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China's Aviation Boom Drives World Market

Guests try out the wireless connection to the Internet on their laptops onboard a US aerospace giant Boeing's latest aircraft 'Connexion', which allows passengers to connect on the Internet wireless while flying, at the Beijing Capital airport 21 September 2005. Boeing claimed that China will need more than 2,600 new planes worth 213 billion USD over the next 20 years, quadrupling its fleet to become the world's second largest aviation market. AFP photo.

Beijing (AFP) Sep 21, 2005
China's fast-growing aviation market is driving increased production of planes and engines and sustained demand in the world's second largest market will last years, industry leaders said Wednesday.

They were speaking on the first day of the Aviation Expo/China 2005 - the 11th air expo held in the Chinese capital which this year attracted 175 exhibitors from 21 countries and regions, including top global players.

"We all agree there's going to be higher than world average growth and there's going to be a significant demand for aircraft in China," said Airbus China's president Laurence Barron.

"When we have increased demand, we have increased production rate. We're looking at whether we should go beyond 30 (planes) a month."

The huge demand in China is one of the key catalysts for the European aerospace giant to increase production from 22 planes per month three years ago to 28 this year, Barron said. Next year monthly production is expected to reach 30 planes.

Budget carriers plus orders from India, Europe and the United States were also contributing to a significant increase in demand, especially for single-aisle planes, Barron said.

Airbus forecast China's air travel sector would grow by eight percent a year for the next two decades while Rolls-Royce, which supplies plane engines, estimated growth will be nine percent.

On Tuesday Boeing forecast a 7.3 percent annual growth rate.

While Boeing predicted China will need 2,600 new planes over the 20-year period, Rolls-Royce said Wednesday 2,300 new aircraft will be required. Airbus sees the market at about 1,800 new planes but it does not count regional aircraft.

The demand for air travel is driven by China's rapid economic growth, its people's increasing affluence, and a greater desire and ability to travel domestically and overseas.

"In the last five years, passenger traffic in China has witnessed an unprecedented rise of 95 percent and looks like it will continue to be the fastest growing market over the next 20 years," Steve Miller, Rolls-Royce's vice president of customer business for China, said in a statement.

The increased demand for new aircraft will drive an engine market worth 34 billion dollars over a 20-year period in China alone, which is almost 10 percent of the global market, Miller said.

To meet the demand, however, China will need more than planes and new airports which are also being built across the country, said Martin Craigs, president of Aerospace Forum Asia, a grouping of airplane manufacturers.

China is unable to train enough pilots to meet demand and has had to hire foreign pilots from countries such as Brazil, Craigs said.

One Chinese airline even asked Airbus to find another carrier to take a jet it ordered because it lacked enough pilots to fly the plane, Barron said.

"It's an example of the kind of thing we've been lobbying about over the last 20 years. We're saying China is such an important market, more effort should be made to develop 'software,' the people," Craigs said.

The aviation expo will last through Saturday and is expected to attract 20,000 visitors.

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