Boeing signs deal to sell 300 planes worth $37 billion to China
Nov 12 2017
They included a $1.4 billion agreement for GEnx engines for 10 B-787-9 Dreamliners, signed with Juneyao Airlines Co Ltd (603885.SS) and ICBC Leasing, the leasing arm of state bank Industrial and Commercial Bank of China Ltd (601398.SS).
China Aviation Supplies Holiday Company, the state-owned firm which does big orders for local airlines, signed the deal during a ceremony today, as part of the U.S. trade mission to China, and was signed by Kevin McAllister, Boeing commercial airplanes president and chief executive.
Boeing said the agreement includes orders and commitments for 300 single- and twin-aisle aircraft, although the manufacturer did not specify aircraft types. The breakdown between firm orders and non-binding commitments was not immediately available. The agreement was signed by Kevin McAllister, Boeing Commercial Airplanes president and CEO, in the presence of Trump and Chinese President Xi Jinping. However, Reuters reports that it is not clear how many planes will be new business, as the deal may also cover 334 orders from undisclosed customers that purchased aircraft during this year.
Aircraft orders contain list prices however buyers are usually given discounts that end up significantly lowering the prices.
This past July, the company announced it agreed to purchase 140 Airbus aircraft in a deal that had list prices that totaled $23 billion. Currently, China's aircraft fleets from all its airline companies are split between Boeing and Airbus jets.
According to Boeing's latest market outlook, China is expected to need 7,240 new aircraft over the next 20 years, valued at almost 1.1 trillion USA dollars.
This is not the first time China Aviation Supplies has been involved with large deals during previous government exchanges. In 2015, it was one of the three Chinese companies that agreed to buy 300 planes from Boeing when President Xi was in the United States.
The new order is for 40 Boeing 777s and 787s, and 260 737s.