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China may lead global aviation recovery
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China is expected to lead the global aviation recovery thanks to its dynamic domestic air travel, senior executives from Boeing said yesterday.

The country will require 3,770 new airplanes valued at $400 billion over the next 20 years and will remain the world's largest commercial airplane market outside the United States, said Randy Tinseth, Boeing Commercial Airplanes' vice-president for marketing.

"China is the world's most dynamic market for commercial airplanes. The strong domestic air travel growth in the country during the first half of this year gives us confidence that the world aviation industry is beginning to recover," said Tinseth, after issuing the annual long-term China market outlook in Beijing.

China's domestic passenger air traffic grew by 20 percent year-on-year in the first half of this year despite a worldwide slump thanks to the government's economic stimulus packages, according to figures from the Civil Aviation Administration of China (CAAC), the industry watchdog.

The CAAC said the country's domestic passenger traffic is expected to witness a full-year growth of over 20 percent this year further driven by a traditional peak travel season in the third quarter.

Latest figures showed that China's three largest airline groups all experienced significant year-on-year growth in passenger traffic in August. Air China yesterday said its domestic passenger traffic soared 42 percent in August, while international passenger traffic achieved a double-digit growth for the first time this year. China Eastern Airlines' domestic passenger traffic skyrocketed 52 percent in August with China Southern Airlines' rising 34 percent. The two airlines also saw positive growth in international traffic in August for the first time this year.

Driven by its fast-growing domestic market, 70 percent of the new airplanes purchased by China in the next two decades will be single-aisle aircraft, such as the Boeing 737 and Airbus A320, Tinseth said.

Currently, 796 Boeing airplanes are in service in China and there are 317 jets on order, which includes 50 orders for Boeing's latest long-haul B787 Dreamliner jets.

The Chicago-headquartered company expects to have over 100 aircraft delivery deferrals this year. But it declined to tell how many would be from Chinese airlines.

"There are just some minor adjustments. Most of the airplanes we are delivering to China are the B737. The domestic air travel market has sustained quite well throughout the downturn. The carriers need those airplanes," said John Bruns, Boeing Commercial Airplanes' vice-president for China operations.

Shanghai-based China Eastern said earlier that it would cut the number of plane deliveries this year by nearly half to 13 from 29.

The International Air Transport Association (IATA) said yesterday that worldwide passenger traffic is expected to decline 4 percent and cargo by 14 percent this year. IATA said the global airline industry is expected to lose $11 billion this year and the losses will continue into 2010 with the industry expected to report a $3.8 billion net loss.

"Revenues are not likely to return to 2008 levels until 2012 at the earliest," said Giovanni Bisignani, IATA's director-general and CEO.

(China Daily September 17, 2009)

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