French President Macron confirms China will buy 184 Airbus A320 aircraft

Analysts say China keen on higher-value production instead of the current cabin installation, aircraft painting and flight tests

PUBLISHED : Wednesday, 10 January, 2018, 7:36pm
UPDATED : Wednesday, 10 January, 2018, 8:00pm

China has confirmed it would finalise an order for 184 Airbus A320 family aircraft, French President Emmanuel Macron said on Wednesday as he wrapped up his three-day state visit to China.

Macron told a press conference in Beijing that Chinese President Xi Jinping had confirmed the order and the planes would be delivered between 2019-2020 for 13 airlines, adding that China had pledged to maintain Airbus order volumes in the years ahead.

The deal would be valued at about US$19.8 billion at list prices.

However, France failed to secure a widely expected deal for the A380. It had planned to form an A380 industrial partnership with China if Chinese carriers placed orders for the world’s largest passenger jet.

Macron, however, said he had discussed A350 and A380 sales in the month ahead.

Airbus in talks to sell at least 100 jets to China, claim inside sources

China and other emerging market airlines’ orders are crucial for the fate of the A380 superjumbo, which faces a bleak future as it has not secured a new deal in the past two years, with Airbus planning to cut production of the double-decker airliner.

“China and other countries are not that interested in the A380. The operating performance of the five A380s purchased by China Southern Airlines is poor, which means to build a production line is not meaningful,” said Lin Zhijie, an aviation industry analyst and columnist at Carnoc, a civil aviation website in China.

To woo more Chinese orders, Airbus agreed to increase production capacity of its single-aisle A320 and A320neo aircraft in China. On Tuesday it signed a framework agreement with its Chinese partners to increase A320 monthly production rate to five by early 2019 from four, before reaching a monthly total of six jets by early 2020.

The Tianjin assembly and delivery centre, established in 2008, delivered its first A320neo aircraft in October.

China and other countries are not that interested in the A380. The operating performance of the five A380s purchased by China Southern Airlines is poor, which means to build a production line is not meaningful
Lin Zhijie, aviation industry analyst

Last September, the European firm extended the partnership with a completion and delivery centre for the twin-aisle A330 in Tianjin, its first outside Europe, after Chinese carriers placed a sizeable order for the widebody aircraft. The centre will be ready to deliver two aircraft per month by early 2019.

Lin said besides a final assembly line, which is high value-added, other activities such as cabin installation, aircraft painting, production flight test and delivery in Tianjin, are relatively low value added.

“Such production matters more for local GDP than China’s industrial advance. To improve industrial competence, China has to develop its own big-jet research and development capability,” Lin said.

Meanwhile, Airbus plans to cooperate with more Chinese suppliers, including private companies, to directly provide parts, China Daily reported on Tuesday, citing Francois Mery, chief operating officer at Airbus Commercial Aircraft China. State-owned Aviation Industry Corp of China is currently the dominant supplier.

President Xi also reiterated China’s position on parity in Airbus and Boeing orders, Macron said on Wednesday.

Both Boeing and Airbus are increasing their industrial presence in the country in an attempt to woo orders.

Macron signals French interest in China’s New Silk Road ambitions

Boeing sold 300 jets during a visit by US President Donald Trump last year. Boeing and its Chinese partners signed an agreement in September to build Boeing’s first overseas completion and delivery centre in Zhoushan, Zhejiang province.

China is expected to overtake the United States as the world’s biggest aviation market by 2024, according to the International Air Transport Association. Boeing has predicted the country will need 6,810 aircraft by 2035, making it the world’s biggest market worth over US$1 trillion.