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IBA says Boeing’s China forecast too “conservative”

Sept. 9, 2014, Beijing, China - In light of Boeing’s recent announcement, which sees them increase their prediction for new aircraft deliveries to China over the next 20 years, the International Bureau of Aviation’s Beijing office believes this figure to be too conservative and expects it to be significantly above the 6,000 new aircraft forecast.


September 9, 2014
By Carey Fredericks

Whilst there is no doubt that China must meet dramatically increased flight demands, the prediction must not only consider the diversifying economy, but also the refined Government policies targeted at promoting airline traffic, particularly that of the low-cost airlines, and ill-served Western regions of China.
 
David Yu, IBA’s Regional Director – China, comments: “Whilst the new policies will stimulate growth throughout the region, it is also important to consider that over 900 aircraft are expected to be retired over this period. According to JetData, IBA’s commercial aircraft database, the current Chinese fleet is composed of over 2,400 aircraft, with an average age of 7.8 years. With a current outstanding backlog comprising 42 A320 family aircraft, 35 A330 aircraft, 24 A350 aircraft, 87 737 family aircraft, six 747 aircraft, 50 777 aircraft and 22 787 family aircraft, coupled with the predicted aviation industry growth over the next 20 years, there will be an abundance of opportunities created for the supply chain, and especially for local aircraft leasing companies who have steadily grown over the last five years. At present, 34% of the current fleet is on lease.”
 
IBA sees significant opportunities for experienced support from global aviation consultancy companies to provide a range of services to the Chinese airlines, as well as lessors, investors and lenders who will finance the deliveries. Owen Geach, IBA’s Commercial Director explains: “The Chinese Government and many leading operators are engaging with expert advisors who have experienced the complex organizational and financial structures that such fast growth demands. As an independent adviser in the financial sector, IBA is aiding the management of new order delivery processes and works with stakeholders to create sustainable growth as the market expands both in terms of regional rates and in the number of aircraft. The Chinese aviation sector will need financing, so lenders, lessors and export credit agencies will seek asset management and advisory services to protect their exposure.”