Ludovic Marin/Pool via Reuters
- China signed an order for 300 Airbus planes on Monday.
- The deal is worth about 30 billion euros ($34 billion), French government officials told Reuters.
- The order comes as China’s aviation authority suspended airworthiness certificates for the 737 Max 8, which is made by Airbus rival Boeing.
- The drop of confidence in the Boeing jet came after two of its models crashed and killed everyone on board within five months of each other.
China signed a multibillion dollar deal to buy 300 planes from Airbus just 24 hours before its aviation authority suspended airworthiness certificates for the Boeing 737 Max 8 after two deadly crashes in the past five months.
The order, placed by China’s state buying agency, China Aviation Supplies Holding Company, includes 290 A320 Family aircraft and 10 A350 wide-body jets, Airbus said in a Monday statement.
It’s worth about €30 billion ($34 billion) catalog prices, Reuters reported French government officials as saying.
Beijing’s deal with the French aircraft manufacturer came as President Xi Jinping visited France and met with President Emmanuel Macron and other EU leaders. Airbus shares rose by 2.7% after the announcement of the deal, Reuters noted.
Read more: This is China’s playbook to pit EU countries against each other
Airbus
Guillaume Faury, Airbus’ president of commercial aircraft and future CEO, said in a statement: "Our expanding footprint in China demonstrates our lasting confidence in the Chinese market, and our long-term commitment to China and our partners."
Chinese airlines operated some 1,730 Airbus aircraft as at the end of January 2019, the manufacturer said. Most of them were A320 Family planes.
Beijing’s "larger-than-expected order" on Monday, as characterized by Reuters, came as the country visibly lost confidence in Boeing 737 Max 8 aircraft.
Boeing and Airbus are traditional rivals in the plane manufacturing industry, and the A320 and 737 models have similar passenger capacities.
Read more: How Airbus became Boeing’s greatest rival
Airbus
The Civil Aviation Administration of China (CAAC) suspended airworthiness certificates for the 737 Max 8 on Tuesday, citing ongoing investigations and uncertainties around the plane’s design problem and software modification, Bloomberg reported.
Airworthiness certificates are licensed by national aviation authorities for commercial passenger or cargo planes.
The CAAC went as far as halting applications for the certificates, Reuters reported on Tuesday, citing a regulator at the agency. It will resume certification after further review of the jet, Bloomberg said.
Two Boeing 737 Max 8 planes crashed within five months each other, resulting in dozens of countries around the world grounding the model of the jet.
Read more: Boeing reportedly pushed engineers to develop 737 Max at twice the normal pace
REUTERS/Baz Ratner
Lion Air Flight 610 crashed in October 2018, killing all 189 people on board. Ethiopian Airlines Flight 302 crashed on March 10, killing all 157 people on board.
While investigations into the two crashes remain ongoing, authorities have identified multiple similarities between the two disasters, including the possible involvement of the jet’s Maneuvering Characteristics Augmentation System (MCAS), which points an aircraft’s nose downward if the plane is flying at too steep an incline.
Boeing is reportedly close to completing a software update for its 737 Max jets, which the manufacturer will give airlines for free.
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See Also:
- One airline has attempted to cancel its order for Boeing’s 737 Max 8. Here’s why it would be difficult for other airlines to do the same.
- Indonesia’s flagship airline moves to cancel $5 billion order for 49 Boeing 737 Max 8 jets after deadly crashes
- DOJ has reportedly subpoenaed Boeing as part of a criminal investigation involving the 737 Max
READ MORE: Boeing’s 737 Max crisis could have a bigger effect on the US economy than the government shutdown
Source: Business Insider – ama@businessinsider.com (Alexandra Ma)