Airbus Secures $10 Billion Order from China in Aerospace Industry Shift

Strategic Insights -

Airbus, the European aircraft maker, yesterday secured its biggest order agreement with China, pledging to buy $10 billion worth of passenger liners. This massive deal, involving six Chinese airlines and 150 new A320 aircraft, underscores the vast potential of the Asian aerospace market. The agreement follows closely on the heels of China's announcement to buy 150 aircraft from Boeing, with the first 70 planes expected to be delivered next year.

Key Takeaways:

  • Airbus has secured its largest order agreement with China, valued at $10 billion.
  • The deal involves six Chinese airlines and 150 new A320 aircraft, marking a significant shift in the aerospace industry.
  • The agreement follows China's announcement to buy 150 aircraft from Boeing, with the first 70 planes due for delivery next year.
  • The A320 family of single-aisle jets comprises four aircraft capable of seating 107 to 185 passengers.
  • Airbus analysts predict that by 2023, the Asia-Pacific region will have more passengers than both Europe and North America.
  • Airlines in Asia are forecast to experience annual growth of almost 9% for the next 20 years, making them the fastest-growing market in the world.
  • Despite Airbus winning the order, Boeing still maintains a strong presence in the Asian market, having persuaded Chinese airlines to become early customers for its new 787 aeroplanes.
  • The aircraft deal was signed during Chinese Premier Wen Jiabao's four-day visit to France, where he announced a raft of industrial and strategic partnerships.
  • EADS, the parent company of Airbus, also signed a deal with AVIC II, a Chinese manufacturer, to develop a new 6-tonne helicopter for the international market.
  • The wings for the A320 aircraft may be built in the UK, with British engineers helping to set up assembly lines to enable Chinese production.
  • Setting up assembly lines in China is crucial for Airbus to win significant orders.

Statistics:

  • $10 billion: The value of the order agreed upon by Airbus and China.
  • 150: The number of new A320 aircraft to be delivered to six Chinese airlines.
  • $4.4 billion: The value of the first 70 planes from Boeing expected to be delivered next year.
  • 80%: The percentage of ownership that EADS has in Airbus.
  • 20 years: The time period within which airlines in Asia are forecast to experience 9% annual growth.
  • 9%: The annual growth rate expected for airlines in Asia.
  • 2023: The year by which the Asia-Pacific region is expected to have more passengers than Europe and North America.

Sources:

  • The Times, 2005
  • Airbus
  • Boeing
  • EADS
  • AVIC II