Shares of Boeing Co. got a lift Wednesday, after the aerospace giant raised its outlook for how many new commercial planes China will need over the next two decades, citing increasing demand for domestic travel and economic growth that is expected to be well above the global average.
According to Boeing’s Commercial Market Outlook, China’s commercial airliner fleet is expected to more than double over the next 20 years to nearly 9,600 jets.
With that growth, the CMO now estimates China will need 8,560 new commercial airplanes through 2042, which is up from the CMO’s estimate a year ago of 8,485 new airplanes.
rose 0.8% in premarket trading to bounce off Tuesday’s four-month closing low, putting it on track for just the second gain in September.
Through Tuesday, the stock has suffered through a rough 13-session stretch starting Aug. 30, in which it has fallen 12 times. It tumbled 10.6% during that stretch.
“Domestic air traffic in China has already surpassed pre-pandemic levels and international traffic is recovering steadily,” said Darren Hulst, vice president of commercial marketing at Boeing. “As China’s economy and traffic continue to grow, Boeing’s complete lineup of commercial jets will play a key role in helping meet that growth sustainably and economically.”
The new plane-demand estimate of 8,560 includes 6,470 single-aisle jets, 1,550 widebody jets, 350 regional jets and 190 freighters.
With the new outlook, China is expected to account for about 20% of the world’s airplane deliveries over the next 20 years, as China is projected to have the largest domestic aviation market in 2042.
So besides just new planes, the CMO estimates that China will need 433,000 new aviation employees, including 134,000 pilots, 161,000 cabin crew members and 138,000 technicians.
Boeing’s stock has lost 3.7% over the past three months through Tuesday but has gained 7.3% year to date. In comparison, the iShares MSCI China ETF
has shed 7.7% this year while the S&P 500 index
has advanced 15.7%.