Despite the global economic downturn, China will remain the world's fastest growing commercial aviation market, accounting for 41 percent of Asia-Pacific airplane demand over the next two decades, Boeing said yesterday.
"Air travel is, and will continue to be, an integral part of the social and economic fabric of our world. The long-term market outlook is still strong," said Randy Tinseth, vice-president of Boeing Commercial Airplanes.
"China will continue to be the most dynamic market in the world and the economic growth of the country will reshape the landscape of our industry," Tinseth said.
China will need about 3,710 new airplanes worth about $390 billion over the next 20 years and one-third of that demand is already in aircraft manufacturers' backlog, according to a Boeing report issued yesterday.
Boeing's forecast is based on an annual GDP growth rate of 7.1 percent in China over the next two decades.
The Chinese government recently unveiled a series of measures to stimulate the economy after the country's GDP growth slowed to 9 percent year-on-year in the third quarter, the slowest pace in the past five years. The measures include raising tax rebates for a quarter of its export portfolio, embarking on various infrastructure projects and efforts to stimulate the sagging real estate sector.
Battered by high and volatile oil prices, the global airline industry will have to spend $130 billion more on fuel this year than it did in 2003, Tinseth said. Due to the sluggish world economy, global air traffic growth is expected to slow to 2-3 percent this year and be "further pressured down next year", he said.
The global airline industry is expected to post losses of $5.2 billion in 2008, according to the International Air Transport Association. Most of the losses are projected for the US market.
Boeing has received 633 net orders so far this year and has a backlog of over 3,700 aircraft. Its European rival Airbus has received over 700 orders and has a backlog of over 3,800 jets.
The US airplane manufacturer reached a tentative agreement with machinists on a new four-year contract covering 27,000 employees in the United States on Tuesday. If employees vote to approve the offer, it will end the strike at its factories that started on Sept 6.
For eight weeks Boeing's assembly lines have been idle and no planes were delivered to customers. The strike could possibly further delay the first delivery of the B787 Dreamliner, whose first flight was scheduled at the end of this year.