China signs deal for 70 Airbus SAS aircraft

Orders announced by Xi, Hollande on sidelines of presidential meeting

Airbus SAS received 70 aircraft orders from China during Chinese President Xi Jinping's visit to France on Wednesday, but the orders varied in both number and aircraft types from earlier speculation.

The orders include 27 A330 wide-body and 43 A320 family aircraft, Airbus' most popular narrow-bodied planes.

The fewer wide-body orders did not stop Airbus' cooperation with China on its wide-body program.

"Airbus and relevant Chinese parties will work toward demonstrating an interest in setting up a wide-body aircraft completion center in China that will include cooperation on wide-body cabin interiors with AVIC," Airbus said in a statement.

It will be the first time Airbus and Chinese companies cooperate on completing wide-bodied aircraft with customized interiors delivered to customers from China, but whether the program will become a regular one will be determined by the number of Airbus' wide-body planes flying in China.

The total value of the new orders is about $10.2 billion, according to the aircraft's catalog price.

The purchase agreement was signed by China Aviation Supplies Holding Co. It did not reveal which airlines the new aircraft will go to.

However, it was reported earlier that China would purchase many more planes from Airbus, especially more wide-body A330s.

The number would be at least 150 and cost $20 billion, Reuters reported earlier this month. A report from Aviation Week said the orders might be at most 200 A330 jetliners.

The approved order number shows that the fast expansion of China's civil aviation industry is turning from quantity growth into quality development, some experts said.

"China's aviation industry emphasizes quality currently, including punctuality," said Li Xiaojin, a professor at the Civil Aviation University of China.

More aircraft means busier aerospace, Li said, and that is why the government is limiting the growth of the fleet.

The orders and cooperation agreements signed by Airbus and China indicate the Chinese government is being practical about the aviation trade, he added.

Witnessed by French President Francois Hollande and President Xi, Airbus also signed agreements with Chinese parties to enhance their cooperation from final assembly line to air traffic management.

According to the agreements, Airbus and its Chinese partners Tianjin Free Trade Zone and AVIC have agreed to extend the successful joint venture to assemble A320 family aircraft in China for an additional 10 years from 2016 to 2025.

The final assembly line will expand deliveries to the whole Asian region and assemble the A320neo family from 2017 because its capabilities will be extended.

Airbus and the Chinese parties will jointly invite more major component suppliers to develop industrial projects in Tianjin in order to support the the formation of a competitive supply chain.

On the other side, Airbus Helicopters, formerly Eurocopter, also signed a joint agreement with China's Avicopter, the helicopter business unit of AVIC, for the production of 1,000 new-generation EC175/AC352 rotorcraft on Wednesday.

The EC175/AC352 rotorcraft is an equal share program between China and France from 2005 and the production is also shared equally, combining the capabilities of both companies.

"The production contract's signature will allow both of us to satisfy the Chinese and worldwide market needs in the medium helicopter segment," added Li Fangyong, AVIC executive vice-president. "This also puts Avicopter's production resources to work in the aviation industry's global industrial chain."

The AC532 and EC175 come from a common platform, but the AC352 is assembled and supported by Avicopter mainly for the Chinese market, while the EC173 is assembled by Airbus Helicopters for the worldwide market.

Initial deliveries to its first three EC175 customers are planned by Airbus Helicopters later this year.