Airbus A330 Order From China to Help Build Bridge to New Version

Airbus Group SE’s order next week from China for A330 wide-body aircraft will help in the transition from the existing model to a variant with new engines and let Airbus avoid a deeper cut to output.

Chinese Premier Li Keqiang is planning a trip next week to France that will include a visit to Toulouse in the south of the country, where Airbus is based. The visit may bring an order announcement for as many as 70 A330s for Chinese airlines, the Financial Times reported, citing unidentified people familiar with the negotiations. Airbus declined to comment ahead of the visit.

Airbus announced plans in December to bring monthly production of its current A330 wide-body to six a month by 2016 from 10 as it prepared to introduce the newer A330neo with more-fuel-efficient engines. Even that lower goal had come into question by some analysts as the order backlog on the long-distance aircraft became thinner. A Chinese order on top of a deal from Saudi Arabia announced last week at the Paris Air show would help Airbus maintain the planned rate.

China’s vice commerce minister, Wang Shouwen, speaking at a press conference today in Beijing about Li’s upcoming visit, declined to comment on a possible A330 order, saying only that “details of any agreement will be revealed in due course.”

Biggest Market

For Airbus, filling gaps in the production line of aircraft getting upgraded is a key concern. Rival Boeing Co. faces a similar challenge with its best-selling 777-300ER, which will be succeeded in 2020 by the 777x. A Chinese order for Airbus could include a mix of older and newer variants.

China has always been the biggest geographic market for Airbus’s popular A330 wide-body. The country’s airlines have been widely expected to place fresh orders, especially after Airbus last year said it would develop a regional variant of the plane for the Chinese market.

The A330 is Airbus’s first and so far only wide-body plane to break the 1,000-delivery mark. Boeing reached that threshold with its 767, 777 and 747 models. The A330 was also the first wide-body to reach a construction rate of 10 planes a month, though Boeing’s 787 has since also achieved that output.

Any order from China for A330s would likely add one or two aircraft to the monthly output, Klaus Richter, Airbus’s head of purchasing, was cited by Aviation Week as saying last week during the Paris expo. Airbus has a backlog of 174 A330ceos, including A330-200s, A330-300s and freighters. The first new variant of the A330 is scheduled for delivery at the end of 2017.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE