Aviation giants look to China amid global turbulence

Tag : Aviation

ZHUHAI, China: The giants of the aerospace industry will jet in toChina's only international airshow starting Tuesday hoping thecountry's aviation sector can provide shelter from the globalfinancial crisis.

US manufacturer Boeing and Europe's Airbus will head the line-up of600 civil and military manufacturers and parts suppliers from 35countries at the 2008 China Airshow, an annual event in thesouthern city of Zhuhai.

And as airlines across the world report a drop-off in first andbusiness class travel due to the economic turbulence, the firmswill be looking to China to provide crucial growth in the next fewyears.

"China is going to be the fastest-growing market in the world,"Wang Yukui, the spokesman for Boeing in China, told AFP.

Research released last week by the US giant found China will need3,710 new commercial planes worth 390 billion dollars over the next20 years.

The demand will represent 41 percent of the entire Asia-Pacificmarket, and only the United States will be a bigger buyer, Boeingsaid.

In addition, Chinese carriers will add about 370 freight-carryingplanes by 2027, quadrupling their total freighter fleet, the Boeingresearch found.

Airbus chief executive officer Tom Enders also said recently it wasexpecting a "large order" from Chinese airlines by early 2009, ontop of existing memorandums of understanding with Chinese carriersfor 280 aircraft.

The company's giant superjumbo, the A380, will be on display at theChina Airshow, as the company tries to take a bigger slice of thethriving market.

In 2007, China's air traffic soared 16.8 percent to 387.6 millionpassenger trips, on the back of 16.7 percent growth in 2006, statemedia reported.

The demand has sparked a similar boom in airport construction, witharound 100 new airports planned by 2020, previous reports said.

Nevertheless, China's aviation sector is starting to feel theimpact of the global economic turmoil, according to Tom Ballantyne,chief correspondent of industry magazine Orient Aviation.

"Although we are not talking about a cessation of growth, we aretalking about a slowdown in growth," he told AFP.

"The industry in China has been growing at 10-15 percent (peryear). It is likely to be more like 5-6 percent growth goingforward."

Early signs that demand was beginning to slow in China came lastweek when two of the country's biggest airlines, Air China andChina Eastern, reported heavy losses in the third quarter, normallypeak season for air travel.

Air China said the losses were due to both the fluctuating oilprice and a decrease in demand. China Eastern said the poor showingmeant it expected to make a loss in 2008.

While international manufacturers are hoping they can continue tofill up their order books, China's nascent manufacturing industrymay use the 2008 airshow to announce a major step forward.

The Commercial Aircraft Corporation of China (CACC) is expected toannounce Tuesday that it has sold 25 jets to a US company,state-press reports said last week without naming the buyer. Ifconfirmed, it would be a landmark deal.

The Guangzhou Daily said the company that has designed China'sfirst homemade jet, the ARJ21  Advanced Regional Jet for the 21stCentury  would announce a 735-million-dollar contract when theshow opens on Tuesday.

The potential contract for the ARJ21, which carries between 70 and110 passengers, would come despite the fact the plane has yet tomake its maiden voyage.

The CACC, which was only launched in May, has said it is aiming toeventually take on Airbus and Boeing, although the firm's presidentsaid that would take at least 20 years.


- AFP/so