Boeing Expects to Deliver 140 Planes to China in 2014

Boeing Co. (BA) said it delivered a record number of jets to China last year and expects to hand over a similar number of aircraft this year as growth in the world’s second-biggest economy spurs demand for air travel.

Deliveries this year to China will be in the range of 140 aircraft after handing over a record 143 planes last year, Marc Allen, president of Boeing China, said in Beijing today. Chicago-based Boeing, which delivered a record 648 jets worldwide, also secured orders for more than 230 new aircraft from the country last year, he said.

Asian growth is lifting orders for Boeing and Airbus Group (AIR) with China forecast to supplant the U.S. as the world’s largest market by 2032, the European planemaker forecast in September. China’s economic expansion is helping air travel affordable to more people, increasing demand for planes from carriers such as Air China Ltd. (1055) and China Southern Airlines Co.

“Wow, a really fantastic year,” Allen said. “What I am even more excited about is that we see a trajectory. I can announce today that we expect to maintain that rate in 2014 and into the foreseeable future.”

Aircraft sales and output are surging as carriers globally take advantage of low-cost financing to replace older models with newer, fuel-sipping jets. Boeing’s 1,355 net orders for 2013 was the second-highest annual sales tally, and an increase from the 1,338 a year earlier.

Asia’s Biggest

China Southern, the Guangzhou-based company that’s Asia’s biggest airline by passenger numbers, took deliveries of 37 aircraft last year, according to Boeing’s website. That was the second-most among carriers worldwide, lagging behind only American Airlines’s 39, according to the website.

Of the 230 orders Boeing won in China last year, 130 were from leasing firms and the remainder from airlines, Allen said. A third of those ordered by airlines have already gone through the government approval process, he said.

“The low-cost carriers in China is a big emerging story in 2013,” Allen said. “We are going to bring additional personnel to China, subject matter experts, to work with the low-cost carriers that are starting up.”

China Travel

Qingdao Airlines, a newly established private carrier in China, last year agreed to buy 23 planes from Airbus in a deal valued at $2.3 billion, based on list prices. Zhejiang Loong Airlines, recently approved by the regulator, also agreed with the European planemaker to buy new aircraft. Airbus assembles single-aisle planes at a factory in Tianjin, near Beijing.

China is easing aviation regulations and boosting infrastructure spending as carriers are forecast to require more than 5,000 planes in the next 20 years. International travel from China will grow at an annual rate of 7.2 percent in the next 20 years, faster than the 6.8 percent expansion for domestic travel, according to Boeing.

Boeing has already delivered eight Dreamliners to China Southern while Hainan Air has six, Allen said. Xiamen Air will take delivery of its first 787 this year and Air China will get its first 787-9 in 2015, he said.

Source: Bloomberg News