China, In­dia drive de­mand for air­lines

The Star Early Edition - - BUSINESS REPORT - Ka­belo Khu­malo

BOE­ING yes­ter­day re­leased its cur­rent mar­ket out­look (CMO) re­port at the Paris Air Show, which showed that China and In­dia would drive de­mand for new air planes in the next 20 years in a mar­ket it es­ti­mated would be worth $6.1 tril­lion (R79.69trln) by 2036.

The re­port found that China had con­tributed sig­nif­i­cantly to world traf­fic growth for sev­eral years, as its pas­sen­ger growth had in­creased at an av­er­age rate of more than 10 per­cent a year.

Boe­ing’s re­port also found that In­dia’s emer­gence as a high-growth econ­omy was fu­elling more than 20 per­cent pas­sen­ger traf­fic growth a year in its do­mes­tic mar­ket. In­dia was ex­pected to be­come the third largest com­mer­cial avi­a­tion mar­ket by the early 2020s.

The mid­dle class in both coun­tries com­bined grew from 80 mil­lion in 2000 to 135 mil­lion last year, an in­crease of nearly 70 per­cent.

Randy Tin­seth, pres­i­dent of mar­ket­ing at Boe­ing Com­mer­cial Air­planes, said there had been sig­nif­i­cant air­port in­vest­ment in most re­gions of the world with Asia-Pa­cific ac­count­ing for about 40per­cent of that in­vest­ment.

“For ex­am­ple, between now and the end of 2021, nearly $1trln will be in­vested in new and ex­ist­ing air­ports world wide, with Asia-Pa­cific ac­count­ing for about 40per­cent of that in­vest­ment,” said Tin­seth.

Boe­ing’s CMO was the long­est A Boe­ing 737 Max takes part in fly­ing dis­play at the 52nd Paris Air Show at Le Bour­get Air­port near Paris this week. World air travel is on a steady growth tra­jec­tory. run­ning jet fore­cast and re­garded as the most com­pre­hen­sive anal­y­sis of the avi­a­tion in­dus­try. The com­pany ex­pected that a to­tal of 41 030 planes would be de­liv­ered across the globe in the next two decades with a lion share of this ex­pected to be de­liv­ered to Asi­aPa­cific at 16 050 planes.

North Amer­ica would take re­ceipt of 8 640, while the Mid­dle East was pro­jected to take 3 350 new planes in the next 20 years.

Europe would take pos­ses­sion of 7 530 new planes in the pe­riod, while Africa was ex­pected to have 1220 new planes in its skies by 2036.

Tin­seth said the sin­gle-aisle seg­ment would see the most growth over the fore­cast, fu­elled by low-cost car­ri­ers and emerg­ing mar­kets. He said 29530 new air planes will be needed in this seg­ment, an in­crease of al­most 5 per­cent over last year.

“Pas­sen­ger traf­fic has been very strong so far this year, and we ex­pect to see it grow 4.7per­cent each year over the next two decades. The mar­ket is es­pe­cially hun­gry for sin­gle-aisle air planes as more peo­ple start trav­el­ling by air,” he said.

Mean­while, Boe­ing re­ceived more or­ders and ex­pres­sion of in­ter­est at the Paris Air Show than its ri­vals, Air­bus.

The US com­pany said yes­ter­day that it had se­cured 571 new or­ders dur­ing the in­dus­try event, while Air­bus said it won new com­mit­ments for a to­tal of 326 air­craft.

This in­cluded firm or­ders for 144 air­craft worth $18.5bn and ex­pres­sion of in­ter­est for 182 air­craft worth $21.2bn.

John Leahy, chief op­er­at­ing of­fi­cer at Air­bus Com­mer­cial Air­craft said: “Our com­mer­cial suc­cess this week at Paris ex­tends our al­ready di­ver­si­fied or­der back­log to a new in­dus­try record of over 6800 air­craft, with 326 or­ders worth $40bn.”

Leah also an­nounced that he would step down from his po­si­tion this year. He is largely cred­ited with lead­ing the mas­sive ex­pan­sion in Air­bus’s mar­ket share from 1993 on­wards.

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