The China contract for 150 jets is worth $9 billion and puts Boeing ahead of rival Airbus.
Boeing won an order for 150 of its 737 aircraft from China in a transaction valued at as much as $9 billion at list prices. The contract widens the company’s lead this year over European rival Airbus in the world’s fastest-growing market for commercial jets.
China Aviation Supplies Import & Export Group, a state-owned company that buys planes for the nation’s airlines, is scheduled to sign the agreement in Beijing tomorrow during a visit to the city by President Bush, said Cui Yijun, an official at Hainan Airlines, declining to give details.
Boeing and Airbus are looking to emerging markets such as China and India where the number of first-time air travelers is rising. India’s Kingfisher Airlines said Friday that it will order 30 Airbus A320s for $2 billion.
About 30 percent of Boeing’s latest China order may have been announced earlier.
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“This is a massive endorsement for Boeing in the most hotly contested market worldwide,” said Doug McVitie, managing director of Dinan, France-based Arran Aerospace, a forecasting company. “This means Boeing takes the lead there now.” McVitie worked earlier for Airbus in China.
Boeing’s Hong Kong-based spokesman Mark Hooper and the company’s Beijing-based spokesman George Liu declined to comment.
Single-aisle aircraft like the A320 and 737 will make up 64 percent of jet deliveries to China over the next 20 years, according to a Boeing forecast.
The bulk order may be the largest this year by China since a $7.2 billion purchase in January for 60 Boeing 787 planes. Chinese airlines may buy 2,293 planes valued at $183 billion in the next 20 years, as the 7.3 percent annual growth rate of air traffic beats the global average of 5.2 percent, according to estimates.
“Airbus and Boeing are fighting hard and have invested heavily over the last 15 years” because “they see a great future for China,” said Arran Aerospace’s McVitie.
Boeing has recorded orders for 122 planes valued at $11.7 billion this year in China, compared with 66 valued at $8.3 billion by Airbus.
The Chinese government, which has also been in talks with Airbus for the A320 planes, may have chosen Boeing amid U.S. pressure for the country to let its currency strengthen against the dollar. The order may also be in exchange for more cooperation between China and the U.S. on political issues such as less U.S. military support for Taiwan and lifting of restrictions on U.S. technology exports to China.
Negotiators for the white-collar union at Boeing recommended rejection of the contract offered its engineers in Wichita, Kan.
The Society of Professional Engineering Employees in Aerospace (SPEEA) represents 802 engineers in the defense division in Wichita. SPEEA this week reached a tentative agreement on a contract for its bigger bargaining unit in the Pacific Northwest.
The Wichita proposal gives wage-pool increases 2 percent lower than those offered in the Puget Sound region. The contract would have a four-year span, a year longer than the contract here.
“This is the first stage of a ‘divide-and-conquer’ strategy,” said SPEEA Midwest director Bob Brewer. Union members will vote on the offer before the contract expires Dec. 5.
Seattle Times staff