Global General

France eyes major Airbus deal at China summit

(Agencies)
Updated: 2010-11-03 09:25

PARIS - European planemaker Airbus is in negotiations that could lead to the sale of around 100 passenger planes to China during a November 4-5 visit to France by President Hu Jintao, sources familiar with the matter said. The potential $10 billion deal dominates a list of contracts sought by French-based companies in a week which could also see preliminary contacts between China and Dassault Aviation over co-operation in business jets, the sources said.

EADS subsidiary Airbus declined to comment on the prospect of an aircraft deal to mark the summit.

"The summit is a political event between governments. Airbus is a corporate company," a spokesman said on Tuesday. "As a principle we never comment on negotiations with our customers."

Sources familiar with the matter said there have been intense negotiations in the days leading up to the summit, reflected in a wide range of estimates of the number of planes involved, which would depend in turn on narrowing differences over price.

One source said the number of planes to be pencilled into a final batch of economic agreements set to be announced on Thursday ranged anywhere from zero to the "usual range."

That phrase is a reference to deals involving about 150 aircraft each struck at two previous state visits to China by President Nicolas Sarkozy and his predecessor Jacques Chirac.

Airbus's arch-rival Boeing grabbed a similar deal during a visit by former President George Bush, with big-ticket orders often described as a tool to maintain balanced relations.

CHINA GROWTH

Boeing predicted on Tuesday China would triple its airplane fleet size over the next 20 years, adding 4,330 new planes worth $480 billion.

The US planemaker is betting that new Chinese wealth and government spending on infrastructure will bolster travel in the country, where the domestic passenger traffic is estimated to grow an average of 7.9 percent annually.

Airbus has so far assembled 32 A320 single-aisle planes there including 21 in 2010, a spokesman said. It now produces two planes a month and aims to double this by the end of 2011.

While scooping up aircraft, China is challenging both Airbus and Boeing with plans to build its own passenger jets.

State-backed Commercial Aircraft Corporation of China (COMAC) is developing its own single-aisle C919 jet in an effort to challenge the Airbus A320 and Boeing 737 models from 2016.

French companies hope Hu's visit will yield more interest in parts for the C919 after COMAC agreed to buy French-American engines made by Safran and General Electric.

A Chinese delegation was also expected to visit Dassault Aviation's Paris headquarters this week to talk about co-operation in business jets, but there were no immediate signs of a concrete deal, sources familiar with the matter said.