Airbus poised to clinch key Chinese orders

16th January 2005, Comments 0 comments

BEIJING, Jan 16 (AFP) - High-flying European airliner builder Airbus has already logged dozens of orders for its new giant A380 aircraft, and signs emerged on Sunday it would seal its success by clinching orders from China, one of the world's biggest operators.

BEIJING, Jan 16 (AFP) - High-flying European airliner builder Airbus has already logged dozens of orders for its new giant A380 aircraft, and signs emerged on Sunday it would seal its success by clinching orders from China, one of the world's biggest operators.

The Sunday Times reported that Airbus is close to clinching two key orders valued at USD 3 billion (EUR 2.28 billion) from China for its new plane, the biggest passenger airliner in the world which will roll out of its assembly hangar on Tuesday

Citing industry sources the newspaper said the Toulouse, France-based maker was in talks with the Chinese government and Cathay Pacific, the Hong Kong listed carrier.

Although orders have flooded in for the A380, Airbus's success is seen as depending on whether it can interest China, one of the world's biggest operators.

With the 2008 Beijing Olympics looming, there had been speculation that a Chinese order for the twin-deck, four-engine plane, which can carry some 550 passengers, would be announced at the A380's official roll-out on Tuesday, Hong Kong-based aviation analyst Peter Negline of bankers JPMorgan said earlier.

Such an announcement had already been expected when French President Jacques Chirac visited China in October, and again when German Chancellor Gerhard Schroeder was in Beijing in early December.

China's commercial air market is expected to be one of the world's largest in the coming years.

The Sunday Times report said that the Chinese government order, which is likely to be split between two airlines, Air China and China Southern, would be for five aircraft and a similar number of options to buy more.

The order of Cathay Pacific, it said, could be the same size, taking the value of the Chinese contracts, including options, to about USD 3 billion (EUR 2.28 billion).

The European group has so far received 139 firm orders for the A380 as well as 10 expressions of intent to purchase.

Airbus, which hopes the A380 will enable it to increase its global lead over US rival Boeing, did well last year on the Chinese front, recording firm orders for 58 of its smaller planes, including three from Hong Kong, and letters of intent for 23 more.

In the next two decades, Airbus sees potential sales to China of its products at some 1,600, while Boeing, which currently has a 62 percent market share, predicts more than 2,000 and the domestic Aviation Industries of China (AVIC) is looking at nearly 1,300.

While the Olympic Games are expected to attract tens of thousands of visitors to Beijing, relaxed restrictions by both China and foreign countries mean that many more Chinese are venturing abroad. All will need airline seats.

However, the number of orders for the A380 from Chinese airlines is not expected to be large, perhaps no more than 10 aircraft.

China is looking for a share in the latest aerospace technology, rather than the delivery of products fully finished.

Rainer Hertrich, the co-chief executive of Airbus' parent company, the European Aeronautic Defence and Space Company, said in Beijing last month he was confident China would place orders for the A380 soon.

He said an undisclosed number of what will be the world's biggest commercial airliner, which has a catalogue price of USD 275 million (EUR 209 million), had been reserved for China.

"The A380 will be rolled out in January and the first flight is scheduled for March. I believe in the end, if the Chinese want to see it flying, honestly the Chinese have to hurry up," Hertrich said.

China's Vice Foreign Minister Zhang Yesui strenuously denied a report in The Wall Street Journal that Beijing was holding up orders for at least five A380s because of the European Union's refusal to lift a 15-year-old ban on arms sales to China.

Airbus China president Lawrence Barron said in November the company will set up an engineering centre in China next year and hire 200 staff by the end of 2008.

The company was also discussing the possibility of setting up an operation that would assemble planes in the country, Airbus boss Noel Forgeard said at about the same time.

Airbus also wants to manufacture at least five percent of the parts for its proposed A350 model in China, the head of Airbus Germany, Gustav Humbert, said in December.

One in four of the 3,500-plus Airbus planes in operation around the world is equipped with parts made in China, according to the Xinhua news agency.

© AFP

Subject: French News

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