SHANGHAI: Chinese airlines are likely to buy more than 7,000 planes worth $1.1 trillion over the next 20 years, as they grow their fleets to meet robust demand for domestic and international travel, Boeing Co. said in a bullish forecast on Wednesday.
Its latest estimate of 7,240 aircraft purchases for the period to 2036 is 6.3 percent higher than the US plane maker’s previous prediction of 6,810 planes last year.
“China’s continuous economic growth, significant investment in infrastructure, growing middle-class and evolving airline business models support this long-term outlook,” Randy Tinseth, Boeing Commercial Airplanes vice president of marketing, said.
“China’s fleet size is expected to grow at a pace well above the world average, and almost 20 percent of global new airplane demand will be from airlines based in China,” Tinseth said in a statement.
Boeing and European rival Airbus have been jostling for market share in China, the world’s fastest growing aviation market, with both opening assembly plants in the country.
Both firms have profited heavily from the aggressive fleet expansion plans of Chinese airlines, which are now experiencing falling passenger returns on routes, thanks to stiffer competition and capacity increases.
The US firm said it expects three-quarters of the 7,240 plane orders to be for single-aisle aircraft, thanks to strong demand for travel within China and throughout Asia. The widebody fleet would require 1,670 new planes, it added.
Tinseth said he expected more demand for widebody aircraft, adding that the falling returns now being experienced by airlines was temporary. “They are big investments, it takes time, and they will get there,” he said.
He added that there was more optimism on the long-term economic outlook, given better-than-expected economic growth in China this year, while the cargo market was also seeing a resurgence.
— Reuters
Boeing expects China to spend $1 trillion on planes over next 20 years
Boeing expects China to spend $1 trillion on planes over next 20 years
Gold rises on Iran war safe-haven bid; firm dollar limits upside
BENGALURU: Gold prices rose on March 5, lifted by safe-haven demand amid an escalating war in the Middle East, while a stronger dollar and concerns around the US Federal Reserve’s monetary policy capped gains.
Spot gold was up 0.6 percent at $5,168.43 per ounce, as of 11:55 am Saudi time. US gold futures for April delivery were up 0.9 percent at $5,179.20.
Israel launched a large wave of strikes on Tehran on March 5, targeting what it said was infrastructure belonging to the Iranian authorities, after Iranian missiles sent millions of Israelis rushing into bomb shelters.
“On the one hand, there may be greater safe-haven demand for gold given the ongoing conflict in the Middle East. On the other hand, the risk of a prolonged period of higher energy prices that takes rate cuts off the table, and adds to the chance of rate hikes, could be capping further gains,” said Hamad Hussain, a climate and commodities economist at Capital Economics.
The US dollar rose about 0.3 percent after briefly retreating from three-month highs, as the fallout from the war roiled global markets and kept sentiment fragile.
Concerns about energy supply continued to drive up oil prices and stoke inflation fears.
Gold is considered a hedge against inflation in the long run, but also tends to thrive when interest rates are lower, as it is a non-yielding asset.
President Donald Trump, on March 4, officially nominated former Federal Reserve Governor Kevin Warsh to be the US central bank’s next chair.
US economic activity grew slightly, prices continued to increase and employment levels were stable in recent weeks, the Federal Reserve said on Wednesday in its latest “Beige Book” report.
Markets expect the Fed to keep rates steady at its next policy meeting on March 18, according to CME Group’s FedWatch tool.
Investors are looking out for the weekly US jobless claims data, due later today, and the US employment report for February on March 6 for further clues on monetary policy this year.
Spot silver rose 0.5 percent to $83.80 per ounce. Platinum gained 1.1 percent to $2,172.20, while palladium lost 0.7 percent to $1,662.07.
