Airbus, China reach accord on massive aircraft order, A350 cooperation

China's government reached agreement with Airbus yesterday on firm orders for 110 A320 family aircraft and 40 A330s valued at approximately $15 billion and also signed an MOU with the manufacturer stipulating that Chinese industry will take a 5% stake in A350 XWB production.

China Southern Airlines signed a separate contract for 10 A330-200s. The announcements of the large aircraft order and industrial cooperation on the A350 coincided with high-profile meetings taking place this week in Beijing between French President Nicolas Sarkozy and Chinese President Hu Jintao, both of whom were present for the signing of the MOU by Airbus COO Fabrice Bregier and National Development and Reform Commission Vice Minister Chen Deming.

According to Airbus, the MOU states that Airbus and NDRC will "carry out high-level industrial cooperation on A350XWB development and manufacturing work in order to enhance a closer strategic cooperation relationship between Airbus and the Chinese aviation industry. Airbus confirms its intent to manufacture 5% of the airframe of the A350 XWB aircraft in China." It added that a joint venture manufacturing plant will be established in Harbin in 2009 with AVIC II subsidiary Harfei Aviation Industry Co. "to produce [A350 WXB] composite material parts and components."

Airbus noted that six Chinese manufacturers "are already involved in manufacturing parts, such as wing components, emergency-exit doors and maintenance tools for Airbus aircraft." The plane maker also holds a 51% stake in a JV A320 Final Assembly Line in Tianjin, with first delivery from the FAL expected in the second half of 2009 (ATWOnline, June 29).

The 160 aircraft ordered yesterday raise the possibility that Airbus will top rival Boeing in 2007 orders, which was not anticipated earlier this year even by Airbus executives with the company in the midst of launching its Power8 restructuring program (see story below). Aside from the 10 A330-200s going to China Southern, distribution of the other 150 aircraft to Chinese airlines was not revealed, nor is it clear how many of the A320s will come from the Tianjin FAL.