Boeing raises China plane forecast by 6.2 percent, delivers 64 aircraft in August
Boeing publishes surprisingly upbeat forecasts of demand for its aircraft in China
Global demand for new aircraft is likely to decline for decades due to the Covid-19 pandemic. However, Boeing recently raised its industry forecast for China airliner sales over the next 20 years, higher than it was in the pre-pandemic period..
Boeing currently expects total aircraft sales to China to total 8,600 new aircraft, worth $ 1.4 trillion over the next 20 years. This estimate is 7% higher than last year‘s forecast.
This is just one example of how China’s economic recovery is outstripping the rest of the world. This is also in stark contrast to the drop in global demand forecast by Boeing just a month ago: globally, Boeing cut its 10-year forecast for aircraft industry sales to 18,530, down 11% from the 2019 forecast, and cut its 20-year forecast to 43,000 aircraft, 2% less than a year ago.
Boeing regularly publishes industry forecasts for aircraft demand in various regions of the world.
The company’s optimistic outlook on the Chinese market is driven by its expectation that passenger traffic will grow much faster than in the rest of the world. Boeing expects China’s annual passenger traffic growth to be 5.5% over the next 20 years, compared with just 4% annual global passenger traffic growth worldwide..
«While Covid-19 has seriously impacted all passenger markets worldwide, China’s fundamentals remain robust and robust.», – said Richard Wynn (Richard Wynne), Boeing Managing Director of Marketing China.
Wynne mentioned that China’s recovery from Covid-19 is ahead of the rest of the world, along with continued government investment in transport infrastructure, large populations to boost air traffic, and «thriving domestic market», that the presence of all these factors means that this region of the world will prosper.
According to Johns Hopkins University’s Global Covid-19 Cases Tracking, China has recorded only 922 infections and three deaths in the last month. For comparison, 1,173 people died from coronavirus in the United States alone on Thursday.
China, which is the world’s second largest economy, was the only major world power to escape a recession this year. The country has achieved relatively quick recovery through a range of measures, including lockdown and population tracking policies, and government funds to boost consumer spending and infrastructure spending. The World Bank predicts that China’s GDP will grow 1.6% this year, while the global economy as a whole will contract 5.2%.
According to the International Air Transport Association (IATA), the decline in global air travel will continue until at least 2024 – even if the pandemic ends much faster, as recessions traditionally cause long-term difficulties in air travel. And this circumstance dealt a long-term blow to Boeing’s prospects..
The company, which has backorders for nearly 4,300 aircraft, has nevertheless cut production plans and is cutting nearly 15% of its jobs. Boeing has faced obstacles in selling its products to China in recent years due to trade tensions between the U.S. and China under the Trump administration..
The company has only booked one new order since late 2017 – two freighters ordered by China Cargo in May, although it is likely that some of Boeing’s other leasing sales are for Chinese customers..
Boeing (BA) and rival Airbus (EADSF) are actually holding a stranglehold on the entire large commercial aircraft market for two, although the Chinese Commercial Aircraft Corporation of China, or COMAC, is also making considerable efforts to enter the global market..
But the CEO of Boeing Dave Calhoun (Dave Calhoun) told investors last month that he believes Boeing is well positioned to compete for sales in China.
«We had a great relationship. We continue to support them», – he said. «And airlines need such an elevator, and we are one of only two people in the world who can provide it. And this will go on for a long time».