China weighs ordering hundreds of Airbus jets in major deal

Time of India

4 days ago

China is considering placing an order for hundreds of
Airbus SE
aircraft as soon as next month, when European leaders visit Beijing to celebrate the countries' long-term ties, according to people familiar with the matter.
Deliberations are underway with Chinese airlines about the size of a potential order, said the people, who asked not to be named discussing confidential matters. A deal could involve about 300 planes and include both narrowbody and widebody models, they said, with one person saying the order could range between 200 and as many as 500 aircraft.
Negotiations are fluid and could fall apart or take longer to reach a conclusion, the people said. Airbus declined to comment. Representatives for the Civil Aviation Administration of China didn't respond to a faxed request for comment.
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by Taboola
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The European planemaker rose as much as 4.1% in Paris trading. Rolls-Royce Holdings Plc, which makes engines for Airbus widebody aircraft, rose as much as 0.7% in London.
Airbus has steadily increased its share of sales to China, helped by a final assembly line in Tianjin for its popular
A320 family aircraft
. A deal of the magnitude being discussed would help cement the European planemaker's dominance in one of the world's top aviation markets.
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For its US rival
Boeing Co.
, doing business in China has become more difficult as the company gets caught up in President Donald Trump's trade war with Beijing. On Wednesday, Trump said in a social media post that Chinese leader
Xi Jinping
was very tough to make a deal with, raising doubts about the two largest economies reconciling their trade interests.
A high-profile deal with Airbus would allow Xi to send a message to Trump over trade. French President Emmanuel Macron and Chancellor Friedrich Merz of Germany are among leaders that may visit Beijing in July to mark 50 years of diplomatic relations between China and the European Union. Their countries are the two biggest shareholders in Airbus.
China and the US are at loggerheads over trade rules that Trump is determined to reset during his second presidential term. Should the two sides resolve their differences, Boeing could potentially win big — the US planemaker is America's biggest exporter and a jet sale was featured in a US-UK trade deal in May.
The close links between politics and plane purchases were highlighted last month when Trump visited the Middle East and helped bring home major deals, including an order from Qatar Airways for as many as 210 Boeing jets that ranks as the largest by value for the US manufacturer.
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In China, however, Boeing has been penalized. In April, authorities in Beijing told airlines to stop taking deliveries of Boeing jets. Trade tensions and the crises that befell the 737 Max model date back years, and have helped to give Airbus the upper hand in what was once a carefully balanced market between the two manufacturers.
Widebodies would be a significant portion of a new Airbus order, the people said, with one person saying the A330neo, the planemaker's smaller twin-aisle model, could win some sales. The number of widebody jets in backlog for China's state-run and privately operated carriers has dwindled, as Boeing has traditionally sold more in the market.
Should the order run to 500 planes it would rank as one of the biggest ever and certainly the largest for China, eclipsing a deal for about 300 single-aisle Airbus jets made in 2022 that was then worth around $37 billion. Air India Ltd. inked a purchase for 470 Airbus and Boeing planes back in 2023 and another Indian airline, IndiGo, placed a record-breaking order with Airbus in mid 2023 for 500 narrowbody aircraft.
Boeing hasn't won a major order from China since at least 2017 due to the trade tensions and self-inflicted issues. In 2019, China became the first nation to ground the 737 Max following two deadly crashes. Trade disputes with the Biden and first Trump administrations also helped tilt Chinese orders toward Airbus.
Then in January 2024, Boeing suffered a quality crisis when a door plug blew out mid-flight, forcing Boeing to slow output and denting its reputation among the flying public.
Any deal would likely be carried out through China's state-run aircraft procurement body, which typically negotiates on behalf of the country's airlines.