Airbus Said to Consider Making Newest Jet in China to Win Orders
(Bloomberg) -- Airbus SE is looking at assembling its newest A330neo wide-body jet in China as part of a bid to win orders for the plane in one of the world's fastest-growing aviation markets, according to people with knowledge of the matter.
Airbus may expand its existing plant in Tianjin to accommodate the model, but a decision hasn't been made with the business case yet to be established, said the people, who asked not to be named because the discussions are private. The plan may not go ahead, they cautioned. A spokesman for Airbus declined to comment.
Airbus previously offered to build its A380 superjumbo in China in exchange for orders from the country's airlines, but that pitch was rejected amid concerns about the double-decker plane's suitability for the local market, according to two of the people. The smaller, more fuel-efficient A330neo is potentially a better fit, with more than 200 of the original-generation model already sold in the Asian nation.
Building wide-body jets in China would boost Airbus's challenge to Boeing Co., which opened a so-called completion center near Shanghai last year but has so far held off from assembling planes in the country. Manufacturers face a balancing act in transferring technology to China, which is set to become the world's biggest aviation market next decade but is also seeking to build up its own know-how as a prelude to challenging Western dominance in aerospace production.
Airbus's move to extend the Tianjin plant -- which currently assembles the single-aisle A320 workhorse -- comes as Rolls-Royce Holdings Plc is said to be offering to establish a Chinese plant to secure a deal to supply engines for the wide-body plane being developed by Commercial Aircraft Corp. of China Ltd., or Comac. The U.K. manufacturer is pitching a derivative of the Trent 7000 turbine for that aircraft, which is also the only option on the A330neo.
Rolls-Royce Said to Offer China Engine Plant to Win Deal on Jet
Biggest Market
China will need almost 8,000 aircraft worth $1.2 trillion over 20 years, according to Boeing estimates. President Xi Jinping has also earmarked aerospace as a priority industry, encouraging foreign producers to set up shop in the country, though both the U.S. company and Airbus are still a long way from offering the kind of expertise found at their factories in Seattle and Toulouse, France.
The assembly plant for the A330neo -- abbreviated from new engine option -- would add to an existing completion and delivery center for Airbus' original A330, where planes get final touches before being shipped to the customers.
The upgraded aircraft entered service last year but has been battling for orders with Boeing's more advanced 787 Dreamliner. Airbus has secured sales for 230 A330-900s but just eight smaller -800s, losing contracts from Hawaiian Airlines Inc. and American Airlines Group Inc. along the way as they switched to the Boeing aircraft.
Toulouse, France-based Airbus has since won a 40-jet deal from Emirates, though only after the Dubai carrier canceled the bulk of its orders for the A380, which Airbus announced earlier this month was being wound up. The company is also targeting a follow-on contract for 44 planes from Malaysia's AirAsia that was announced but never signed.
To contact Bloomberg News staff for this story: Haze Fan in Beijing at hfan40@bloomberg.net;Dong Lyu in Beijing at dlyu3@bloomberg.net;Benjamin Katz in London at bkatz38@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, ;Anand Krishnamoorthy at anandk@bloomberg.net, Christopher Jasper, Frank Connelly
©2019 Bloomberg L.P.
With assistance from Bloomberg
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