Going with Boeing: Will the aviation giant ever ask China to move in?

So for this edition of the Content We Love blog we need to fly back through the PR Newswire clouds a little bit to a release we received from Boeing back on July 11; “Boeing Forecasts Demand for 39,620 New Airplanes Valued at $5.9 Trillion”.

Just by the by, this headline is a good example of why using figures in headlines can be so effective. The numbers being talked about here are remarkable, and definitely worth a closer look.

To put them into perspective, $5.9 trillion is roughly ten times the annual GDP of Argentina. Remember this is a company, not a country. And, going by Boeing’s official figures, 39,620 planes will take them just over 54 years to manufacture.

According to this news release however, they plan to deliver in just 20.

So how are they going to do it?

Of those near 40,000 aircraft some 15,130 – or nearly 40% – are earmarked for delivery in Asia, which in itself probably isn’t all that surprising considering “Asia” accounts for 60% of the world’s population.

How Boeing is going to reach this target however remains to be seen, as the company has so far resisted – or at least gone quiet about – moving any of its manufacturing or assembly outside of the United States. Boeing delivers some 750 aircraft each year (such a shame it’s not 747) but either way, 750 x 20 does not equal 39,260.

We only need to look at the Boeing media room on prnewswire.com for one possible solution, at headlines like:

– Boeing, China Southern Airlines Finalize Order for 12 787-9 Dreamliners
– Boeing Announces Commitment for 30 737 Airplanes from Unidentified Chinese Customer
– Boeing, Kunming Airlines Announce Memorandum of Understanding for 10 737 MAX 7 Airplanes
– Boeing, Donghai Airlines Announce Airline’s Intent to Purchase 25 737 MAX 8s, Five 787-9s

and especially:

– Boeing Forecasts Demand in China for 6,810 Airplanes, Valued at $1 Trillion

This is over the course of just three months. The second and third ones came in on the same day.

It stands to reason that if one market is going to order nearly 7,000 planes at a value of US$1 trillion, Boeing is going to have to do something. Probably something it hasn’t done before.

The company’s biggest rival Airbus has had a manufacturing facility in Tianjin since 2009 and, at the time of writing, is busy working on a second location not far from the first. This willingness to back the Chinese aviation market over the past seven years has seen Airbus snap up a near 50% market share in China.

Beijing and the Seven Runways

Indeed the passenger aviation sector in the world’s most populous nation is absolutely booming. Relative newcomers to the sector, like Xiamen Airlines and Hainan Airlines, now offer direct flights from second and even third tier Mainland Chinese cities to a number of top global destinations. Who’d have thought even just a few years ago that in 2016 you’d be able to fly direct from Changsha to Melbourne or Amsterdam to Xiamen?

China’s thirst for travel comes with inevitable downsides though; Chinese airports and airlines are regularly ranked among the worst performers in the industry. But one thing the modern China is certainly never short of is ambitious solutions, such as the plan to build the newest, biggest, bestest, most expensivest airport ever, in Beijing.

Due to open in 2019, it will apparently have the capacity for 72 million passengers annually – making it potentially the biggest and busiest in the world – in addition to a high speed train station and an extremely ambitious sounding seven runways.

These kinds of developments are enough to make any company sit up and pay attention, even one as steeped in tradition as Boeing. The company’s will-they-won’t-they courtship with China seems to have been rumbling on for years, but the numbers suggest something’s gotta give.

There’s no question the label carries a lot less of the stigma that it used to. Nevertheless the awkward question still remains; is the world ready for planes ‘Made in China’?