Boeing Says China Will Need to Spend $2.9 Trillion on New Aircraft and Services

Boeing may be the biggest aircraft maker in the world, but in addition to that, the company remains one of the biggest authorities on the aviation sector as a whole. Hence, when the company releases its annual report regarding its outlook on the commercial aviation sector in China, it is supposed to be taken with utmost seriousness. On Tuesday, September 17, the company released its outlook with regards to China, and the report is quite bullish. China is already the second biggest market when it comes to commercial aviation, and naturally, Boeing also has high hopes regarding its business in the world’s second-largest economy. According to the report, Boeing has estimated that over the next 20 years, China will have to spend an astonishing $2.9 trillion on aircraft and services.

It is a highly bullish call, and, in fact, the figure is 7% higher than the estimates of 2018. The reasoning behind such a bullish outlook is quite sound. Boeing estimates that the further rise of the middle class in China will result in a steady rise in the number of flyers in the next 20 years. In addition to that, the fast development of infrastructure will help in broadening the scope of the commercial aviation sector significantly. Due to such developments, Boeing estimates that China is going to have to purchase as many as 8090 aircraft over the next two decades. The total estimated costs of those planes will come in at a staggering $1.3 trillion.

However, that is not all. In order to run such an operation, a country also needs to spend considerably on maintenance as well as on cargo operations. Those costs have been estimated to be around $1.6 trillion. The figures may seem mind-boggling, but when spread over a period of two decades; it is not particularly huge for a country like China. That being said, the projections made by Boeing also show the level of analysis it has done on the market over the past few years. Considering the fact that it is now facing tough challenges from a range of countries due to the issues with one of its most important aircraft, it is only natural that Boeing has decided to focus more on China. It goes without saying that China is a big prize, but it remains to be seen how much of that budget is snared by Boeing.

Jodie Miller

Jodie Miller is experienced journalist. She holds double degree in journalism and communication. She joined our team as a content curator. She enjoys writing and curating contents related to finance and forex world.

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