Top Chinese carrier to order five Airbus A380

BEIJING, Jan 26 (AFP) – Airbus is on the verge of the breakthrough order it needs in China for its A380 super jumbo, with state media Wednesday saying China Southern Airlines will purchase five of the giant planes in Paris this week.

If the deal goes through, the airline will become the first Chinese carrier to buy the new double-decker jet, providing a boost for the European group in its battle with US rival Boeing for dominance in the crucial Chinese market.

Citing a telephone interview with China Southern executive Yang Defeng, the China Daily said the contract would be inked in Paris on Friday.

A copy of French Transport Minister Gilles de Robien’s schedule for this week’s also shows the signing ceremony set for Friday.

Although orders have flooded in for the twin-deck four-engine plane which can carry some 550 passengers, Airbus’s ultimate success is seen as depending on whether it can interest China, one of the world’s biggest operators.

It is forecast that China will become the world’s second-largest commercial aviation market after the United States in 20 years time with a 2,800-strong fleet of planes.

To get there, its airlines will require nearly 2,300 new planes by 2023 and will spend some USD 183 billion (EUR 140 million) to quadruple their fleets, Boeing said recently.

“It is an inevitability that Airbus will get into the China market with the A380,” said Chris Sender, aviation analyst at DBS Securities in Singapore.

“It is obvious that China needs to refresh some of its fleet and the A380 fills the hole.”

Boeing currently has more than a 60 percent market share in China but it does not have an immediate answer to the A380. Sender said Boeing and Airbus would eventually even out with 50 percent each of the market.

“Airbus and Boeing will always go back and forth on market share,” he said.

China Southern’s Yang said the Guangzhou-based airline’s purchase “will have a strategic significance for the development of China Southern”.

The planes, however, are not expected to be delivered “for several years”.

The newspaper gave no financial details but with a catalogue price of between USD 263-286 million (EUR 202-220 million) per plane, the deal would be worth up to USD 1.4 billion (EUR 1 billion).

China Southern, one of the top three Chinese airlines with Air China and China Eastern, and Airbus in Beijing were not available for comment.

With the 2008 Beijing Olympics looming and tourist traffic to China booming, there had been widespread speculation that Chinese orders for the A380 would be placed at its official roll-out in France earlier this month.

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

News of China Southern’s plans followed comments last month by European Aeronautic Defence and Space Company co-chief executive Rainer Hertrich that China needed to get a move on if it wanted the plane in service for the Olympics.

“I believe in the end if the Chinese want to see it flying, honestly the Chinese have to hurry up,” he said, adding that 139 orders had already been placed worldwide for the jet.

Airbus is 80-percent owned by the EADS and the rest of the aircraft maker’s capital is owned by British defence contractor BAE Systems.

So far, Singapore Airlines, Lufthansa, Emirates, Air France-KLM Group, Virgin Atlantic and Korea Air have placed orders, the newspaper said.

Airbus did well last year on the Chinese front, recording firm orders for58 of its smaller planes, including three from Hong Kong, and letters of intent for 23 more.