Boeing Co. shares took off on Wednesday, following the aerospace titan’s announcement of an upward revision to its 20-year outlook for new commercial planes in China. This bullish forecast is based on a surge in domestic travel demand and anticipated economic growth in China that is projected to significantly outpace the global average. As per Boeing’s Commercial Market Outlook (CMO), China’s commercial airliner fleet is set to more than double over the next two decades, reaching around 9,600 jets.

The revised CMO now predicts that China will require a massive 8,560 new commercial airplanes by 2042, an increase from last year’s estimate of 8,485. This uptick in the forecast gave a much-needed boost to Boeing’s stock, which rose 0.8% in premarket trading, rebounding from Tuesday’s four-month closing low. This comes as a welcome change for the company, whose stock has endured a challenging period, falling 12 times in a 13-session stretch since August 30th. The new plane-demand estimate of 8,560 includes 6,470 single-aisle jets, 1,550 widebody jets, 350 regional jets, and 190 freighters.

Boeing Raises 20-Year Forecast for China’s Demand for New Planes

Boeing Co. stock received a boost on Wednesday following the company’s revised outlook for China’s needs for new commercial aircraft over the next two decades. The aerospace giant cited increasing domestic travel demand and an economic growth rate expected to surpass the global average as the driving forces behind China’s projected demand.

Skyrocketing Demand for New Aircrafts

Boeing’s Commercial Market Outlook (CMO) report predicts that China’s commercial airliner fleet will more than double in the next 20 years, reaching nearly 9,600 jets. The CMO estimates that China will require 8,560 new commercial airplanes through 2042, an increase from last year’s estimate of 8,485 new airplanes. This increase attributed to a rebound in Boeing’s stock, which rose 0.8% in premarket trading, bouncing back from Tuesday’s four-month closing low. This increase marks only the second gain for the company in September.

China’s Aviation Growth: A Boon for Boeing

"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. He further added, "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 revised demand estimate of 8,560 new planes includes 6,470 single-aisle jets, 1,550 widebody jets, 350 regional jets, and 190 freighters. With this new prediction, China is expected to account for approximately 20% of all global airplane deliveries over the next two decades. By 2042, China is projected to have the largest domestic aviation market globally.

Beyond Planes: China’s Need for Aviation Personnel

In addition to new planes, the CMO report also estimates that China will require 433,000 new aviation employees. This includes 134,000 pilots, 161,000 cabin crew members, and 138,000 technicians.

Despite a challenging period in which Boeing’s stock fell 12 times in a 13-session stretch starting Aug. 30, the stock has gained 7.3% year to date. This stands in contrast to the iShares MSCI China ETF, which has shed 7.7% this year, while the S&P 500 index has advanced 15.7%.

Takeaways

Boeing’s revised forecast highlights China’s growing prominence in the global aviation market. The increased demand for aircraft and aviation personnel will significantly contribute to the economic growth of both China and Boeing. However, it also underscores the need for sustainable and economical solutions to meet this demand. This growth projection shows a promising future for the aviation industry, with Boeing playing a significant role in shaping that future.