China to grow into 2nd largest aviation market
By Da Shan (China Daily)
Updated: 2004-10-22 08:43

China is expected to require up to 2,300 aircraft in the next 20 years, a senior Boeing official said yesterday.

These airplanes, worth about US$183 billion, will quadruple the country's current fleet to 2,801 by the end of 2023, said Randy Baseler, vice-president of Boeing Commercial Airplanes responsible for marketing.

But three months ago, Adam Brown, vice-president of Airbus responsible for customer affairs, said China will need to acquire a total of no less than 1,316 mainline passenger jets valued at US$140 billion until 2022 to accommodate growing travel demand and to renew their fleets.

Although the two made different predictions about China's aircraft demands, they agreed the country would become the second largest commercial aviation market outside the United States in the next two decades.

"Passengers are the foundation of air travel, and in a competitive market the airlines will continue meeting passenger demand for more nonstop service to destinations around the world with longer-range, efficient and comfortable airplanes," Baseler said.

China's air travel growth will outpace the increase in its gross domestic product until 2023, he said.

The country's overall air traffic market is expected to increase 7.3 per cent annually, led by the domestic market's forecast average annual growth of 8.1 per cent, he said.

Baseler's views were partly shared by Brown, who said China's airline traffic would achieve robust long-term growth following a strong rebound from various crises, such as terrorist attacks and the SARS outbreak.

"Passenger traffic carried by China's airlines would grow at an annual rate of more than 20 per cent in 2004 and 2005, but it would grow at a more normal secular rate of an average of 8.1 per cent per year by 2022," Brown said.

"Air travel will be driven by continuing robust growth in gross domestic product and personal income," Brown said.

It will also be driven by deregulation of ticket prices, privatization of airlines, less restrictive bilateral air services agreements with other countries such as that recently signed with the United States, and the increasing number of visas being issued to outbound tourists, he said.

Further stimulus to travel will be provided by the Beijing Olympic Games in 2008, the Shanghai Expo in 2010 and the Guangzhou Asian Games in 2010, Brown said.

An additional driver will be the planned free-trade zone between China and the Association of Southeast Asian Nations.

Between 1980 and 1998, demand for air travel on China's domestic air routes, fed by a sharp increase in disposable income, multiplied no less than 20 times, growing at an average of 18 per cent per year compared with average annual growth of 8.9 per cent for all modes of transport, Brown said.

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