We publish a separate Market Outlook for China that highlights opportunities and expected deliveries for the sub-150 seat aircraft segment. Our forecast sees 750 new airplanes added to airline fleets over the next 10 years with almost all (93%) acquired to meet growing demand. Just 7% of new deliveries will replace ageing aircraft.
Domestic traffic, measured in RPKs, is expected to grow 5% (CAGR) annually. That strength reflects the quick recovery of China’s airline industry from the impact of the coronavirus. In fact, 2020 domestic traffic is back to the same level as last year. Small and medium-sized aircraft, including Embraer E-Jets, were instrumental in restoring regional airline schedules after most service was suspended earlier this year.
Over 200 new airports will open through 2035 with many serving second and third-tier cities. Our forecast identifies a need for airlines to add more smaller-capacity jets to their fleets in order to satisfy demand in those new markets. Aircraft up to 150 seats are ideally suited for lower-traffic routes.
Today, 99 E-Jets flown by Chinese airlines connect 150 cities on 550 routes and carry some 20 million passengers annually across the country.