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China's commercial aviation market expected to overtake US in 20 years

MAJOR US aircraft manufacturer Boeing has said in its latest outlook for the Chinese commercial aviation market that in 20 years China will leapfrog the US to become the first country with commercial aircraft worth over US$1 trillion.

In addition to growing tourism demand for air travel, air cargo is also a key driver of that growth, according to a CCTV report.

Boeing predicts China will need to buy some 6,810 planes from Boeing, Airbus and other suppliers in the next two decades, 7.6 per cent up from the company's estimate last year. That confidence in the market comes from China's increasing demand for both domestic and international travel.

In the second quarter this year alone, China's Civil Aviation Administration approved 65 new flight routes for the country's airlines.

"This kind of growth is not coming from out of blue. It's incremental growth and incremental projection on the strength of the Chinese tourism demand as well as outbound traffic," said David Yu, chief investment officer of Inception Aviation Holdings.

At the same time, air cargo is also expected to become a key driver for the growth of commercial aviation in China. YTO Airlines, one of the largest all cargo airlines in China, confirms the company has ordered 10 cargo versions of the Boeing's 737, a call on another possible 10. China Postal Airlines also has 10 freighters on order.

"Freighters are also included in the projection if you look deeper down they've always been a large segment of the business line for Boeing and Airbus," Mr Yu said.

Airbus has set up a local completion centre Tianjin to aid the company's integration with the China market. The first Airbus A330 rolled out of the facility in March. Boeing has been manufacturing aircraft components in China for some time, and there is speculation that it too may soon set up a completion facility here.