Sept. 18 (Bloomberg) -- Boeing Co., the biggest supplier of airplanes to China, raised its 20-year market forecast for the country by 21 percent as Chinese air travel expands at the fastest pace worldwide.

Airlines in China will spend $340 billion on 3,400 new commercial planes, Chicago-based Boeing said today in an e-mailed statement from its Beijing office. That compares with last year's estimate of $280 billion in spending on almost 2,900 planes.

China, the largest buyer of commercial airplanes outside the U.S., will more than triple its fleet in the next 20 years as carriers expand capacity to handle passenger traffic rising at three times the global rate. Boeing and European rival Airbus SAS are battling for market share as increased travel within China and to and from North America and Europe spurs demand.

``As China's population is more able to fly overseas as their incomes grow, we should see a real surge in demand for travel,'' said Derek Sadubin, chief operating officer of the Sydney-based Centre for Asia-Pacific Aviation, an industry consultant. ``If the economy continues to stay strong, demand will continue to grow in double digits, probably until at least the end of the decade.''

Worldwide passenger traffic will climb 5 percent a year in the next two decades, according to Boeing's global market outlook, released in June. Air-cargo transportation will increase 6.1 percent annually, the U.S. planemaker said.

`Fastest Growing Market'

``China will have the fastest growing market, making it the largest market outside of the U.S. for new commercial airplanes,'' Boeing said. ``Following the anticipated surge in passenger traffic for the 2008 Beijing Olympic Games, the China domestic market will grow nearly fivefold by 2026.''

Almost two-thirds of China's deliveries during the next two decades, representing 2,200 units, will be for single-aisle aircraft, Boeing said. Boeing's 737 and Airbus's A320 compete in that class. Chinese airlines will order about 750 twin-aisle models, such as Boeing's 787 and Airbus's A350. Those two segments will make up 90 percent of China's total deliveries in dollar value in the period, the U.S. company said.

Of the 1,055 commercial jetliners operating in mainland China in March, 628, or 60 percent, were Boeings and 30 percent were made by Airbus, according to the U.S. manufacturer's Web site. Commercial airplanes accounted for almost half of Boeing's $61.5 billion in total sales last year.

Outbound Journeys Triple

Chinese carriers plan to add 27 overseas routes by the end of 2009 as new planes arrive and growth makes business trips and holidays affordable to more people. The country's outbound journeys, which have almost tripled over the past five years, may triple again to 100 million by 2015, according to the World Tourism Organization.

Deutsche Lufthansa AG, Singapore Airlines Ltd. and Korean Air Lines Co. have set up cargo-airline ventures to benefit from rising freight shipments from China, the world's fastest-growing major economy. Air freight from the country is expected to increase 10.8 percent annually until 2025, Jim Edgar, Boeing's vice president of cargo, said at a conference on Sept. 4.

Demand for cargo planes by airlines around the world is being spurred by increased shipments of mobile phones, semiconductors and other goods made in China.

About 140 billion yuan ($18.6 billion) will be spent on building and expanding airports in China by 2010, according to government plans. The country had 147 airports in operation last year, with the number set to rise to about 190 by 2010.

Boeing's shares have gained 11 percent this year, valuing the company at $77.3 billion. European Aeronautic Space & Defence Co., the parent of Toulouse, France-based Airbus, has fallen 23 percent, for a market value of 16.4 billion euros ($22.8 billion).

The U.S. planemaker's ties to China go back to the year of the company's creation in 1916, when founder William E. Boeing hired Beijing-born Wong Tsu as the company's first engineer, according to Boeing's Web site.

To contact the reporter on this story: Lee Spears in Beijing at lspears2@bloomberg.net; Kyunghee Park in Hong Kong at kpark3@bloomberg.net.

Last Updated: September 18, 2007 01:41 EDT