Home' Asian Aviation : AAV June 2017 Contents 18 AsianAviation | June 2017
Tried and tested
While China and Russia work hard to enter the rather exclusive fraternity of trusted airliner
manufacturers, Airbus, Boeing, Bombardier and Embraer appear to be in little danger of losing
ground to the newcomers, as A AV editor Matt Driskill explains.
THIS YEAR HAS SEEN THE INITIAL FLIGHT OF CHINA’S C919, a
“domestically built” competitor to the A320 and the Boeing 737 that
is in reality composed mainly of Western components and engines,
and Russia also conducted the first flight of its MC21, which it too
hopes will be able to play a significant role by eating into sales
dominated by Airbus and Boeing.
Airbus and Boeing, and to a lesser extent, Embraer and Bombar-
dier, have little to fear though as the Chinese and Russian planes
will likely take years to enter full service and it is unclear how many
jurisdictions will actually certify them as safe to operate in places
like Europe and the US. Global airlines already have thousands of
planes on order from Airbus and Boeing and it can be safely as-
sumed they are unlikely to ditch tried and tested platforms for the
new kids in the skies, no matter what kind of deals the Russians and
Chinese might offer.
Having said that, China and Russia do have one thing going for
them — they can demand that national carriers in their respective
countries purchase the planes for use within each country. China
has already booked almost 100 firm orders from the likes of Air
China, China Eastern, China Southern and other domestic carriers
and scored a firm order for 10 C919s from lessor GE Capital. Russia,
likewise, has secured orders for the MC21 from Aeroflot and various
lessors as well as from outside allies like Egypt and Azerbaijan. With
the centre of the aviation world shifting to Asia, China’s ability to
mandate the planes that fly within its borders should probably not
Boeing estimates that China alone will need 6,810 planes worth
more than US$1 trillion by 2035 and China will overtake the US as
the world’s top aviation market in terms of passengers by 2034.
Boeing also estimates that single-aisle aircraft will generate about
US$535 billion, or 75 percent of the planes sold in China. The larger
perspective in Asia is that it will, over the next 20 years, need 15,130
airplanes, valued at US$2.35 trillion and the number of airplanes
in the fleet in Asia will nearly triple, from 6,350 airplanes in 2015 to
16,970 airplanes in 2035, according to Boeing.
Despite the positive long-term outlook for sales in all parts of Asia,
it is unlikely the industry will see anything like the golden years of
2012 and 2013 when Boeing and Airbus won 2,800 airplane orders.
Orders in 2016 were half that number and at this year ’s annual
conference of the International Society of Transport Aircraft Trading
(ISTAT) in San Diego, Airbus sales chief John Leahy said sales for
both Boeing and Airbus would be down another 30 percent to fewer
than 1,000 jets. Other analysts at the conference said they were con-
cerned that carriers in Southeast Asia like AirAsia have ordered too
many single-aisle planes and they may not want, or be able to, induct
all those planes into their fleets and may end up cancelling orders.
ISTAT participants warned that the good times of growing pas-
senger traffic, low fuel prices and cheap capital may not last much
longer and one said he was advising his clients to hold off on pur-
chases as prices are likely to fall in the near future.
In his keynote presentation at ISTAT, aviation economist Adam
Pilarski of the consulting firm Avitas said the aviation bubble could
burst because of unpredictable political situations in Europe and the
US and the prospect of rising interest rates and knock-on effects
on airplane capacity. Pilarski repeated those thoughts at the ISTAT
conference more recently in Hong Kong where he also forecast
short-term growth as likely to continue for the next 12-18 months
but a downturn was likely after that.
KEY INDICATORS 2015 TO 2035
DEMAND BY REGION 2016 TO 2035
GROWTH MEASURES (%)
World economy GDP
Number of passengers
Airline traffic RPK
Cargo traffic RTK
*$ values thoughout the CMO are catalog prices
Source: Boeing Long-Term Market Outlook
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