Boeing lifts 20-year China jet sales forecast

[November 02, 2010]  BEIJING (AP) -- Boeing Co. raised its 20-year forecast of the airline manufacturing industry's jet sales to China due to strong economic growth and more competitive Chinese carriers.

Chinese airlines are expected to add 4,330 aircraft worth $480 billion by 2029, up from a forecast last year of 3,770 planes worth $400 billion, Chicago-based Boeing said Tuesday.

Boeing, Europe's Airbus Industrie and rivals from Russia, Brazil, Japan and Canada are looking to China to drive sales as U.S. and European growth slows. Beijing also is trying to create its own civilian jetliner industry.

Boeing raised its outlook due to China's strong growth, demand for midsize aircraft and the competitiveness of its airlines, said Randy Tinseth, vice president for marketing of Boeing's Commercial Airlines unit.

"We have seen a much stronger market than we anticipated for single-aisle airplanes," Tinseth told reporters. "When we look at international traffic, we think that the Chinese airlines will grab a larger market share of that traffic" than last year.

Global airlines have rebounded quickly from the economic crisis. The International Air Transport Association, an industry group, said in September airline profits this year should be $8.9 billion after total losses of nearly $26 billion over 2008 and 2009.

In China, Boeing said passenger numbers should more than triple and airline fleets will double in size by 2020.

China's communist government has its own aerospace ambitions and is developing the the C919, a homegrown narrow-body, single-aisle jet. State-owned Commercial Aircraft Corp. of China, known as Comac, plans to deliver its first C919 in 2016.

"I don't think there is any question that Comac will develop a successful aircraft," Tinseth said. "How successful remains to be seen."

Despite rising competition, Tinseth said Boeing hopes to hold onto its 52 percent market share in China. He said Boeing has looked at what market share the C919 might capture but declined to say what it was.

The rise in China of Western-style budget carriers could boost passenger numbers and aircraft demand but Boeing expects only "modest deregulation" that would allow low-cost airlines to flourish, Tinseth said.

"We don't have the same type of open, deregulated market that you have in the United States or Europe here," he said. "The opportunity for a true low-cost airline would be later rather than sooner."

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[Associated Press; By JOE McDONALD]

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