According to a Bloomberg report, China is considering placing a major order for up to 500 aircraft with European aircraft manufacturer Airbus. This move would further consolidate Airbus's already strong position in the Chinese market and underscore China's growing shift away from Boeing and toward Airbus.
Negotiations on the potential order, which could include both narrow-body and wide-body aircraft, coincide with a planned summit of European leaders in Beijing in July, marking the 50th anniversary of diplomatic relations between China and the European Union.
China's strategic realignment: A possible major order for Airbus
Talks on the potential order are described as ongoing and in a "fluid" state. However, if the contract is finalized, it could represent one of the largest single orders in civil aviation history. Chinese Vice Premier He Lifeng visited France last month, where he met with Airbus CEO Guillaume Faury, among others. This indicates strong Chinese interest in deepening relations with Airbus.
Chinese airlines currently have a total of 323 aircraft on order from Airbus, significantly more than the 139 from Boeing. China's largest single order from Airbus to date was in July 2022, when Air China, China Eastern Airlines, China Southern Airlines, and Shenzhen Airlines agreed to purchase 292 A320 family aircraft. The order now under consideration could exceed this volume and, if it approaches the 500-aircraft mark, could be among the largest orders ever placed. However, it is common practice for Chinese airlines to disclose their orders relatively rarely and often remain anonymous until the aircraft are delivered.
Boeing's difficult situation in the Chinese market
Such an order would be a major setback for Boeing, which has been increasingly suffering from tensions in the US-China trade dispute in recent years. Beijing temporarily banned its airlines from accepting new Boeing aircraft. Although this ban has since been lifted, the US manufacturer is struggling to gain a foothold in the Chinese market. The Chinese government could use aircraft orders as leverage in the ongoing geopolitical and trade conflict with the United States.
The European Union is China's second-largest trading partner. In turn, China is one of Airbus's most important sales markets. The close economic cooperation between China and Europe is also reflected in the aviation industry. Airbus has expanded its production capacities in China, including with a final assembly line in Tianjin.
Impact on competition in the aviation industry
If the contract is awarded, it would further change the competitive landscape in the aviation industry. Airbus would consolidate its position as a leading supplier in the Chinese market, while Boeing would face ongoing challenges. China's decision to turn to Airbus is also a sign of the increasing trade tensions between China and the United States. The Chinese government appears to favor European companies that are less affected by the trade conflicts.
The potential large order underscores the growing importance of the Chinese aviation market. China is developing into a major hub for international air traffic. The decision as to which aircraft manufacturer will serve the majority of the Chinese market will have significant implications for the global aviation industry.
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