Business

/

ArcaMax

Boeing's China orders dry up on US tensions in boost for Airbus

Anurag Kotoky, Danny Lee, Bloomberg News on

Published in Business News

China has traditionally split aircraft orders evenly between Airbus SE and Boeing Co. Recently though, there’s been a shift against the American half of the world’s planemaking duopoly.

Boeing missed out on a 40-plane deal in September, following an even bigger hit in July, when China ordered nearly 300 Airbus aircraft worth about $37 billion at sticker prices. The misses reinforce how simmering U.S.-Sino political tensions continue to complicate the dealmaking landscape for Boeing, which is also still waiting for its 737 Max to fly again in China.

Boeing, which hasn’t signed a major plane deal with China since 2017, took the unusual step of issuing a statement after the July Airbus order was announced.

“As a top U.S. exporter with a 50-year relationship with China’s aviation industry, it is disappointing that geopolitical differences continue to constrain U.S. aircraft exports,” Boeing said. “We continue to urge a productive dialogue between the governments given the mutual economic benefits of a thriving aviation industry.”

The agreement with Airbus for 292 aircraft from China’s big three state-owned carriers was one of the country’s largest-ever orders. The subsequent $4.8 billion deal in September was to supply 40 jetliners to Xiamen Airlines Co., a China Southern Airlines Co. unit that previously only operated Boeing planes.

Getting Political

 

Boeing did seal an order for up to 24 787s from Taiwan’s China Airlines Ltd. over summer, but that could end up hampering deals with mainland carriers due to the politically-charged nature of matters relating to Taiwan, which China claims is part of its territory. The order came shortly after a contentious visit to the island by U.S. House Speaker Nancy Pelosi in August. More than two dozen members of Congress have visited the self-governing democracy this year, the most since at least 2013.

Airbus was the frontrunner to win the China Airlines order until the last moment, people familiar with the matter said, asking not to be identified because the negotiations were confidential.

“Boeing’s exclusion from the Chinese market is poised to extend amid a worsening U.S.-China relationship, lengthening the company’s recovery timeline and crimping its outlook,” Bloomberg Intelligence analysts George Ferguson and Juan Chamorro wrote in a Sept. 28 note.

“Recent visits by U.S. politicians to Taiwan have further strained relations, which were already challenged under President Donald Trump amid a debate over competitive practices and intellectual property,” they said. “The Trump administration’s trade deal aimed to equalize some of the imbalances, but was obscured by Covid-19 and not enforced by President Joe Biden.”

...continued

swipe to next page
©2022 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

Comments

blog comments powered by Disqus