Taiwan’s China Airlines is reportedly on the verge of splitting a substantial order for long-haul passenger jets between Boeing Co. BA and Airbus SE EADSY. This decision aligns with the recent U.S. presidential election outcome, where Republican Donald Trump reclaimed the presidency.
What Happened: The airline is evaluating Boeing’s 777X and Airbus’s A350-1000 models to replace its existing fleet of 10 Boeing 777-300ERs. The order could encompass up to 20 passenger jets, potentially divided equally between the two manufacturers. The decision on freighters remains uncertain, influenced by the political climate post-U.S. elections, Reuters reported on Thursday.
The estimated value of this passenger jet order is approximately $4 billion, considering standard industry discounts, as reported by aviation consultancy Cirium Ascend. The airline’s board is yet to finalize the decision, with no confirmation on the exact number and types of planes involved.
China Airlines, primarily owned by the Taiwan government, previously ordered 16 Boeing 787-9s in 2022. Despite past concerns, Taiwan’s government remains optimistic about maintaining robust relations with the U.S. under Trump’s leadership. The airline’s chairman, Hsieh Shih-chien, stressed that fleet decisions are made independently of political influence.
Why It Matters: The aerospace industry has been under scrutiny, with companies like Boeing and Airbus facing questions about their high valuations. Defense and aerospace stocks have shown a remarkable 22% return year-to-date, driven by geopolitical tensions.
Additionally, Boeing’s recent labor agreement ended a seven-week strike, securing significant pay increases for workers, which could impact production costs. Meanwhile, Airbus’s recent orders highlight its strong market position, with 85 new orders reported in September.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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