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China, India increase demand for aircraft

Boeing Co, surpassed in the last two years by Airbus SAS in the delivery of commercial aircraft, said it may raise its forecast for deliveries next year because of higher-than-expected demand from Chinese and Indian airlines.

China Southern Airlines Co, Air India Ltd and carriers from the two nations may order more planes next year, especially for smaller aircraft with single aisles, enabling Chicago-based Boeing to deliver "a little" more than an earlier target of between 375 and 385 planes, said Lee Monson, Boeing's Senior Vice President for sales in the Middle East and Africa.

"Demand is starting to increase rapidly," Monson, 51, said in an interview yesterday in Dubai in the United Arab Emirates.

"There is more demand than supply," he said, declining to be more specific about next year's target.

Growth among the airlines of Asia, where 10 low-fare carriers began flying last year, is leading global demand for new planes. Chinese airlines may need 1,790 new planes worth US$230 billion until 2023, while Indian carriers may need 570 new aircraft, Airbus said on March 8.

Boeing put the forecast at 2,300 planes valued at US$180 billion for China while India's airlines may spend US$35 billion on all new orders.

Airbus delivered more planes than Boeing last year for the second year, becoming the biggest manufacturer in the global market for new planes, valued at US$64 billion. Boeing is competing with Airbus which last week won a contract from AirAsia Bhd, Southeast Asia's biggest discount airline, for 60 planes worth US$3.8 billion in list price.

China, with its population of 1.3 billion people, is easing travel restrictions to let more people fly abroad for business and leisure, boosting air travel by 8.2 percent every year until 2023, compared with a global average of 5.3 percent, Airbus said, without giving its 2006 deliveries forecast.

"There are regions in China where the economy is growing 18 percent to 20 percent a year," spurring demand for airline travel, Boeing's Monson said.

Shanghai Airlines Co and China Southern have said they are adding more aircraft to their fleets, using newer and more fuel efficient planes to meet the country's demand for air travel and compete with foreign carriers.

Shanghai Airlines, based in China's biggest commercial city, said it plans to buy nine of Boeing's planned 787 planes for US$1.1 billion, based on catalogue prices.

China Southern, the country's largest carrier by fleet, said it will lease 25 aircraft made by Boeing and Airbus for delivery starting next year.

Air China, the country's largest international airline, is seeking government permission to sell bonds to raise up to 3 billion yuan (US$362 million) to buy new aircraft.

India's government plans to spend US$20 billion over the next five years expanding its two state-owned airlines and upgrading its airports to win passengers from regional hubs, including Singapore and Dubai.

Air India is planning to buy 68 planes from Boeing and Airbus to increase flights to the US, Europe and Asian countries. It will also expand its network to Australia and Canada.

Indian Airlines Ltd, which flies mostly domestic routes, is buying 43 planes and aims to offer more flights to Europe.

Other Indian carriers such as Jet Airways and Sahara Airlines Ltd last year won the Indian government's permission to fly overseas, including to the UK, US and Southeast Asia.
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