Caixin
Jul 06, 2017 07:06 PM
BUSINESS & TECH

Airbus Lands Big Deal With Sale of 140 Planes in China

Airbus SAS has reached a deal to sell 100 A320 and 40 A350 jetliners to China Aviation Supplies Holding Co., a state-owned company that was set up in October to manage supplies and parts allocation across China’s civil aviation industry. Photo: IC
Airbus SAS has reached a deal to sell 100 A320 and 40 A350 jetliners to China Aviation Supplies Holding Co., a state-owned company that was set up in October to manage supplies and parts allocation across China’s civil aviation industry. Photo: IC

French jet manufacturer Airbus SAS says China Aviation Supplies Holding Co. (CAS) has agreed to buy 140 of its aircraft.

The sales agreement was signed by CAS Executive Vice President Sun Bo and Airbus CEO Tom Enders during a meeting with Chinese President Xi Jinping and German Chancellor Angela Merkel in Berlin.

The specific amount involved in the deal announced Wednesday was not disclosed. The latest purchase is worth over $22 billion at Airbus’ current average list prices, but buyers usually receive large discounts on bulk orders of aircraft.

CAS is a state-owned company that was set up in October to manage supplies and parts allocation across China’s civil aviation industry.

CAS will receive 100 A320 and 40 A350 XWB planes, which it will distribute to Chinese airlines. The smaller A320s are single-aisle jets that seat up to 240 passengers, while A350s can seat up to 366.

Additionally, “constructive talks with our Chinese partners” are “ongoing” regarding the German company’s A380 jets, which are the world’s largest passenger airliners, an Airbus representative told Caixin.

“China is today one of the world’s most important markets for aviation,” Enders said in a statement.

Chinese airlines today use more than 1,400 Airbus aircraft. Operations began in 2008 at the first Airbus assembly line outside of Europe, in Tianjin. The company began work last year on a new China factory — a finishing center for wide-bodied A330 jets — near its first Tianjin plant, and is also building a helicopter plant in Qingdao.

Airbus’ main rival, U.S. aviation giant Boeing Co., has also begun moving production to China. Construction of Boeing’s first China production facility in Zhoushan, Zhejiang province, began in late March.

China’s rapidly growing civil aviation market is set to surpass the U.S. by 2024, thanks to demand from its growing middle class, according to the International Air Transport Association.

In May, China’s homegrown answer to foreign passenger jets, the Comac 919 designed by the state-owned Commercial Aircraft Corp. of China, made its maiden flight.

Contact reporter Teng Jing Xuan (jingxuanteng@caixin.com)

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