Potential 300-plane Airbus deal could cement European dominance in China

WEB DESK: 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.

Deliberations are underway with Chinese airlines about the size of a potential order. A deal could involve about 300 planes and include both narrow-body and wide-body models. 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 European planemaker rose as much as 4.1 percent in Paris trading Rolls-Royce Holdings Plc, which makes engines for Airbus widebody aircraft, rose as much as 0.7 percent in London.

Airbus has steadily increased its share of sales to China, helped by a final assembly line in Tainjin 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.

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 Xii 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.

Indian airline IndiGo orders 30 Airbus A350 widebody planes

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 200 Boeing jets that rank as the largest by value for the US manufacturer.

In China, however, Boeing has been penalised. In April, authorities in Beijing told airlines to stop taking deliveries of Boeing jets. Trade tensions and the crises that befell the 737 Max models 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, reported Bloomberg, adding 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 places 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 Limited 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 2007 due to the trade tensions and self-inflicted issues. In 2009, China became the first nation to ground the 737 Max following two deadly crashes. Trade disputes with the Biden and first Trump administration also helped tilt Chinese orders toward Airbus.

Then in January 2024, Boeing suffered a quality crisis when a door plug blew out mid-flight fencing 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.