Chinese airlines will need an additional 3,200 aircraft over the next 10 years as Chinese citizens travel more, according to Avolon, the international aircraft leasing company controlled by China’s conglomerate HNA Group.

 

According to a research paper issued on Thursday, more than 50 per cent of the aircraft still need to be ordered, including 1,150 narrow-body aircraft, 400 wide-body aircraft and 150 regional jets.

 

China currently had 2,800 aircraft in its passenger service fleet, which accounted for 13 per cent of the world’s total and represented 11 per cent annual growth since 2010, the paper said.

 

The fleet mix had a high narrow-body content, compared with the average for the rest of the world, and Chinese airlines were correspondingly underresourced in wide-body aircraft, it added.

 

“China offers an attractive long-term growth opportunity for domestic and international airlines, aircraft [original equipment manufacturers] and aircraft leasing companies,” said Dick Forsberg, Avolon’s head of strategy and author of the study.

 

“Competition for airlines is likely to be intense as Chinese airlines focus on capturing their growth potential while being challenged by international carriers.”

 

Forsberg said there was also huge potential for original equipment manufacturers and lessors to capitalise on the under-ordered position in China, particularly in the wide-body segment.

 

Rapid growth in outbound travel was the strongest factor fuelling demand for more flights and aircraft, the paper said.

 

 

China became the world’s largest source of international outbound tourists in 2012, overtaking Germany and the United States, accounting for almost 10 per cent of global cross-border trips, according to the paper. The China National Tourism Administration has projected outbound Chinese tourists will reach 200 million by 2020. Last year, the number was 122 million.

 

“This [2016] number represents less than 9 per cent of the total population and only 15 per cent of urban residents, suggesting that there is a great deal more growth ... Those travellers spent US$110 billion, which makes the market an extremely attractive one for the destination countries,” the Avolon paper said.