China Orders 150 Airbus Planes Valued at $10 Billion

Airbus, the world’s largest commercial plane maker, won an order Monday from China for 150 aircraft valued at almost $10 billion as the European company tried to catch up with U.S. competitor Boeing Co. in new business this year.

China plans to buy A320 single-aisle planes, Premier Wen Jiabao said in Paris. Airbus said that the order was its largest ever from China and that the planes would be allocated to six Chinese airlines.

The European plane maker said after Wen’s visit to its factory in Toulouse, France, that it might open an assembly line in China. Air China and the country’s other airlines may need 1,790 planes worth $230 billion by 2023, Airbus estimates. Boeing on Nov. 20 won a $4-billion order from China for 70 planes.

“China will be the most important market for years to come,” said Salah Seddik, a fund manager at Richelieu Finance in Paris, which oversees the equivalent of $4.7 billion, including shares of European Aeronautic, Defense & Space Co., which controls Airbus.

The plane order will bring Airbus closer to matching Boeing in new business this year. Airbus had booked 494 firm orders through Oct. 31, lagging behind Boeing’s 800 as of Nov. 30, according to information from the manufacturers.

The twin-engine jets on order, which include smaller and larger versions of the A320 known as the A318, A319 and A321, will go to China Southern Airlines Co., Air China, China Eastern Air Holding Co. and three regional Chinese airlines.

Boeing says it will beat Airbus in orders in 2005, the first time in five years.

China, the world’s most populous nation, with 100 million tourists expected to venture abroad every year by 2020, is a market Airbus and Boeing are counting on for new orders.

Airbus also said Sunday that procurement from Chinese subcontractors was expected to increase fourfold to $60 million by 2007 from last year and to $120 million by 2010. Boeing, which began selling planes to Chinese airlines in 1982, 13 years earlier than Airbus, said it planned to buy a combined $1.3 billion worth of parts in China by the end of 2010.

Airbus didn’t provide specifics on when an assembly line might be set up or what conditions must be met for an agreement to be reached. Airbus and Chinese officials expect to make a decision after discussing options over the next six months.

Airbus is currently producing 28 A320s a month and is increasing production to 32 a month by 2007. Airbus doesn’t have the capacity to move beyond that level with existing assembly lines.

Six Chinese companies already make landing gear and other components for Airbus A320 planes.