New Delhi, February 02, 2018: The Asia-Pacific region, especially China, will remain GE Aviation’s (Stand F67) most important focus for widebody engine sales for the foreseeable future because the air transport growth rates the region’s nations continue to experience are higher than those in any other part of the world, according to the manufacturer’s top commercial-engines marketing executive.
“The Asia-Pacific is definitely the growth market” for sales of widebody aircraft, whereas “the rest of the world is more a replacement market…[and is more] predictable,” Bill Brown, GE Aviation’s commercial engines marketing manager told AIN.
Unlike the rest of the world, where “after 25 years [widebody] aircraft are driven out of service” and replaced, almost on a one-for-one basis, in China and the rest of the Asia-Pacific region “there are not just replacements but it is clearly the growth market,” said Brown. China in particular is a vitally important market for sales of widebody aircraft and engines, he added.
As a result, said Brown, “We want to be in there with widebody aircraft, because there will be a revenue stream for the next 40 years” from aftermarket sales of spare engine parts and MRO services, running throughout the lives of the latest GE-powered widebody production programs.
The Asia-Pacific region represented only about 10 percent of GE Aviation’s widebody-engine market 20 years ago, and today it is “20 percent and growing,” said Brown. The proportion of widebody aircraft and engine sales for which the region will account in the future is going to continue growing. “Airlines in Asia are buying aircraft in large numbers,” he added, and new airlines continue to be established before growing quickly—often first placing orders for regional jets, then ordering single-aisle aircraft and finally moving up into widebodies, he said.
“Going forward, growth rates in China and the Asia-Pacific are going to be 20 to 50 percent greater than in the rest of the world,” declared Brown. “Replacement drives [widebody orders] in North America and Europe, but the growth quantity is in the Asia-Pacific and China.” The region has “a huge population and economic growth is much more in its infancy” than in most other regions. “The number of [countries] with 6 to 7 percent [overall economic] growth rates is phenomenal. Absolute numbers [of aircraft and passengers carried] are still dominated by North America and Europe, but eventually China and the Asia-Pacific will overtake them,” he said.
Brown provided AIN with a detailed breakdown, by geographic region, of all sales to date of widebody aircraft powered by the GE90, GEnx, and GE9X. While these detailed numbers don’t include GE Aviation’s sales of spare engines in each region, they show that of total sales of 1,196 GE90-powered widebodies to date (1,096 of which are already in service and 100 of which remain to be delivered), 409 aircraft (377 of which are already in service and 32 of which are yet to be delivered) were ordered by or for operators based in the Asia-Pacific region. This means that fully 34 percent of all sales of on-wing GE90s to date have been for aircraft operated by Asia-Pacific carriers.
The Asia-Pacific is the second-most important geographic region for GE9X sales, after the Middle East with orders for 235 777X family widebodies. The 61 777Xs ordered by carriers based in the Asia-Pacific region represent more than twice the 30 777Xs ordered in total by European and North American airlines.
That 61-aircraft Asia-Pacific Boeing 777X order total also represents 19 percent of total 777X orders to date, a percentage closely in line with Brown’s estimate that the Asia-Pacific region now accounts for approximately 20 percent of all new GE Aviation widebody engine sales.
The proportion of GEnx-powered aircraft—Boeing 787s and Boeing 747-8s, whether freighters or passenger-carrying aircraft—now operated by carriers based in the Asia-Pacific region and China further emphasizes the Asia-Pacific region’s growing importance as a geographic market for sales of GE Aviation widebody engines. All together 249 of 687 GEnx-powered widebodies ordered to date are for operation by Asia-Pacific carriers, a number representing 36 percent of all GEnx-powered aircraft sales. The Asia-Pacific region also represents by far the most important geographic region for sales of GEnx-powered widebodies. North America follows a distant second with orders for 167 aircraft to date.
Of the 249 GEnx-powered aircraft ordered by Asia-Pacific customers thus far (141 aircraft are already in service and 108 remain to be delivered), about 100 have been ordered by Chinese customers, according to Brown.
He noted that the Asia-Pacific region overall is a particularly important market for GEnx sales because “60 to 80 percent of all 787s in those countries are GEnx-powered.” The Rolls-Royce Trent 1000 competes in the same market. Additionally, “About a third of all 747-8s are [based] in the Asia-Pacific,” he said.
While China and the rest of the Asia-Pacific region represent GE Aviation’s most important market for widebody-engine sales, the region is also growing in importance as a market for sales of regional jets and single-aisle aircraft. Many of these aircraft will be powered by GE Aviation CF34-family engines and engines produced by CFM International, of which GE Aviation is a 50 percent joint-venture partner.
“Everybody is buying single-aisle aircraft, even to fly transatlantic routes. There is an explosion of single-aisle sales everywhere,” said Brown. “And in the Asia-Pacific, it has happened there. There are thousands of single-aisle aircraft on order in the Asia-Pacific.” This leads him to wonder, “Is the widebody [market] being encroached on?”
To some extent the answer might be “Yes.” Many—even the majority of—regional international routes in the Asia-Pacific region are no greater in range than about 4,000 nm, a distance that modern single-aisle jets such as the A321neo and 737 Max 8 can easily fly nonstop. In the future, other than flying on routes with high traffic volumes and between slot-constrained airports, the major role of widebodies operated by Asia-Pacific carriers might be to operate long intercontinental sectors.
One new intra-Asia-Pacific market that Brown sees as particularly important for sales of single-aisle aircraft is that for air travel between developed eastern China and relatively undeveloped western China. As the Chinese government works to promote the economic growth of western China’s regions, it is building large new cities in those regions, leading to “a huge boom in building airports, serviced with single-aisles,” said Brown. “A lot of China’s domestic growth is with single-aisles and regional jets.”