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Airbus delivers 1st China-made plane; to raise output

(Agencies)
Updated: 2009-06-23 16:07

Airbus SAS, the world's largest commercial planemaker, rolled out the first aircraft assembled at its China factory as it seeks to win more orders in the world's second-largest aviation market.

The first China-assembled A320 Airbus jet is on display at the Airbus Tianjin plant in Tianjin municipality June 23, 2009. [Xinhua]

The planemaker aims to deliver 10 more A320s this year from its factory at Tianjin, near Beijing, it said in a statement today. Production will be raised to four aircraft a month by the end of 2011 at the plant, Airbus's first outside Europe.

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Airbus is competing with Boeing Co. to grab orders in China, counting on sales in emerging markets to help offset slumping demand in the US and Europe. China will probably need 3,238 passenger planes valued at $391.2 billion from 2007 to 2026, according to the Toulouse, France-based planemaker.

"A factory in China is a plus for Airbus, but lower prices are still critical to get new orders in the future," said Li Lei, an analyst at China Securities Co. in Beijing. "The narrow-body A320 is catering to the rising domestic air travel market."

Airbus is due to deliver 70 A320s to China this year, so some will come from France, said Laurence Barron, Airbus's China president. The five A380s ordered by China Southern Airlines Co. are on track for delivery by 2011.

"The ramp-up capacity of 48 planes a year is insufficient to meet demand," Barron said. "China is doing well domestically."

Domestic Demand

Domestic air passenger numbers rose 17 percent to 56.9 million in the first four months, while traffic on international routes fell 17 percent to 5.6 million, according to the Civil Aviation Administration of China. Air passenger numbers rose an average 16 percent in the past 30 years to 190 million through 2008.

China aims to boost travel to 700 million trips annually in 2020, Li Jiaxiang, director of the Civil Aviation Administration of China, said on April 8.

Airbus won a $17 billion order for 160 planes in November 2007, following two $10 billion deals for 150 aircraft in 2005 and 2006. Boeing's last big Chinese order, in 2005, was worth as much as $9 billion.

Airbus and Boeing are dueling this year to save jet orders as airlines park planes. Chicago-based Boeing collected zero net orders in the first five months of the year as 65 purchase agreements were countered by an equal number of cancellations. Airbus had 11 net orders after 21 were dropped.

That compares with a combined 884 agreements in the same period a year ago, the end of a four-year buying spree in which airlines rushed to land more fuel-efficient jets amid surging oil prices.

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