China’s booming air travel market will require 3,200 new airliners over the coming decade, with more than 50% still to be ordered, according to a new study released by lessor Avolon.

Ireland-headquartered Avolon, which was bought by China’s Bohai Leasing in 2016, is the world’s third-largest leasing business with a portfolio of close to 850 owned, managed and committed aircraft as of March 31.

In its white paper on the Chinese market, Avolon said China is the largest generator of outbound passengers, with more than 120 million people taking overseas flights in 2016. Significantly, this is still less than 10% of the country’s population.

It also noted the country’s international air traffic has been growing at an annual rate of 14% since 2010—well above the global average—and China’s fleet of 2,800 aircraft has been expanding by 11% annually since that date. It currently represents 13% of the world airliner in-service fleet.

However, this fleet has a high percentage of narrowbody aircraft compared to the average for the rest of the world, with Chinese airlines having a relatively low proportion of widebody types.

Over the coming decade, Avolon believes that of the 1,700 aircraft still to be ordered by the nation’s carriers, 1,150 will be narrowbodies, 150 will be regional jets and 400 will be widebody types.

“China offers an attractive long-term growth opportunity for domestic and international airlines, aircraft OEMs and aircraft leasing companies,” Avolon’s head of strategy and author of the study, Dick Forsberg, said.

“Competition for airlines is likely to be intense as Chinese airlines focus on capturing their growth potential while being challenged by international carriers. There is also great potential for OEMs and lessors to capitalize on the under-ordered position of the Chinese industry, particularly in the widebody segment of the market.”

The report cautions that the recent surge in new Chinese airlines entering the international market may be unsustainable, especially as local government launch subsidies run out.

The nascent Chinese airliner manufacturing industry is anticipated to capture an increasing percentage of narrowbody sales with the appearance of the COMAC C919 and the earlier ARJ-21 regional jet.

Alan Dron