Wednesday, July 5, 2017

Airbus Seals 140-Jet China Deal, in Talks to Sell Superjumbos

Airbus SE won orders from China to supply 140 single-aisle and wide-body jets worth $22 billion at list prices and said it’s in talks to sell more A380 super-jumbos there following the signing of accords on closer cooperation in the aviation and space sectors.

The European plane-maker secured an outline deal for 100 A320-series jets split between current and new-engine-option versions, as well as 40 of its latest twin-aisle A350s, Chief Executive Officer Tom Enders said Wednesday in Berlin during a visit to the German capital by Chinese President Xi Jinping.

“This is a great endorsement of our leading products in both the single-aisle and wide-body segments,” Enders said. “China is one of the world’s most important markets for aviation today.” Talks are underway regarding a deal for more A380s to add to five sold to China Southern Airlines Co., with Airbus seeing demand for as many as 100 super-jumbos in the region, he said.

Airbus already has a narrow-body production line in Tianjin, east of Beijing, and output of the A320s will be split between that site and Europe, according to Enders. The company is also looking at expanding a Chinese completion operation for its existing A330 model to include the re-engined A330 Neo, as well as the A350, he said, while exploring further collaboration in helicopter manufacturing and space technology.
‘Not Panicking’

Enders announced the plane sales at Airbus’s Berlin offices after leaving the nearby German Chancellory, where Chancellor Angela Merkel separately detailed new accords with China also including Siemens AG and Daimler AG.

The CEO said that while the order backlog for the A380 is “melting” following a sales blank last year and in the first six months of 2017, Airbus is “not panicking yet,” especially since cost savings will allow it to break even on a per-plane basis at a production rate of just one super-jumbo a month.

Though the doubledecker is proving tough to market, there are still sales leads, with China presenting realistic order prospects, he added.

“I don’t think it impossible that we will have some success there in coming years,” Enders said. “We are in talks.”

The sales agreement is with China Aviation Supplies Holding Co., Airbus said, with the aircraft to be allocated to individual airline operators over the next five to six years.

(Benedikt Kammel and Benjamin D Katz - Bloomberg News)

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