Boeing sees China as No.2 market for 20 years

By Joseph Chaney

HONG KONG (Reuters) - Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) said on Tuesday China will remain its top market outside the United States for the next 20 years, as it vies with arch rival Airbus (EAD.PA: Quote, Profile, Research, Stock Buzz) to supply the country's booming airline industry.

The aircraft maker also said it expects one in 10 of the planes it makes to go to mainland China over the same period.

Boeing, which won 112 firm orders in China in 2006, is worried about increasing congestion in the mainland, but sees rapid growth in Chinese aviation for at least the next two decades, John Bruns, vice president for China operations in the firm's commercial airplanes group, told the Reuters China Century Summit.

"The growth rate may fluctuate, but think of it this way-- only 10 percent of the people that travel in China between cities travel by air," Bruns said.

"The potential is just massive."

The firm, however, won 120 firm orders in 2005.

Bruns said the drop in 2006 was normal and negligible, and was coy about whether Boeing would surpass its 2006 performance in 2007.

"It's hard to say if we'll beat it," he said.

CHINA FRENZY

China is a pivotal battleground between Airbus and Boeing, both of which are battling to sell jetliners to the country's three top carriers: China Southern Air (1055.HK: Quote, Profile, Research, Stock Buzz) (ZNH.N: Quote, Profile, Research, Stock Buzz) (600029.SS: Quote, Profile, Research, Stock Buzz), Air China (0753.HK: Quote, Profile, Research, Stock Buzz) and China Eastern (0670.HK: Quote, Profile, Research, Stock Buzz)

(600115.SS: Quote, Profile, Research, Stock Buzz) (CEA.N: Quote, Profile, Research, Stock Buzz).

Boeing expects China will need 2,900 commercial airplanes over the next 20 years, 64 percent of which would be single-aisle jets.

And the firm will control at least a 60 percent share of the Chinese market going forward, Bruns said without giving a definite time frame.

But worries linger that Chinese airliners could rescind orders after a Boeing plane operated by Taiwan's China Airlines caught fire and exploded after landing in Japan last month.

"Everybody is always interested in safety," Bruns said, but declined further comment on how the firm's customers had responded to the incident.  Continued...