I have had the honor to present Boeing’s market outlook for 12 years now. The numbers have changed, but a few big trends have stayed the same: Our industry needs more airplanes and more and more of those jets are destined for China.
China remains one of the most exciting, fastest growing and dynamic aviation markets in the world.
I was in Beijing last week and I shared our newest commercial market outlook with a group of Chinese journalists. It was nice to see a good turnout and some familiar faces.
I shared with them the broad industry trends and then projections specific to China. In particular, over the next 20 years, China will need 7,690 new airplanes, a 6.2 percent increase from our last forecast as operators keep pace with the growing demand for air travel. With the value of these airplanes at $1.2 trillion, China remains the world’s only trillion-dollar airplane market.
Here are few other facts to consider:
- 5,730 new single-aisle airplanes are needed, accounting for 75 percent of total new deliveries
- 1,620 new wide-body airplanes are needed—triple the country’s current fleet size
- Air cargo operators will need 200 new freighters and 470 converted freighters
- China currently has 15 percent of world’s commercial airplane fleet; by 2037 it will be nearly 20 percent
- Passenger traffic expected to grow 6.2 percent annually
The news doesn’t stop there. Boeing forecasts China will need to purchase $1.5 trillion in commercial services to support the country’s growing fleet of airplanes, making it one of the largest services markets in the world. This accounts for 17% of the world demand. These services will be required to maintain or restore the airworthiness of an aircraft and its systems, components, and structures. Another major category includes Flight Operations, which covers services associated with the flight deck, cabin services, crew training and management, and airplane operations. Growth of services is expected to grow 5.6 percent annually.
What is driving this tremendous demand? Credit China’s expanding, rising middle class. This segment of the population has more than tripled in the last 10 years and will nearly double again over the next 10 years. In fact, in 10 years, China’s middle class will be larger than the entire population of the United States.
A big contributing factor to this growth is urbanization. More people in China are living in urban areas. This helps air travel since those living in urban areas have higher disposable income and have better access to aviation.
This is what has led to the exponential rise in the demand for air travel, within China and abroad. It isn’t just airlines based in China that are taking advantage of this growth opportunity. One hundred thirty different international carriers are now offering service to China.
We are honored that China continues to love Boeing airplanes. More than half of the airplane fleet in China is built by Boeing. What’s interesting is how that fleet has grown.
During the first 45 years of our partnership with the Chinese aviation sector, we delivered 1,000 aircraft. We expect to deliver the 2,000th aircraft sometime in 2019 after only six years. Today, about 25% of our airplane deliveries go to Chinese customers, either through direct purchase or through lease.
Not to mention, more than 9,000 Boeing airplanes fly throughout the world with parts and assemblies built in China. China has a role in every one of Boeing’s commercial airplane models: the 737, 747, 767, 777 and the newest and most innovative airplane, the 787 Dreamliner.
I will be taking to the air again soon to visit other regions to discuss their specific market outlook and what it means for our business and the future of commercial aviation. I hope you will join me over the next few months here on the blog. As always, I welcome your comments and questions!