China to buy 100 to 150 Airbus aircraft every year till 2025, says EADS subsidiary

Troubled European plane-maker Airbus expects Chinese airlines to order 113 A380s over the next 20 years, and an average of 100 to 150 Airbus aircraft each year in the next five years, to meet the booming demand for air travel in the world's most populous country.

Airbus is making an extra effort to boost sales in Asia for the A380 superjumbo, whose maiden flight past Hong Kong's skyline at Asia's largest air show virtually kicked off the event on 3 September. Both Airbus and its main rival, Boeing, are in fierce competition to sell their jetliners to China's three leading carriers: China Southern Air, China Eastern and Air China.

Airbus's chief operating officer (CEO), Customers, John Leahy said on the first day of the Asian Aerospace forum at Hong Kong that the demand in the Chinese market should translate into a sale of around 100 to 150 Airbus aircraft each year for the foreseeable future. This, he said, is one of the reasons that Airbus decided to set up an aircraft assembly line in China.

The planned assembly line, which will make A320s, is to be in Tianjin. Leahy said that the plant would start operations with two-thirds European employees and one-third local residents, but that progressively, Airbus hoped to bring the mix to 90 per cent local and 10 per cent expatriate, within three to five years. Projected to deliver its first plane in early 2009, the plant should reach its full capacity of four planes a month in 2011, Leahy said.

The A380 burns 17 per cent less fuel per passenger-kilometre than any other plane in service, Airbus says, and emits just 75g of CO2 per passenger-km, half the European target for a car. Its efficiency is part of its appeal to Chinese airlines.

Leahy predicted that there would be more orders for the A380 from China over the next year. China Southern Air has already ordered five of the super jumbos, for which Airbus has a total of 173 firm orders or commitments, even after technical problems have delayed its deliveries by over a year.

Buyers include Singapore Airlines, Emirates Airlines and Qantas. Leahy said he did not expect new orders at the Hong Kong air show. Airbus is scheduled to deliver its first A380 to Singapore Airlines on 15 October.

Both Airbus and Boeing say they expect China to become the world's second-biggest aircraft market, after the United States, with airlines buying 1,900 to 2,600 planes in the next two decades. Travel to and from China is expected to keep climbing alongside its double-digit economic growth, dwindling restrictions and increasingly open skies.

Morgan Stanley estimates that global airline seat capacity will rise 3.8 per cent in 2007 and 5.2 per cent in 2008, driven largely by Asia. For Asia itself, seat capacity increases will be 8 per cent to 9 per cent for 2008-09, compared to 5 per cent in 2007.

One worrying factor for Airbus will be that last month, China adopted a series of measures aimed at reining in rapid growth in air traffic that has begun to raise concerns about safety. Applications to start new airlines are suspended until 2010, and existing airlines will be subject to government controls.

The General Administration of Civil Aviation of China (GAAC) is also making key airports cap the number of take-offs and landings allowed in a day. It is to impose sharp cuts on the flight schedules of the main airlines serving Beijing Capital International Airport, the busiest in the country, which handles 13 million more passengers per year than its facilities were designed to support.