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Last updated: August 25, 2014 11:11 pm
BOC Aviation, the aircraft leasing subsidiary of Bank of China, has made its biggest single order for aircraft yet with the purchase of 82 Boeing jets for $8.8bn, half of which will be used by customers in the booming market for Asian air travel.
Asia will account for almost 32 per cent of global passenger traffic by 2017, from 28 per cent in 2012, according to the International Air Transport Association.
By contrast, North America’s and Europe’s shares will continue to decline, from 26 per cent and 24 per cent respectively to 24 per cent and 23 per cent.
The latest order of Boeing aircraft will be delivered from 2016-2021 and is made up of 50 single-aisle 737 Max 8 aircraft, and 30 737-800 aircraft. Both have a range of up to six hours and would be used typically on a route from Singapore to Mumbai.
Robert Martin, chief executive of Singapore-based BOC Aviation, said the Boeing orders come in addition to 118 Airbus aircraft ordered over the past 18 months.
“We expect that probably half of our deliveries will go to Asia over next seven years, with the rest US and Europe, generally more for replacement [of older aircraft] than for growth. For Asia it’s a certain amount for replacement but more for growth,” he said.
Boeing expects 40 per cent of its new aircraft deliveries in the next 20 years to come from the Asia Pacific region, where a growing middle class of people who can afford to fly for the first time is driving record aircraft orders, many from low-cost carriers (LCCs) such as Lion Air of Indonesia.
Boston Consulting Group estimates that 1bn people in Asia will have annual earnings of at least $15,000 by 2030, and will therefore be able to afford to fly.
Boeing opened a sales office in Singapore in July, covering Asia excluding China and Japan.
However, concerns have emerged this year among analysts that some airlines are being too optimistic with their projections, given stiff competition not only between long-haul carriers and LCCs but between LCCs themselves.
That has led to signs of overcapacity, with some airlines already scaling back or cancelling deliveries.
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