Industry Leader Luncheon
21 March 2005
Mr. David Wang, President Boeing China
Foreign Correspondents' Club, Hong Kong
Jonathan Sharp reports
Boeing’s Wang: Man For All Seasons But Not a Prophet
Anybody expecting the familiar "Anything - Airbus - Can - Do -Boeing - Can - Do - Better" type of presentation was pleasantly surprised when David Wang, President of Boeing China, focused less on the Product A vs. Product B rivalry and more on a macro view of the opportunities and obstacles presented by that emerging behemoth of civil aviation, China.
His shrewd views on the liberalisation of Chinese aviation, including the rapidly changing role of the Civil Aviation Administration of China (CAAC), as well as the enormous human resource needs of the Mainland’s aviation industry, were particularly illuminating.
As Aerospace Forum Asia President Martin Craigs noted in his introduction at the Forum’s 140th Industry Leader lunch, Wang is very much a man for all seasons as far as Boeing is concerned. "He likes to point out, he is not an aircraft salesman - he's in the making-the-cake-bigger business. And he's got lots of other Boeing people fighting for the slice."
We are all aware of the apparently unstoppable growth of China's aviation industry, which, as Wang said, relates to the phenomenal increase in China's trade and the rising prosperity of its people that enables them to travel - all of which is good news for those of us in the aviation business and aviation financing. Illustrating the enormous growth in air travel, Wang said the number of airline-served China-Japan city pairs had grown more than five times since 1990.
Already almost two million people are working in China on aviation jobs. These include 11,000 pilots - a figure that needs to grow to 55,000 over the next twenty years to meet the projected level of new aircraft deliveries. Wang said that in the past almost all Chinese pilots came from a military background. Today the proportion is less than 20 percent.
"It is in all of our interests to help develop the human resource capability . . . this is such a win-win thing for all of us, if we work together to help the Chinese aviation industry build their competence in people, in technical talent, in management capability, I think it's really worthwhile." Boeing's commitment in this field has included training 24,000 aviation specialists in the past eight years.
Energy conservation is now a national priority in China, Wang said. It has to be: in 2003 China imported 91 million tons of oil, a figure that this year is expected to soar to 270 million tons. With this issue in mind, Wang understandably allowed himself a plug for Boeing's fuel-efficient 787 Dreamliner, 60 of which have recently been ordered by Chinese airlines for delivery from 2008. "Say what you may, fuel is going to be so important for Chinese airlines."
Asked about the role of the CAAC, so long seen as a drag on Chinese aviation's efforts to become efficient, Wang said the situation was moving fast - in the right direction. "The government today regulates the spending on foreign exchange, therefore they approve certain purchases. But at the end of the day, the decision is becoming more and more what's best for the airlines and the flying public."
"We hope that as decision-making follows the market orientation, and with the direction that the government is pursuing, soon the airlines will be really able to make the decisions that are best for their operations, for their customer service and for their profitability. I think the government wants that to happen."
It will take time, however. Asked to hazard a guess how long it will be for Chinese airlines to have the autonomy to buy the aircraft they want, Wang wisely refused to be drawn. "You know what the Bible says should happen to prophets: if their prophecy doesn't come true, they get stoned!"
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