Macron moots huge China deal for Airbus – to company’s surprise

French President Emmanuel Macron floated the prospect of a massive  Airbus SE aircraft order at the end of a three-day visit to China, hours after the planemaker had said no new deals came out of the trip.

An aide to Macron said in Beijing yesterday that the potential sale concerns 184 A320 narrow- body jets for delivery to 13 airlines in 2019 and 2020. While the accord would be worth USD18 billion at list prices, it lacks the status of a formal agreement with the agency that approves Chinese aircraft purchases.

The confusion highlights the complexities of doing deals with China, where plane sales announced during politically charged visits by Western leaders don’t always deliver on their apparent promise. U.S. President Donald Trump celebrated a $37 billion Boeing Co. order following his first visit to Chinese counterpart Xi Jinping in November, only for it to emerge that the bulk of the 300 jets involved were from previously agreed transactions.

China has become a battleground for Airbus and Boeing as the manufacturing titans seek to dominate an aviation market expected to overtake the U.S. to become the world’s biggest as early as 2022.

In the case of the Macron trip, the aide said the planes would all represent new orders and include Airbus’s latest A320neo, an upgraded version featuring more-efficient engines, without elaborating on the airlines concerned or providing an estimated value.

The comments came in the final throes of a visit during which little new business was announced, with New Areva Holding SA failing to pin down a long-anticipated 10 billion-euro ($12 billion) deal to sell nuclear-
waste recycling technology to China National Nuclear Corp.

The Airbus announcement differed from one during Xi’s visit to Berlin in July, where a deal for 100 A320s and 40 A350 wide-bodies worth a collective $22 billion was revealed.

In that case, the planemaker secured a general-terms agreement or GTA through the National Development and Reform Commission, which has broad administrative and planning control over the Chinese economy. The order will be firmed up once aircraft are allocated to airlines and is likely to meet more immediate demand. China Aircraft Leasing Group Holdings Ltd. has also bought 70 A320 planes worth around $8 billion the past couple of weeks.

In a formal statement following Macron’s visit, France and China said they were exploring new plane contracts and discussing openings for the A330, A350 and A380 wide-body models. China also pledged to maintain rough order parity between Airbus and Boeing.

Of the mooted A320 deal, an Airbus spokesman said that the manufacturer does not comment on any possible commercial agreements.

Airbus Chief Operating Officer Fabrice Bregier, who led the company’s delegation, had earlier focused on the industrial relationship with China, saying Tuesday that A320 build rates at a plant in Tianjin, east of Beijing, will accelerate to six planes a month by 2020 from four now.

Airbus is also offering China a production role on its A380 superjumbo in an effort to secure a program-extending order for the slow-selling double-decker. That would include allowing it to undertake finishing and interiors work on the planes, a person with knowledge of the matter said.

The Toulouse, France-based company said separately yesterday that George Xu will take over as chief executive of Airbus China, having previously run the Tianjin production line. He succeeds Eric Chen, who becomes chairman of the national business. Bloomberg reported Tuesday that the move was pending.

Boeing predicts China will need more than 7,200 new aircraft worth over $1 trillion in the 20 years through 2036. The number of people flying to, from and within the country will reach 1.5 billion by that time, according to the International Air Transport Association. Helene Fouquet, Christopher Jasper, Bloomberg