-largest carrier by passenger volume, will get its first 777-300ER later this year.

Boeing expects to deliver about 140 planes to Chinese airlines and lessors by year’s end, close to the record 143 it handed over in 2013. The planemaker estimates that China will have a commercial fleet of 6,930 planes by 2033, more than triple the 2,310 it had at the end of 2013.

The number of Chinese carriers with at least 100 planes will increase to 13 by the end of the decade, compared to six now, the CAPA-Centre for Aviation, a Sydney-based airline consultant, said in May.

The country will account for about 40 percent of the estimated 13,460 jets purchased in the Asia-Pacific region over the next 20 years, Tinseth had said July 10. The region will be the largest aircraft buyer over that period, trailed by North America with an expected 7,550 deliveries.

International travel from the country will grow 7.2 percent annually over that period, outstripping a 6.8 percent annual expansion in domestic travel.