(Bloomberg) -- After Boeing Co.’s European archrival revealed a major deal to provide aircraft to Chinese carriers, the US-based planemaker bemoaned its home country’s trade war with China for bruising its business prospects.
“As a top US exporter with a 50-year relationship with China’s aviation industry, it is disappointing that geopolitical differences continue to constrain US aircraft exports,” a Boeing spokesperson said Friday in a statement.
The agreement for Airbus SE to provide 292 planes to Chinese airlines in a deal worth $37 billion is a stark reminder of Boeing’s uncertain standing in one of the world’s largest travel markets. Both Airbus and Boeing have held long-running talks for large narrow-body aircraft orders that would help China replenish and grow its domestic fleet this decade, said a person familiar with the matter.
But, for now, Boeing can only watch as Airbus celebrates an order bonanza that doubles a 290-aircraft deal the European manufacturer struck in March 2019.
“This is China sending a sign, and it hurts Boeing terribly,” said George Ferguson, analyst with Bloomberg Intelligence.
It’s unclear whether China’s airlines can look solely to Airbus to fill their medium-term flying needs, as a waning pandemic is likely to spur demand, and the European planemaker is already running low on delivery slots to offer prospective customers.
China plays a critical role in Arlington, Virginia-based Boeing’s turnaround efforts after two fatal 737 Max crashes, one in 2018 and the other in 2019. Regulators in Beijing were the first to ground the Boeing jet after the second tragedy. While China approved the plane’s return at the end of last year, airlines in that country still haven’t resumed using that aircraft for commercial flights or taken any deliveries.
Boeing is storing around 150 jets that it built but never delivered to China, most of them narrow-body Max models. Restarting those hand-overs would generate cash that the US manufacturer badly needs to help pay down its $58 billion debt. Those deliveries also would help make the case to speed Boeing’s 737 production, Ferguson said.
China’s largest carriers have traditionally carefully balanced deals between the aerospace duopoly in order to maintain maximum leverage. The government, which oversees such purchases, tends to reveal them in carefully timed events -- like state visits -- to punctuate its policies on trade.
“We continue to urge a productive dialogue between the governments given the mutual economic benefits of a thriving aviation industry,” the Boeing spokesperson said. “Boeing aircraft sales to China historically support tens of thousands of American jobs, and we are hopeful orders and deliveries will resume promptly.”
The state-owned carriers revealed the latest Airbus purchase in a series of filings Friday, after being deliberately opaque as to when they’ll restart Max deliveries that have been halted since 2019. The Boeing orders haven’t been canceled, however, said the person familiar with the matter.
At the market’s peak in 2018, China took around 350 jets in a single year, notes Richard Aboulafia, analyst with AeroDynamic Advisory. By prioritizing China’s deliveries, Airbus could further squeeze Boeing, he said.
“The Chinese are preparing for a comeback just like you’re seeing in the rest of the world, and it’s pretty clear the US is at a disadvantage,” he said.
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