Boeing Expects About 200 Orders From China for 737 MAX Airplane This Year

Boeing Co. (BA) expects to win about 200 orders for the 737 MAX in China in 2012, even as the Asian nation works on developing a competing jet that’s due to enter service a year earlier.

“We’re out talking to every single airline in China about the 737 MAX,” Jim Albaugh, Boeing’s commercial-aircraft chief, said in a Bloomberg Television interview yesterday in Beijing. Orders may total “a couple of hundred” 737 MAXs in China this year and “quite a number” of 747-8s, he said.

Boeing and Airbus SAS are both hunting for the first sales of their in-development narrow-body jets in China, the world’s fastest-growing aviation market, while the planned C919 from state-backed Commercial Aircraft Corp. of China has amassed about 225 orders and commitments there. The three planemakers may eventually have about equal market shares, Albaugh said.

“Comac is going to sell into their domestic market and they’ll probably also sell some of their planes around the world,” he said. “In the years to come, they’re going to be a tough competitor.”

The C919 and 737 MAX compete in the single-aisle segment that dominates global airline fleets. The market will probably account for 71 percent of the 5,000 new planes that Chinese carriers will order through 2030, according to forecasts from Chicago-based Boeing.

Comac’s plane is due to enter service in 2016, while Airbus targets a late-2015 debut for the A320neo, the newest variant in the Toulouse, France-based planemaker’s narrow-body family. The C919’s only overseas buyer is General Electric Co. (GE)’s leasing arm, which has signed up for as many as 10. GE is also supplying the engines and forming an avionics venture with Comac’s parent.

Boeing rose 1.3 percent to $73.52 in New York trading yesterday. It’s little changed this year, compared with a 7.6 percent gain for the Standard & Poor’s 500 Index

Wide-Body Orders

In the wide-body segment, Boeing anticipates “several dozen” 777 orders in China this year, and deals for both 747-8 passenger and freighter jumbo jets, Albaugh said, without elaboration. Hainan Airlines Co., backed by the government of Hainan province, may swap 787 orders for 747-8s, Chen Feng, the chairman of its parent, said last week.

Boeing will deliver the first 747-8 to be used for commercial passenger flights to Deutsche Lufthansa AG (LHA) this month, Albaugh said. It has already handed over 747-8s for use as freighters and private aircraft.

The planemaker has won orders for 106 747-8s, an updated and more fuel-efficient version of the humpbacked 747-400, according to its website. Global demand for such sized aircraft may total as many as 1,000 over 20 years, Albaugh said.

787 Delivery

Boeing expects to deliver its first 787 Dreamliner in China this year to China Southern Airlines Co. (1055), the nation’s biggest carrier by passengers. The handover will probably take place “later this summer,” Albaugh said. Boeing has 59 orders for 787s from Chinese airlines, according to its website.

China Eastern Airlines Corp., the country’s second-biggest carrier by passengers, swapped 24 orders for 787s last year in favor of smaller 737s because of delivery delays and a slowdown in demand for long-haul international travel. Boeing doesn’t expect many other Dreamliner cancellations, Albaugh said.

“We see very few people right now that are talking about getting out of that airplane,” he said. “If they are, it’s because of financial issues. It has nothing to do with the performance.”

--Stephen Engle, Tian Ying and Jasmine Wang. Editors: Neil Denslow, Ed Dufner

To contact the reporters on this story: Stephen Engle in Beijing at sengle1@bloomberg.net; Tian Ying in Beijing at ytian@bloomberg.net; Jasmine Wang in Hong Kong at jwang513@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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