Airbus Wins Chinese Order Valued at $7 Billion for A320 Aircraft

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Airbus secured an agreement from China for 70 A320 single-aisle family airliners valued at $7 billion, helping expand in a country that is set to displace the U.S. as the world’s biggest aircraft market in two decades.

The so-called general-term agreement is for a mix of A320 and bigger A321s with existing engines, Airbus Chief Executive Officer Fabrice Bregier told reporters in Berlin today. The company also signed an agreement for an aircraft finishing center in China that will fit out A330 wide-body airliners. The A320s will be delivered starting in 2016, Bregier said.

In less than a decade, Airbus has doubled its market share in China to almost 50 percent, helped by a final assembly line in the country that has contributed to the output of A320s, Airbus’s best-selling airliner. Bregier said demand in China remains unbroken, even as some customers in other parts of Asia have been unable to accommodate all their orders.

“In other parts of Asia, we start to see some winners and some losers, some companies that cannot grow as fast as they expected,” Bregier said. “But this is life, it doesn’t mean the market is shrinking.”

The finishing center is a prerequisite to sell more A330s in China, with Bregier saying the company will take it “step by step.” The site will initially focus on the A330 regional variant before branching into the A330neo with new engines, the CEO said. A finishing center equips flyable but unfinished aircraft with interior fittings.

‘Never Easy’

The accord was signed today in Berlin, where Chinese Premier Li Keqiang met with German Chancellor Angela Merkel. The announcement comes six months after China unveiled an order for 60 planes valued at $8 billion during a visit by Chinese President Xi Jinping with French President Francois Hollande.

Airbus is working on handing over its first A350 wide-body airliner to Qatar Airways Ltd. this year, with at least one aircraft likely being delivered, Bregier said. While Qatar Air is a “demanding customer,” such close scrutiny is positive because it will help Airbus on later deliveries, he said.

“It’s never easy to deliver the first aircraft, but we do it in a very good spirit,” Bregier said. “We know it will be difficult to have it accepted by Qatar Airways teams because they are very demanding on quality, but it’s a good start, because if we pass this milestone, we have a very good way forward for the future of the A350.”

The company, based in Toulouse, France, is also performing its first test flights with the A320neo, an upgraded variant of the existing A320, and Bregier said he is satisfied with the level of progress so far. The CEO said Airbus took a brief pause after the first few outings of the aircraft to analyze the data and trim the engines, which are made by Pratt & Whitney, a unit of United Technologies Corp.