Boeing's $37bn China deal for 300 planes takes off


China is expected to overtake the US as the largest air travel market

Boeing has secured a $37bn (£28bn) deal for China to buy 300 of its aircraft as the country looks to cater for rising demand by picking up new planes.

The announcement of the purchase, which includes 260 narrowbody planes and 40 widebody aircraft, came after US President Donald Trump met Chinese President Xi Jinping in Beijing. 

China Aviation Supplies Holiday Company, the state-owned firm which does big orders for local airlines, signed the deal during a ceremony today, as part of the US trade mission to China, and was signed by Kevin McAllister, Boeing commercial airplanes president and chief executive.

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"China is a valued customer and key partner, and we're proud that Boeing airplanes will be a part of its fleet growth for years to come," said McAllister. "Boeing and China have a strong history of working together based on great mutual respect, and these orders build on that foundation."

Chinese airlines are looking to increase capacity after projections have the country to soon overtake the US as the world's largest aviation market by passenger numbers.

The International Air Transport Association (IATA) recently revised its 20-year air passenger forecast upward, while indicating that China will overtake the US around 2022, several years faster than had been previously predicted.

That is due to both "slightly faster Chinese growth", and slightly reduced growth in the US. 

In its forecast looking at traffic to, from, and within, a country, IATA also predicts the UK will drop from the third biggest air travel market to fifth by 2036, overtaken by India and then Indonesia. 

The biggest driver of demand for air travel will be the Asia-Pacific region, and will account for more than half the new passengers over the next two decades, IATA forecasts. 

IATA director general Alexandre de Juniac said it will be a "huge challenge" for governments and industry to ensure the rising demand can be met.

Five fastest-growing markets in 2036
1. China (with 921m new passengers for a total of 1.5bn)
2. US (with 401m new passengers for a total of 1.1bn)
3. India (with 337m new passengers for a total of 478m)
4. Indonesia (with 235m new passengers for a total of 355m)
5. Turkey (with 119m new passengers for a total of 196m)

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