Boeing Expects More Dreamliner Cancelations but Sees Growth in South Korea

Airplane maker Boeing Co. predicted Tuesday that more sales cancellations were on the horizon for its Dreamliner 787 after a Chinese airline cancelled orders.

Frankly, as we look forward, we expect to see the Dreamliner order base increase, we expect to see more orders, we expect to see more cancellations, especially as we go through mitigation with our customers, Randy Tinseth, Boeing Commercial Airplanes Vice President of Marketing, told a briefing in Seoul while showing off the Dreamliner.

Reuters reported Tuesday that China Eastern airlines cancelled 24 orders. Instead, the airline said that it would spend $3.3 billion to purchase 45 new Boeing 737s.

Despite the expected cancellations, Boeing said Tuesday that 1,250 new airplanes would be delivered to Northeast Asian carriers over the next 20 years, bringing in around $200 billion over that time period. Much of that demand will come from South Korea.

The combined effect of liberalization and rapid economic growth is driving passenger traffic in the region, Tinseth said in a statement.

Air travel in Northeast Asia is expected to grow moderately at 4.3 percent annually over the next 20 years, Tinseth continued. Korea's dynamic economy as well as the nation's thirst for air travel will fuel growth for the region.

Boeing predicts a majority of aircraft purchases will be for the company's 787, 777 and 747-8 aircrafts. Furthermore, Tinseth said single-aisle airplanes such as the Boeing 737 and 737 MAX will continue to foster strong demand in the Northeast Asia region.

Shares of Boeing are up 2.59 percent to $63.38 at early afternoon trading.

Write to Samuel Weigley at s.weigley@ibtimes.com.