Boeing is close to finalizing a deal to sell 500 aircraft to China, ending a period of low sales that started in 2017.
The two parties are currently negotiating the details of the intricate aircraft sale, such as the variety and quantity of jet models, as well as the timing of deliveries, as reported by an anonymous source.
The extensive sale event planned for China hinges on resolving long-standing trade conflicts between the two nations since Trump’s initial presidency, which remains uncertain to succeed, according to sources.
Chinese officials have started discussing with national airlines the number of Boeing planes they will require, according to sources. The deal in progress is comparable in scale to the potential purchase of up to 500 aircraft that China’s central planners recently negotiated with Airbus SE but have not yet made public.
Advantages of selling
The Boeing request is an essential component of a business deal that would be advantageous to both Trump and the Chinese president, Xi Jinping, after lengthy and occasionally contentious negotiations.
The country’s leaders were on the verge of making a similar declaration in 2023, but President Joe Biden and Xi departed from a building in San Francisco without being aware of the aircraft’s sale.
Boeing faces added complexity with a lack of leadership in China, as Alvin Liu, the company’s chief executive in the region with strong government connections, departed recently.
Carol Shen has been named as the temporary president of Boeing China, according to sources familiar with the matter.
Boeing declined to provide any comments regarding potential agreements or management alterations.
The American aircraft manufacturer’s stock rose by less than 1% in New York on Thursday, while the majority of Dow Jones Industrial Average index companies saw declines.
The stocks increased by 27% this year as a result of a resurgence overseen by CEO Kelly Ortberg.
Boeing orders
Boeing’s airplane orders have been a significant focus of American diplomacy since Trump resumed office in January. Countries are initiating new and revising existing agreements for aircraft, which are comparable in cost to skyscrapers, in efforts to address trade imbalances with the US.
The US and China have held multiple discussions following the decrease in retaliatory tariffs, which were as high as 145%, but they have not yet finalized a trade deal.
Xi extended an invitation to Trump to visit China, with a chance for them to meet in late October, prior to the Asia Pacific Economic Cooperation Summit in South Korea.
China needs the agreement to secure aircraft delivery slots that are scarce with both Boeing and Airbus, as they are already largely booked up until the 2030s. The country, which is the world’s second-largest aviation market, aims to expand its commercial fleet to 9,755 aircraft in the next two decades, according to Boeing’s projections, a number that exceeds the manufacturing capacity of the Chinese aircraft maker Comac.
Boeing may have some room to adjust its delivery schedule for important clients, according to Jefferies analyst Sheila Kahyaoglu.
Flights to China
The National Development and Reform Commission, China’s top economic planning agency, has asked Chinese airlines for their input on the number of jets they desire.
Beijing is laying the groundwork for a significant order by concentrating negotiations on the 737 Max aircraft series, which is a well-liked Boeing aircraft.
Boeing’s most recent agreement with China occurred in November 2017, when Trump made his initial official visit to the country. The deal involved the purchase and commitment of 300 single and double aisle aircraft, amounting to $37 billion.
Boeing’s deliveries in China reached a peak the next year, with a quarter of its aircraft being delivered to mainland China. Since 2019, Airbus has been leading in sales and deliveries to China, following the suspension of 737 Max flights by the country’s regulatory authorities after two deadly accidents.
Boeing has received just 30 orders from Chinese airlines and leasing firms since the beginning of 2019. CEO Ortberg expressed optimism in a January interview with Bloomberg, anticipating that negotiations with Beijing would yield more orders in the coming year.
