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Boeing and Airbus have 'banner year'

By Amy He in New York (China Daily USA) Updated: 2015-12-30 10:45

Boeing and Airbus have 'banner year'

China Postal Airlines officially signed an agreement with Boeing on Dec 15 to buy seven 757-200 aircraft and to transform 10 Boeing 737-800 passenger aircraft into cargo aircraft to substantially increase its air capacity. It was the biggest aircraft-purchase order in the history of China Postal Airlines. [Photo/Xinhua]

Boeing Co and France-based Airbus Group SE Airbus have been competing against one another for a slice of the growing Chinese air travel market, and 2015 has been a "banner year" for both airplane manufacturers, according to sales figures and aviation experts.

China Southern Airlines, the country's largest carrier, announced last week a $2.3 billion purchase of 10 Airbus Group SE aircraft for its fleet, with the order coming just after it said it would buy more than 100 planes from Boeing for $10 billion.

"Airlines have to buy new airplanes, so Boeing and Airbus are having a banner year in China," said Michael Boyd, president of Boyd Group International, an aviation-consulting firm in Evergreen, Colorado.

Through November, Boeing said it had sold 1,335 aircraft to China, 1,190 of which have been delivered. During Chinese President Xi Jinping's visit to the United States, he signed an order for 300 jets valued at $38 billion.

Airbus does not break down sales figures by country. It has sold 4,344 planes to the Asia-Pacific region through the end of November, of which 2,378 have been delivered, the company said.

Although "one mustn't look at the events of just one year to determine who is performing the best," said Brian Foley, an aviation analyst and president of Brian Foley Associates in Sparta, New Jersey, "Airbus had some success with China previously and this was Boeing's year. I would now put each company on relatively equal footing, which is in China's best interest."

Boyd said: "Boeing's been doing very well. I think performance between the two airlines is neck and neck, and has been for years. It's good for everybody."

The 10 wide-body Airbus aircraft for China Southern Airlines will be delivered between 2017 and 2019, and will increase the airline's capacity by 4 percent, the Guangzhou-based carrier said in a Dec 23 statement.

One week earlier, China Southern Airlines said it will buy 80 of Boeing's 737s - 30 737 Next Generation jets and 50 737 Max aircrafts - and its subsidiary Xiamen Airlines is buying 30 737 Max jets, according to The Associated Press. The announcement came just a couple of months after Boeing said that it would build a finishing plant in China, though it is unclear whether the China Southern deal is part of that agreement.

Foley said that the China Southern sale was probably not due specifically to that announcement but is the "result of years of careful choreography."

But Boyd thinks that Boeing is benefiting from building the plant in China. "Of course the deal helped. This is how you posture - when President Xi is here, that's when you announce it. That's what makes sense - everybody wins and gets something out of it," he said.

"China Southern's commitment is a solid endorsement of the popularity of the Next-Generation 737 and 737 MAX," said Ihssane Mounir, senior vice-president of Northeast Asia sales at Boeing Commercial Airplanes, in a statement. "We share an enduring partnership with China Southern and we are excited to see that the 737 airplanes will play an important role in their continued success."

Aviation experts predict that China will need to purchase more than 6,000 aircraft in the next two decades, spending about $950 billion to do so.

China's air travel market is set to add 758 million new passengers in the next two decades to bring the total number to 1.2 billion, according to November 2015 predictions from the International Air Transport Association (IATA). It will overtake the US as the world's largest passenger market by 2029, growing 5.2 percent a year.

Although growth in China has moderated due to a slowing economy, the market will still add another 230 million passenger journeys in the next four years, the IATA said.

"There will be ups and downs [in China's air travel industry], but it's very hard for people in the US to realize that Beijing has 80 million passengers. That's almost three times the size of the largest US airport. The sheer size of the tourists and future Chinese market is, to most people in the West, mind-boggling," Boyd said.

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