Call it diplomacy at 38,000 feet above sea level, but it looks like a likely deal of 500 Boeing aircraft could hold the key to thawing the relationship between the United States and China.
On Thursday, Bloomberg reported that Boeing was closer to finalising a deal with China to sell as many as 500 aircraft. The report was based on interviews with people familiar with the matter.
Since buying 300 single-aisle and twin-aisle planes for a total of US$37 billion during President Donald Trump’s last visit to the country in 2017, Boeing has only sold 30 in the mainland, with France’s Airbus dominating the orders.
China was among the first countries to ground its entire fleet of 737 Max after two fatal crashes, and Airbus has dominated sales and deliveries to China since then. Recent Cirium data shows that Airbus has 2,326 in-service and stored Airbus aircraft, compared to 1,874 Boeing aircraft.
The Bloomberg report said the two sides “are still hammering out terms of the complex aircraft sale, including the types and volume of jet models and delivery timetables”, according to one of its sources.
The sources added that the Chinese officials have already started consulting domestic airlines about how many Boeing aircraft they’d need and that the likely transaction will be similar in scope to a previous order to Airbus for as many as 500 jets by China’s central planner.
The mega sale to China is years in the making, but the sources cautioned that it is contingent on the two nations defusing the trade hostilities that go back to Trump’s first term in office – and could still fall apart.
Aircraft orders for Boeing have figured large in US diplomacy since Trump returned to the White House in January, and the Boeing order is expected to be the centerpiece of a trade agreement that would benefit both Trump and China’s President Xi Jinping, following the long-running and sometimes contentious negotiations between the two countries.
Boeing declined to comment on any potential deal. The company’s stock was down by half a per cent to US$224.46 on a day when both Dow Jones Industrial Average and the S&P 500 fell.
