Airbus SE is in advanced negotiations to sell more than 100 A330neo aircraft to major Chinese airlines, marking a significant potential deal in the competitive aviation sector, according to Bloomberg News. This development follows recent high-level meetings between Chinese President Xi Jinping and French President Emmanuel Macron, signaling strengthened ties between the two nations and their respective industries.
The discussions, first reported by Bloomberg, have gained momentum and could culminate in a substantial order for Airbus. This move comes at a crucial time as Airbus seeks to bolster its presence in the world's second-largest aviation market, where it anticipates annual traffic growth of 5.3% over the next two decades, surpassing the global average of 3.6%.
While Airbus has not publicly commented on the confidential negotiations, the potential deal underscores the company's strategic positioning in China. Airbus has already made significant inroads into the Chinese market, highlighted by its agreement last year to establish a second assembly line for its A320neo narrow-body aircraft during Macron's state visit to China.
In contrast, Boeing, Airbus's primary competitor, has faced considerable challenges in the Chinese market due to ongoing geopolitical tensions and regulatory hurdles. The U.S. planemaker has struggled with production delays and delivery backlogs, exacerbated by issues such as the regulatory reviews of cockpit voice recorder batteries. Boeing currently has around 140 737 MAX 8 aircraft in stock, with 85 intended for Chinese clients, indicating significant delivery challenges.
The potential Airbus deal with China is seen as a strategic maneuver to capitalize on these challenges faced by Boeing. For Chinese airlines, acquiring the A330neo jets would provide quicker access to more fuel-efficient aircraft, especially as orders and supplier constraints build up for other models like Airbus's A350 and Boeing's 787 Dreamliner.
Christian Scherer, Airbus's CEO, has previously expressed confidence in the company's position within the Chinese market, downplaying threats from local competitors such as China's Comac C919. Scherer has suggested that the market is sufficiently large to accommodate competition, highlighting Airbus's strategic investments and partnerships in China.
The geopolitical landscape further complicates the aviation sector's dynamics. China's recent decision to tighten export controls on aviation and aerospace technologies, effective from July 1, mandates export licenses for specific aviation components and technologies. This move reflects China's broader strategy to protect its technological advancements and navigate the complex geopolitical environment.
Amid these developments, the potential Airbus order represents a significant boost for the A330neo program, which has struggled to secure new purchase agreements. The deal would enhance Airbus's backlog and reinforce its competitive edge in the Chinese market, leveraging local investments and the current geopolitical climate to its advantage.
