Boeing Confident in China With Thousands of Jet Orders Forecast

(Bloomberg) -- Boeing Co. expects China to continue to be the main driver in aviation growth worldwide over the next 20 years, saying Chinese airlines are likely to buy 8,600 new airplanes worth $1.4 trillion during the period.

The U.S. manufacturer said its outlook reflects an expected robust recovery for China from the Covid-19 pandemic, driven by its expanding middle-class, economic growth and urbanization, as well as government investment in transport infrastructure, regional traffic flows and a flourishing domestic market.

“Despite the challenges imposed by the pandemic, China’s projected airplane and services market represents a nearly 7% increase over last year’s 20-year commercial market outlook forecast,” Boeing said in a statement Thursday. About 25% of worldwide aviation growth over the past decade has come from China, a trend that’s expected to continue, the company said.

After being hardest hit initially by the coronavirus outbreak, which emerged in the Chinese city of Wuhan early this year, China’s local aviation market has returned to close to pre-pandemic levels in terms of passenger capacity.

Boeing said it expects annual passenger traffic growth of 5.5% in China over the next 20 years. Single-aisle jets, which include the 737 family, are the main driver of growth, with more than 6,450 new orders forecast for the period. Widebody demand will account for 18% of China’s deliveries, down 4% from last year’s forecast due to the slower recovery in long-haul traffic.

China was the first country to ground Boeing’s 737 Max in March 2019 following deadly crashes in Indonesia and Ethiopia, starting a domino effect as regulators in other nations soon followed suit.

Boeing’s long wait to get the Max back in the skies could be nearing an end, with the U.S. aviation regulator potentially approving its return to commercial service as soon as next week. Regulators in Europe have also signaled they’re close to giving the Max clearance to fly, saying they’re satisfied with Boeing’s proposed changes to the jet.

China still hasn’t given a clear timetable for its return -- the head of the country’s civil aviation authority last month said only that the Max was “high on our minds” and that there’d been some collaboration with Boeing and U.S. and European counterparts.

Boeing announced an additional 7,000 job cuts at the end of last month, bringing the number of losses from layoffs, retirement and attrition to 30,000 by the end of next year, pr 19% of its pre-pandemic workforce.

The Chicago-based company also said Thursday that Chinese airlines will acquire $1.7 trillion of aviation services over the next 20 years, and that there’s an opportunity for strong growth in demand for freighters. Long-term aviation industry growth in China could result in the need for 395,000 commercial pilots, cabin crew and technicians to fly and maintain the country’s fleet, Boeing said.

©2020 Bloomberg L.P.