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China to soon become the second largest airline industry
The Paris Air Show clearly showed that the Asian countries like India and China are where the future growth of the Airline Industry lies and most of the orders coming from this region. And the statistics are now reflecting the same. Latest reports say that the China has the capabilities of becoming the world’s second largest aviation market in 20 years.
They would be next only to the United States if the current growth in the Chinese market continues. This has been predicted by the officials of the European Airline Giant Airbus Corporation. And the report was released by the Saturday’s issue of Economic Information Daily.
Laurence Barron, chief executive of the Airbus China Corporation said that Airbus might deliver nearly 1,800 airplanes to China in the next 20 years, which comes to around 90 planes per year. This should form around 11% of all the planes delivered by the company to their clients. Most of these planes are expected to be long-haul super jumbo Airbus A380, whose catalog price for each is 275 million US dollars.
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It is very much true that Chinese and Indian markets will see the largest potential for growth in air traffic (passenger miles delivered). However, whether this will translate into actual demand for aircraft and growth in the airline industry remains to be seen. Both countries face serious bottlenecks. In particular, the Indian airport infrastructure is woefully inadequate for supporting this expected growth in air traffic. And even worse, as you may have noticed, at the Paris Air Show, not a single Chinese Airline bought an aircraft from Boeing or Airbus because none received permission from the Chinese government.
This reflects the fact that the Chinese government is still keeping airline industries under substantial regulatory burdens that might prevent them from growing as quickly as necessary to meet the growth in air traffic demand.
Thus, although we know the Chinese and Indian airline industries and markets for aircraft will grow, there are a lot of factors that may prevent that growth from reaching the levels predicted in your optimistic forcasts.