Tianjin Plant Will Supply Planes

Just when you think they're down... Airbus manages to come back in a big way. Earlier speculation that Airbus would receive a big order during French president Jacques Chirac's visit to China was confirmed Thursday... and, as is often the case with Airbus, the numbers are even bigger than originally rumored.

Airbus announced the signing of a 150-frame order for A320-family narrowbody planes from China Aviation Supplies Import and Export Group Corporation (CASGC), the primary aircraft purchaser for the government of China. In a separate agreement, CASGC also signed a letter of intent for 20 A350XWB planes -- a plane which Airbus has not yet formally committed to build.

In any case, the two orders represent the largest single transaction ever performed by Airbus in China... beating last December's megadeal by 20 frames. (And yes, before you ask... this IS a new order, on top of that deal.)

"These commitments are new milestone achievements in the history of the close cooperation between our two companies," said CASGC President Li Hai at the signing ceremony in Beijing. "We are pleased to develop our cooperation with more A320 Family aircraft and we are happy to introduce the Airbus A350XWB Family aircraft, which represents the 21st Century solution for an aircraft in this size category, into China. We believe that more Chinese airlines will select this new generation aircraft for daily operation in the future."

As part of the A320 deal, Airbus also confirmed its intent to build an A320 production facility in China. The factory, located in Tianjin, is expected to deliver its first plane in 2009. The majority -- if not all -- of the Chinese-built aircraft will serve Chinese airlines.

"We are impressed by the fast and sustained growth of the Chinese civil aviation industry and are extremely proud to be able to contribute to its development with our products," said Airbus CEO Louis Gallois. "The fact that more and more Chinese airlines are turning to Airbus aircraft for their daily operations is a clear demonstration that we have the right products to be part of it. We look forward to further expanding our cooperation with CASGC and the Chinese airlines."

Airbus is the first airplane manufacturer to locate a plant in China since McDonnell Douglas operated a plant there for close to 20 years, before ultimately folding up shop in the mid-90s. The facility produced variants of the DC-9... a plane whose legacy continues to live on today, in the upcoming China-built ARJ-21 regional plane.

The latest A320 order brings Airbus' order book for 2006 to approximately 500 frames -- well over double what Airbus had reported by June this year, although still over 200 planes short of Boeing's order book to date. But there's still a lot of time left before the year is out... and as Airbus as shown before, the European planemaker loves come-from-behind victories.

Conversely... in the past, China has opted to spread the wealth between Airbus and its American rival, Boeing in its large plane orders, so as not to offend either planemaker. Could we soon see an equally-large order for Boeing planes, as well?

Stay tuned... this ain't over yet.

FMI: www.airbus.com