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China Is Buying 300 Boeing Jets As It Prepares To Become World's Largest Aviation Market

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Chinese companies have confirmed that they are indeed buying 300 jets from Boeing.

The purchase agreement, which is estimated to cost tens of billions of dollars in total, makes it the biggest order so far that the U.S. based firm had received from China.

The deal was finalized following President Xi Jinping's official state visit to the U.S.

Executives from companies such as China Development Bank Leasing, China Aviation Supplies Holding Company and ICBC Financial Leasing Co have all confirmed that they are buying new Boeing jets, with the latter specifically indicating the plan to buy 30 of Boeing's 737-800 jets that have list prices worth $2.88 billion.

China is so far Boeing's largest international market which accounts for around a quarter of its total deliveries for the year. In August, the company increased its aircraft demand forecast from the nation by as much as 5 percent and expressed that around 6,330 planes are needed to be built in the next 20 years.

Along with the purchase deal, Boeing also signed a cooperation document with Commercial Aircraft Corporation of China (Comac) which will allow the company to build a 737 aircraft assembly center in the nation.

If plans will push through, the assembly center will be Boeing's first center in China, allowing it to match the presence of its European rival Airbus.

China is poised to become the world's biggest aircraft and travel market in a span of two decades, eventually displacing the U.S. in the position. In April, the International Air Transport Association (IATA) predicted that by 2034, China will become the world's biggest air passenger market wherein one in every five passengers will travel to, from and within the country.

Currently, there are around 70,000 flights that operate to, from or within the Chinese Mainland each week. This huge activity is said to make up around 10 percent of the total activity happening around the globe, according to IATA.

"The emerging middle class in China is helping to boost demand," said analyst Mohshin Aziz of Kuala Lumpur-based Malayan Banking Bhd. "Most of the planes ordered will be for growth, and very few will be for replacement."

China's three largest state-owned airlines namely China Eastern Airlines Corp, China Southern Airlines Co and Air China Ltd are all expanding their fleets while some budget airlines are also preparing to compete with the national carriers.

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