Boeing Co has signed deals to sell 300 aircraft to three Chinese firms and set up an aircraft plant in China, becoming the first U.S. firm to clinch a business tie-up in the country since Chinese president Xi Jinping began a U.S. state visit, the official Xinhua news agency said.
The aircraft deals, potentially worth tens of billions of dollars in total, are collectively the largest order the aerospace firm has received from Chinese companies.
China’s ICBC Financial Leasing Co, a unit of the Industrial and Commercial Bank of China, on Wednesday separately confirmed it will buy 30 of Boeing’s 737-800 jets, worth $2.88 billion at list prices.
China Aviation Supplies Holding Company and China Development Bank Leasing are the other two customers for the aircraft, said Xinhua.
Boeing, which is locked in a fierce battle for plane orders with European rival Airbus, will build its first aircraft completion plant outside the United States in China in order to gain a foothold in that important market, say industry observers. Boeing raised its forecast for China’s aircraft demand by 5 percent in August, saying that the country will need 6,330 planes over the next 20 years.
It signed a cooperation document with Commercial Aircraft Corporation of China (Comac) to build the aircraft completion center for its 737 passenger jet in China, added Xinhua. The agency didn’t disclose further details.
An aircraft’s interiors and some systems are usually installed, and the plane is painted in the customer’s livery, at completion centers. The final flight trials are then completed before the aircraft is delivered to the customer.
Boeing executives and officials from the Chinese firms could not immediately be reached for comment. Xi, who arrived in Seattle on Tuesday, is set to visit Boeing on Wednesday.
The number of air passengers traveling to, from and within China is set to nearly triple by 2034 to some 1.3 billion, surpassing an expected 1.2 billion for the United States, according to official estimates.
State-owned airlines like Air China, China Eastern Airlines and China Southern Airlines, and privately-owned budget carrier Spring Airlines, are growing fast and adding new planes to meet this demand for both short and long haul air travel.
Boeing’s plans for an aircraft completion center comes after Airbus signed an agreement in July to set up its second Chinese plant.