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Low cost travel demand to drive fleet growth in NE Asia: Boeing

All News 11:56 October 22, 2018

SEOUL, Oct. 22 (Yonhap) -- A growing demand for low-cost travel will further drive up overall fleet replacement orders in Northeast Asia, a Boeing executive said Monday.

In its annual market outlook, Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, said passenger growth to and from countries like South Korea has continued to grow in recent years. In particular, Korea posted double-digit growth in outbound traffic this year despite a slight decline in inbound traffic.

"Due to the maturity of the market environment here in Northeast Asia, and especially in Korea, a much higher percentage of new airplanes will be used for replacement," said Tinseth. "In the next 20 years, 69 percent of all new deliveries in this region will be to replace older and less-efficient airplanes currently in service."

South Korea is a "very healthy, growing" low-cost carrier market in Northeast Asia with an annual growth rate of 31 percent over the past five years, the executive said.

In the next 20 years, airlines will need 42,700 new airplanes valued at $6.3 trillion, helped by higher travel demand from countries in the Asia-Pacific region. With the addition of the $8.8 trillion services market, the total commercial market will be valued at $15 trillion over the next two decades, he said.

With budget carriers powering growth in Korea, traffic growth in the Northeast Asia region will increase by two percent annually over the next 20 years. This growth will generate the need for 1,450 new airplanes, valued at $310 billion and will result in a total fleet size of 1,600 airplanes by 2037 for the region, the vice president said.

With a 70 percent hold on the global commercial sector, Boeing currently has an order backlog of 5,946 aircraft valued at $416 billion.

In this photo taken Oct. 22, 2018, Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, gives a presentation on the outlook of the commercial market outlook this year at a press briefing held in western Seoul. (Yonhap)

In this photo taken Oct. 22, 2018, Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, gives a presentation on the outlook of the commercial market outlook this year at a press briefing held in western Seoul. (Yonhap)

kyongae.choi@yna.co.kr
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