European planemaker Airbus far ahead of Boeing in talks for China orders
THE China Aviation Supplies Holding Company that buys commercial planes for them nation, has been in talks with Toulouse-based Airbus and not with Boeing since 2019 about purchasing jets for the next five-year plan that begins in 2021, Bloomberg reports
20 January 2020 - 19:00
Those talks began early last year, Bloomberg's unnamed sources. China's top economic planner, which needs to clear negotiations of this magnitude, hasn't even authorised the state procurement company to begin talks with Boeing yet as trade tensions held back discussions, one source said.
This means the Boeing is months behind Airbus in securing orders from China, which Boeing estimates will need more than 8,000 planes in the next two decades. Boeing is still reeling from the grounding of its best-selling 737 Max planes, which resulted in the company delivering fewer than half of the planes that Airbus did last year, the biggest defeat in the industry's 45-year duopoly.
Nonetheless, aircraft were among the US$200 billion in American purchases that China pledged to make as part of a phase-one on the new trade accords, though details weren't disclosed.
Also, it's unlikely that China would shun Boeing entirely because the country has historically split its orders evenly between the two manufacturers, Airbus doesn't have the capacity to meet all of China's needs and such a drastic move would require thousands of pilots to be retrained.
Trade tensions have hindered Boeing's ability to capitalise on surging demand from a country that's expected to become the world's largest aviation market in the coming years. China will need to spend $2.9 trillion on new aircraft and ground services over the next two decades, Boeing predicted in September.
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