Airbus and Boeing hide identity of US$35.4 billion Chinese buyers as trade war creates minefield for international companies

Airbus and Boeing won’t name the customers who’ve placed multibillion-dollar orders, as the US-China trade war creates a minefield for companies that do business in both countries

PUBLISHED : Thursday, 19 July, 2018, 1:58am
UPDATED : Thursday, 19 July, 2018, 2:40pm

Airbus and Boeing usually don’t miss a chance to celebrate their biggest orders at the annual air shows – typically, top executives will trumpet them loudly at signing ceremonies staffed with a phalanx of smiling flight attendants.

Not this year. On the first three days at the Farnborough expo taking place outside London, Airbus has cloaked the identity of the customer behind US$24.4 billion in orders at list prices. Boeing followed suit regarding deals struck for planes valued at US$11 billion before customary discounts.

Boeing has a lot to lose in China as Trump, Xi clash over trade

Why? Airbus’s sales chief points the finger at US President Donald Trump, whose trade war with China has created a minefield for global companies that do business in both countries.

“The world today is governed by the tweets we receive every morning from one side of the Atlantic,” Eric Schulz, the top salesman at Airbus, said at an investor presentation on Wednesday. “So you know that that is putting a lot of pressure within the airlines, it’s putting a lot of pressure within the governments.”

Some customers, especially in Asia, have asked Airbus “not to fuel the fire”, Schulz said.

Some of the hidden orders came from customers in China, according to people familiar with the matter who asked not to be identified discussing non-public information. Trump is locked in a trade war with the United States’ biggest rival for global economic dominance.

The hidden orders constitute a big chunk of Airbus’s sales haul for the show. On Monday, an unidentified leasing firm signed a memorandum of understanding for 80 aircraft in the popular A320neo family, valued at US$8.85 billion before typical discounts.

Asian demand for 16,000 planes a jackpot for Boeing and Airbus

That was followed by a US$11.5 billion deal for 100 narrow-body jets, and one for eight A350-900 wide-bodies totalling US$2.5 billion. On Thursday, there was another order, this time for six of its A330neos, valued at about US$1.5 billion.

Most unidentified orders logged by Boeing and Airbus are thought by analysts to be placed by Chinese airlines or leasing companies. The buyers typically don’t go public until the purchases are approved by the Chinese government.

“I would prefer to have them disclosed, but at the end of the day, you know what, the money is in the bank,” Schulz said. “And so disclosed, undisclosed, that doesn’t make a lot of difference. The orders is there, that’s it.”

Airbus is based in Toulouse, France.

While Boeing hasn’t announced any sales to mainland China, it did strike a deal to sell 100 of its 737 Max narrow-body jets to Asia’s VietJet, in an agreement valued at US$12.7 billion that will make the Asian low-cost airline the biggest customer for the largest version of the aircraft.

VietJet, Vietnam’s first privately owned airline, has been bolstering its fleet and expanding its regional network. The deal with Boeing also includes training and technical assistance in Vietnam, which will help develop aviation in the country.