China`s purchases of more than US$11 billion worth of Airbus and Boeing jets last week highlights the increasing importance of the Chinese aviation market…
China`s purchases of more than US$11 billion worth of Airbus and Boeing jets last week highlights the increasing importance of the Chinese aviation market as the two rivals battle for supremacy of the skies.
On Thursday, flag carrier Air China agreed to buy 20 A330-200 aircraft from Airbus worth US$2.86 billion.
Celebrations at Airbus were short-lived, however, as U.S.-based Boeing trumped its European foe with its own multi-billion dollar deal to sell its new fuel-efficient 787 Dreamliner to six Chinese airlines.
Boeing, which formally renamed the jet the Boeing 787 Dreamliner, signed Friday a preliminary agreement in Washington with Chinese officials for 60 aircraft worth US$7.2 billion based on catalog prices.
Air China, China Eastern Airlines, China Southern Airlines, Hainan Airlines, Shanghai Airlines and Xiamen Airlines would have at least one of the new 200-plus seaters by the 2008 Beijing Olympics, the company said.
The 787`s advantages in efficiency, economics, environmental performance and passenger comfort are perfectly matched for China`s growing, world-class aviation system, said Alan Mulally, president and chief executive of Boeing Commercial Airplanes.
Not to be outdone, Airbus too signed another breakthrough deal Friday, this time for its new giant A380 to be delivered to China Southern Airlines, one of the country`s top three carriers.
At list price, the order for five of the 555-seater superjumbos, the first sold in China, tops US$1.4 billion in a deal Airbus parent European Aeronautic Defense and Space Company (EADS) has been waiting to sign for months.
Analysts said the see-saw announcements underscored the high-flying stakes between Boeing and its larger rival as they maneuver for orders in China, where annual economic growth of more than 9 percent has ramped up demand for air travel.
The competition between the two manufacturers is very intense, said Li Lei, an airlines analyst at Huaxia Securities.
With both manufacturers locked in a global dogfight for sales of their new jets, China, which is expected to build up a fleet of 2,800 aircraft over the next 20 years and become the world`s second-largest commercial aviation market after the United States, is a key battleground.
In the longer term, China is going to be a very big market. There`s going to be demand for a lot of different types of aircraft, said Peter Negline, an analyst from JP Morgan.
Currently, Boeing is developing more quickly in China than Airbus, Li said. But I think the domination of Boeing will not change in the short run.
To continue winning orders in China, both manufacturers would also have to navigate the fickle winds of Sino-European and Sino-American politics, analysts said.
I am sure China is going to spread the wealth as far as who they are going to buy from, Chris Sendor, an aviation analyst at DBS Securities in Singapore, said.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
