Airbus widens its lead over Boeing in China with plans for second finishing line

New York
CNN
 — 

Airbus announced plans Thursday for a second final-assembly line in China, the latest sign that it has a lock on the key aviation market over rival Boeing.

The announcement came as part of a state visit by French President Emmanuel Macron to China. The signing of the agreement by Airbus CEO Guillaume Faury was witnessed by Chinese President Xi Jinping and by Macron.

It will add another line to the final-assembly facility that Airbus opened in Tianjin, China, in 2008, which has put the final touches on 600 A320 aircraft to date.

Airbus

(EADSF) operates four assembly sites around the world but it forecasts that China’s air traffic in particular will grow 5.3% annually over the next 20 years, significantly faster than the world average of 3.6%.

This will lead to a demand for 8,420 passenger and freighter aircraft between now and 2041, representing more than 20% of the world’s total demand for new aircraft, Airbus predicts.

Boeing

(BA) has similar forecasts for China’s aircraft demand.

But worsening trade relations between the United States and China have basically locked Boeing out of that key market for aircraft. Thursday’s deal includes the sale of another 160 Airbus aircraft to China, where more than 2,100 are in service already.

Boeing has not reported an order for a commercial passenger plane from a Chinese airline since 2017, only for orders from Chinese aircraft leasing companies that could be buying them on behalf of buyers outside of China, or for freighter aircraft, a segment of the market that Boeing dominates.

And deliveries to Chinese customers by Boeing have plunged. So far this year it has delivered only one 777 freighter to China Air Cargo, and there were only 12 jets delivered in 2022: eight freighters and four to a leasing company.

In 2017, the year the Trump administration first levied tariffs on US imports of Chinese goods, sparking a tit-for-tat trade tiff, Boeing delivered 161 jets to China, and slightly more in the following year. But with the 737 Max grounding and the pandemic causing a sharp fall off in demand for air travel, Boeing deliveries to China plunged to 45 in 2019, and to 27 in the three-plus years since then.

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