Airbus is negotiating a major sale of A330neo aircraft to China, with talks gaining momentum since President Xi Jinping visited his French counterpart Emmanuel Macron last month.
The largest Chinese airlines are considering buying more than 100 of the upgraded A330 models, according to people familiar with the matter. The terms are still being discussed, and the timing is uncertain, said the people, who asked not to be identified because the matter is confidential.
The negotiations underscore the increasingly stark contrast between Airbus and Boeing when it comes to doing business in China’s crucial aviation market as geopolitical tensions between the Asian nation and the US run high.
China has once again halted imports from US-based Boeing, just months after they had restarted following a five-year drought, as regulators review a cockpit voice recorder design already approved by their counterparts in the US and Europe. Meanwhile France-based Airbus benefits from its local investment in Asia’s largest economy, including a factory that builds the workhorse A320neo model and another that installs interiors in the A330, and was one of the key beneficiaries of Xi’s recent outreach to European leaders.
A spokesman for Airbus declined to comment. Air China, China Southern Airlines and China Eastern Airlines didn’t immediately respond to Bloomberg News’ requests for comment. State-owned procurement agency, China Aviation Supplies Holding didn’t immediately respond to a fax seeking comment.
An order from China would shore up the backlog for the slower selling A330neo, which is an updated version of the older A330 with new engines and wings. Airbus also makes the more advanced and longer-range A350 model that has seen a flurry of orders in the last couple of years and is sold out until almost the end of the decade.
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Currently, Airbus has 165 unfilled orders for the A330neo, which made its commercial debut in 2018. The model has struggled to win new purchase agreements in a market full of discounted, readily available used versions, according to George Ferguson, an analyst at Bloomberg Intelligence. That means the European planemaker may be more open to offering better pricing and other terms to bolster its order book at a time it is planning to ramp up A330 production, he said.
For Chinese airlines, the deal would provide quicker access to new jets with better fuel efficiency as orders and supplier constraints stack up for Airbus’s A350 and Boeing’s rival 787 Dreamliner. Airbus and Boeing only have a handful of wide-body jets to deliver to China’s carriers, adding to the sense of urgency to finalise deals as planemakers see production slots for both single-aisle and twin-aisle jets fill up.
While the country is working on ramping up its homegrown aviation industry with the C919 model made by Comac, it doesn’t currently have a presence in the twin-aisle category.
Boeing has previously supplied hundreds of its 777 and 787 Dreamliners to Chinese carriers. The planemaker still has outstanding orders for over a dozen widebody jets from Chinese airlines, according to its website.
Widebody jets have seen a surge in demand as long-haul travel rebounds from the lows of the pandemic. Airlines across the world have been ordering new twin-aisle jets to replace older planes as well as expand their offerings. BLOOMBERG
