This week, Airbus announced the signing of a General Terms Agreement which outlines the purchase of a total of 300 commercial aircraft for various China based airlines.  Airbus A320neo airplane

The announcement came in conjunction with this week’s state visit among Chinese President Xi Jinping and French President Emmanuel Macron in Paris.

The Agreement, signed by Airbus incoming CEO Guillaume Faury, and Jia Baojun, Chairman of China Aviation Supplies Holding Company(CAS), a holding concern for a collection of China’s state-owned airlines,  calls for the eventual purchase of 290 Airbus A320 Family aircraft and 10 Airbus A350 extra wide body (XWB) aircraft.

Details related to overall value and expected delivery dates were not disclosed, but European media outlets are valuing the deal as worth upwards of €30 billion.

China represents one of the largest markets for future needs in commercial aircraft and this announcement comes at a time of interesting political and industry contrasts.

The order itself is larger than industry watchers anticipated and matches an order for 300 Boeing aircraft that was previously announced when U.S. President Donald Trump visited Beijing in 2017. Since that deal, the U.S. and China remain entangled in heightened trade tensions, and no deals for new commercial aircraft were announced.

A trade and tariff agreement was initially expected this month, when President Xi was expected to fly to the U.S. from his state visit in France. The trade deal has now been tentatively pushed-back to sometime in April.  There was some speculation that the upcoming agreement might have included China’s purchase of additional Boeing aircraft.

The Airbus announcement  also comes in the midst of Boeing’s current ongoing crisis concerning the global grounding of the Boeing 737 MAX, a rival to the Airbus A320 neo aircraft. China’s aviation safety agency was the first to ground the aircraft after the Ethiopian Airlines tragedy, and the agency has since suspended the operating license of the 737 MAX across China.  While there is no believed direct correlation, the timing of this announced deal seems to send its own message that China is balancing its commercial aircraft needs among the duopoly of the globe’s largest aircraft manufacturers.

 

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