Boeing (NYSE:BA), the American aerospace manufacturer, has recently updated its long-term demand projection for China, anticipating a substantial expansion in the country's commercial aircraft fleet over the next two decades. This forecast comes amid a rapidly growing domestic travel industry in China.
In its latest Commercial Market Outlook, Boeing estimates that China will require 8,560 new commercial airplanes by 2042, a slight increase from last year's 20-year demand outlook of 8,485 planes. By 2042, the company expects China's commercial fleet to expand to nearly 9,600 jets.
This expansion will not only drive demand for new aircraft but also stimulate a $675 billion market for aviation services such as maintenance and training. Additionally, this growth will necessitate the recruitment of around 433,000 new personnel, including 134,000 pilots.
Despite recent signs of an economic slowdown that have rattled global investors and impacted the S&P 500, Boeing maintains an optimistic stance on China's growth trajectory. The company believes that China's expanding economy will boost domestic air travel and freight services. The latter is expected to be bolstered by the continued strength of China's e-commerce sector.
The updated forecast implicitly supports Chinese tech giants like Alibaba (NYSE:BABA) and JD (NASDAQ:JD).com that primarily operate in online retail — a sector that has faced turbulence amid China's economic challenges.
According to Boeing, domestic air traffic in China has already surpassed pre-pandemic levels, with international traffic steadily recovering. As the Chinese economy continues its growth trajectory, Boeing asserts that its broad range of commercial jets will play a crucial role in meeting this growth sustainably and economically.
Following this announcement on Wednesday, Boeing shares showed relative stability in the U.S. premarket.
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