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Boeing to Sell 300 Aircraft to China, Announces Plans to Build Completion Plant There

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Boeing to Sell 300 Aircraft to China, Announces Plans to Build Completion Plant There

Boeing to Sell 300 Aircraft to China, Announces Plans to Build Completion Plant There
September 23
17:12 2015

MIAMI— China Aviation Supplies Holding Co., ICBC Financial Leasing and China Development Bank Leasing have agreed with Boeing to acquire 300 aircraft with an estimated value of $38 billion at list prices, and announced plans to build a completion plant in China during the visit of President Xi Jinping to Seattle.

The aircraft purchase deal was completed between the airframer and China Aviation Supplies Holding Company (CASC). Orders and commitments include 240 airplanes for Chinese airlines, including 190 Boeing 737 and 50 widebody aircraft, plus sixty Boeing 737 for leasing firms ICBC and CDB Leasing. Although the variants and types were not specified, industry rumors indicate that the widebody order include the 747-8 Intercontinental, a much needed order to keep production line open after the cancellation of Nippon Cargo Airways and the deferrals from Transaero.

737 Completion and Delivery Center in China

Boeing and Commercial Aircraft Corporation of China, Ltd., (COMAC) will partner to open a facility in China for the interiors completion, paint and delivery of Boeing 737 aircraft to Chinese customers. Boeing, COMAC and Chinese government officials are working toward a final business agreement and will announce the facility’s location and timing of first deliveries at a later date.  Boeing, now building a record 42 737s per month, will increase production to 47 airplanes per month in 2017 and 52 airplanes per month in 2018 to meet strong demand for the 737.

“The new collaboration between Boeing and COMAC will help advance the Chinese commercial transportation market in a better and faster way, and will benefit the development of supporting Chinese industries related to aircraft completion as well as the global growth of China’s civil aviation business” said COMAC’s Vice President Wu Guanghui.

“The 737 will be a cornerstone of the Chinese fleet for years to come, and we look forward to delivering 737s to Chinese customers in China” said Boeing Commercial Airplanes Chief Executive Ray Conner. who prompted to its workers one day ago that the plans would not not come at the expense of U.S. jobs. These discussions are at a sensitive stage, and I appreciate your support as we finalize what I hope will be a win for Boeing, a win for the Puget Sound, and a win for our stakeholders” Conner stated in a mailed memo.

Meanwhile, the District 751 of the International Association of Machinists (IAM) posted in its website “Our members have worked hard to deliver efficiency and innovations, especially on the 737 line, that increased production rates to levels never seen before to make Boeing airplanes more competitive in the market place. In addition, we have sacrificed real benefits worth billions of dollars. We believe all of this, along with tax incentives from Washington State, should have earned our members and our state the right to secure this work.”

This completion plant in China would be the first for Boeing there, but not the first for an American aerospace company. McDonnell Douglas granted a license to the Shanghai Aviation Industrial Corporation to build MD-80s in China. In 1992, McDonnell Douglas inked an agreement with the China National Aero-Technology Import and Export Corporation (CATIC) to produce MD-80 and MD-90 aircraft. However, the agreement came into an end after the merge of McDonnell Douglas with Boeing in 1997.

The presence of a Boeing production plant in China would also match the presence of its European rival Airbus, as both companies are competing to gain a share in one of the most lucrative aircraft markets in the world. According to Boeing, Asia is expected to be the largest travel market in the world, growing at 6.1 percent annually, and has a demand for over 14,000 aircraft in the coming 20 years.

Airbus opened in China its first assembly line outside of Europe in 2008. The Tianjin Assembly Plant currently produces four Airbus A320 per month. Last July, Airbus completed a deal for a second completion plant and delivery center for A330 jetliners. Chinese operators count with about the 15% of Airbus A330 world fleet, equivalent to over 150 aircraft.

 

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