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Boeing signs deal to sell 300 planes worth $37 billion to China

Reuters 

By Alwyn Scott

(Reuters) - Co said it signed an agreement on Thursday to sell 300 planes to Aviation Supplies Holding Company worth $37 billion at list prices, one of several announced during a state visit by U.S. President Donald to

General Electric Co said it had signed jet engine worth $2.5 billion and a $1 billion agreement for power plant equipment and services.

State-run Aviation Supplies, which leases planes to Chinese airlines, said the agreement covered 260 B-737s and 40 B-777s and B-787s. The breakdown between firm orders and non-binding commitments was not immediately available.

Analysts said, however, that some of the orders may be among more than 300 from undisclosed buyers posted this year, and it was not clear how much of the deal was new business.

The new agreement also may overlap substantially with a similar, 300-plane agreement signed during Chinese President Xi Jinping's 2015 visit to the United States..

That deal, valued at $38 billion at the time, included orders and commitments for 190 B-737s and 50 wide-body planes, as well as leases for an additional 60 B-737s.

A spokesman for the planemaker declined to comment on what proportion of the new agreement represented new or existing orders, but it was believed that some of the orders were already in Boeing's backlog. typically lets plane buyers determine what details to reveal about orders.

shares were down 1.4 percent at $260.30.

STRONG DEMAND

says one out of every four jetliners now rolling off its assembly lines is being delivered to Chinese customers, suggesting Chinese demand is strong, despite vagueness about how many actual Chinese orders it has won.

Plane makers also acknowledge a multi-step wooing process with customers such as The government first determines how many airplanes its airlines will need, allowing detailed contract discussions to take place. After talks conclude, the government must give final approval to the contracts before the orders become firm.

Some customers ask to not identify them as buyers even on firm orders, and is typically among those, according to industry experts. had 323 orders by unidentified customers as of Nov. 7, of which 282 were for its 737 narrow body family.

Separately on Thursday, said it had received orders for 42 B-737 MAX jets and 10 B-787-9 Dreamliners from CDB Aviation, a unit of Development Bank Financial Leasing Co . The order was worth $7.4 billion at list prices.

and European rival Airbus have been jostling for market share in China, the world's fastest growing aviation market, with both opening assembly plants in the country.

China's owned aircraft fleet is currently equally split between and Airbus, but going by order book trends, seems to have gained a big lead in terms of the number of aircraft orders from China, said Corrine Png, chief executive of transport research firm Crucial Perspective.

Aviation Supplies has also played a prominent role in announced during previous government exchanges.

In July, it agreed to buy 140 aircraft from Airbus in a deal worth $23 billion at list prices during a visit by Xi to Germany. It also was among three Chinese companies involved in the 2015 order.

Boeing's latest signing in follows an order for 39 wide-body jets from Singapore Airlines last month.

Earlier on Thursday, General Electric said it had signed worth $3.5 billion in

They included a $1.4 billion agreement for GEnx engines for 10 B-787-9 Dreamliners, signed with Juneyao Airlines Co Ltd and ICBC Leasing, the leasing arm of state bank Industrial and Commercial Bank of Ltd.

It also included an order valued at $1.1 billion for 80 LEAP engines made by CFM International, a joint venture between GE and Safran SA of France.

GE's power division also signed a partnership agreement with Datang Group to provide gas- and steam-powered turbines and components, plus services and digital technology for power projects in It valued that deal at $1 billion.

A GE spokesperson said its engine orders were new, and deferred to on how much of aircraft order was new.

(Reporting by Brenda Goh in SHANGHAI, Ben Blanchard and Stella Qiu in BEIJING, Additional reporting by Jamie Freed in SINGAPORE and Alwyn Scott in NEW YORK; Editing by Marguerita Choy and Bernadette Baum)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, November 09 2017. 23:44 IST
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