Airbus SE EADSY is negotiating a significant sale of A330Neo aircraft to China.
What Happened: The discussions have gained momentum since President Xi Jinping visited French President Emmanuel Macron last month. According to sources familiar with the matter, Bloomberg reported on Tuesday, that major Chinese airlines are considering purchasing over 100 of the upgraded A330 models.
The negotiations highlight the growing contrast between Airbus and Boeing Co. in China’s aviation market amid high geopolitical tensions between China and the US. China has once again halted imports from U.S.-based Boeing, while Airbus benefits from its local investments in China.
An order from China would boost the backlog for the slower-selling A330neo, which has struggled to secure new purchase agreements. For Chinese airlines, the deal would offer quicker access to more fuel-efficient jets as orders and supplier constraints accumulate for Airbus’s A350 and Boeing’s 787 Dreamliner.
Why It Matters: The potential sale of over 100 A330neo jets to China by Airbus SE could significantly impact the competitive landscape in the aviation sector. This move comes when Boeing’s deliveries to China have been delayed due to regulatory reviews of cockpit voice recorder batteries. Boeing has around 140 737 MAX 8 aircraft in stock, with 85 intended for Chinese clients, highlighting the potential backlog and delivery challenges.
Moreover, Airbus CEO Christian Scherer has previously downplayed the threat from China’s Comac C919, suggesting that the market is large enough for competition. This confidence underscores Airbus’s strategic positioning in the Chinese market, especially as it leverages local investments and partnerships.
Additionally, China’s recent decision to tighten export controls on aviation and aerospace technologies, citing national security, further complicates the geopolitical landscape. These new regulations, effective from July 1, mandate export licenses for specific aviation components and technologies, reflecting China’s broader strategy to safeguard its technological advancements.
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Image by VanderWolf via Shutterstock
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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