Boe­ing de­liv­ered a record 200 jet­lin­ers to China last year

The Pak Banker - - 6BUSINESS -

Boe­ing Co. de­liv­ered a record num­ber of air­planes to China last year, out­pac­ing ri­val Air­bus Group SE, and is pre­dict­ing more wide-body or­ders this year as main­land car­ri­ers at­tempt to har­ness boom­ing de­mand for in­ter­na­tional travel. Of the 200 jet­lin­ers Boe­ing de­liv­ered to air­lines and lessors based in China last year, 28 were wide-bod­ies, Dar­ren Hulst, the com­pany's man­ag­ing di­rec­tor for North­east Asia mar­ket­ing, said Fri­day in Bei­jing. The 200 de­liv­er­ies set a record for the Chicago-based plane­maker to a sin­gle mar­ket. The coun­try re­ceived 365 large air­craft in 2015, he said, cit­ing data from the Civil Avi­a­tion Ad­min­is­tra­tion of China.

Air­bus said last week that it de­liv­ered 158 planes to China. "While eco­nomic growth is slow­ing, the growth of air travel cor­re­lates with the parts of the Chi­nese econ­omy that are grow­ing, and we ex­pect that gap to grow," Hulst said. He ex­pressed hope for wide-body or­ders from Bei­jing-based Air China Ltd. and Guangzhou-based China South­ern Air­lines Co. this year.

As China re-bal­ances its econ­omy to­ward con­sumer spend­ing af­ter its slow­est an­nual growth rate in 25 years, the govern­ment is try­ing to en­cour­age air travel by build­ing scores of air­ports by the end of the decade. Pas­sen­ger traf­fic rose 11.4 per­cent last year in China to 440 mil­lion trips, ac­cord­ing to the avi­a­tion ad­min­is­tra­tion. It has pro­jected 485 mil­lion pas­sen­ger trips this year. Chi­nese air­lines and leas­ing com­pa­nies an­nounced or­ders for some 780 planes val­ued at about $102 bil­lion last year.

Boe­ing is due to an­nounce the lo­ca­tion of a Chi­nese fin­ish­ing fa­cil­ity for sin­gle-aisle jets. Air­bus broke ground last week on a sim­i­lar plant for wide­body planes at the same Tian­jin site that has housed its nar­row-body as­sem­bly fa­cil­ity for nearly a decade.

The U.S. plane­maker de­liv­ered a record 762 jet­lin­ers glob­ally last year but said that num­ber will drop to as low as 740 this year. Boe­ing is halv­ing out­put of its iconic 747 hump­backed jumbo jet as it starts build­ing a new ver­sion of the sin­gle-aisle 737, its best-sell­ing and most prof­itable jet­liner. Chi­nese and Middle East­ern car­ri­ers are likely to dom­i­nate Asia-Pa­cific long-dis­tance routes this year, tak­ing mar­ket share from Asian, Euro­pean and North Amer­i­can ri­vals and pres­sur­ing fares, Bloomberg In­tel­li­gence an­a­lyst Ian McFarlane said. Chi­nese air­lines fly di­rect to 114 long-dis­tance des­ti­na­tions, up 150 per­cent in the past five years, ac­cord­ing to Boe­ing. Their mar­ket share in that seg­ment has climbed to al­most half from 36 per­cent in 2011.

Also, more long-dis­tance trips are be­ing flown from lo­ca­tions other than Bei­jing, Shang­hai and Guangzhou, the coun­try's big­gest cities. Boe­ing said 41 of the 90 new di­rect long-dis­tance routes from China in the last five years were from 15 sec­ondary cities, with 66 of the to­tal flown by Chi­nese air­lines.

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