In a move that could impact Boeing (NYSE:BA) Co., China Eastern Airlines (OTC:CEAYY) Corp. has inked an agreement to acquire 100 domestically produced C919 aircraft, according to a statement released by the Shanghai-based airline on Thursday. The deal, valued at $9.9 billion at list prices, comes with a significant discount typical of such bulk orders. The company plans to take delivery of the C919s between 2024 and 2031, adding to the five previously ordered, two of which are already in operation.
The C919 aircraft, manufactured by Commercial Aircraft Corp of China Ltd., is a narrowbody jet seen as a potential competitor to best-selling aircraft from Airbus SE (OTC:EADSY) and Boeing. This announcement comes at a time when Boeing hasn't secured a large order from Chinese carriers for several years. Last year, China Eastern Airlines ordered 100 short-haul jets from Airbus.
Boeing recently released its Commercial Market Outlook (CMO) for 2023, indicating that China will require approximately 8,560 new commercial airplanes through 2042 due to its economic growth and increasing demand for domestic air travel. According to Boeing's long-term forecast, China's commercial airliner fleet will more than double over the next twenty years, reaching nearly 9,600 jets.
Boeing Vice-President of Commercial Marketing Darren Hulst stated that domestic air traffic in China has already surpassed pre-pandemic levels and international traffic is recovering steadily. "As China's economy and traffic continue to grow, Boeing's complete line-up of commercial jets will play a key role in helping meet that growth sustainably and economically," Hulst said.
From 2023 through 2042, China is expected to account for one-fifth of global deliveries of transport category aircraft. By the end of this forecast period, China's domestic aviation market will be the world's largest, driving demand for over 6,470 single-aisle jets like Boeing’s 737 MAX family. In addition to aircraft, China is projected to require 1,550 wide-body airplanes, 190 new freighter aircraft, 433,000 new aviation personnel, and $675 billion in aviation services by 2042.
This year marks the 50th anniversary of Boeing’s business relationship with China, which began in 1972 when China ordered ten 707 jets to modernize its fleet of commercial aircraft. Today, Boeing aircraft are a mainstay of China’s air travel and cargo systems.
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