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Airbus Pushes Past Boeing With $14.8 Billion Order

Deal to sell 160 passenger jets to China stands to push the European plane maker past Boeing in total commercial aircraft orders this year.

BEIJING (AP) β€” Airbus said it signed contracts Monday to sell 160 passenger jets worth around US$14.8 billion (euro10 billion) to China in a deal that stands to push the European plane maker past archrival Boeing in total commercial aircraft orders this year.
Planes ordered include 110 of the company's A320 jets and 50 of the slightly larger A330 planes, Airbus officials said in Beijing, where they were accompanying French President Nicolas Sarkozy on his first state visit to the Asian trading giant.
Airbus and Chinese partners this summer signed an agreement to produce A320s in China in anticipation of large Chinese orders for the popular single aisle jet that seats 150 or more passengers. Size-wise, the plane is well suited for Chinese domestic routes expected to show strong growth in the years ahead as the economy continues to expand.
While one of the company's largest single orders, the deal covers a number of Chinese airlines and the final distribution of the planes wasn't immediately known. China's top three airlines β€” Air China Ltd., China Southern Airlines Co. and China Eastern Airlines Corp. β€” are all-state owned and operate mixed fleets of mainly Airbus and Boeing jets.
China Southern ordered five Airbus A380 superjumbos in 2005, so far the only Chinese orders for the plane.
Decisions on aircraft orders in China are made by cabinet-level officials who typically place large orders timed for maximum political effect.
In a similar move, China last year bought 150 Airbus jets worth over US$9 billion during a visit by Premier Wen Jiabao to France.
Airbus and U.S.-based Boeing Co. predict China will become the world's second-biggest aircraft market after the United States, with airlines buying 1,900 to 2,600 planes over the next two decades.
Monday's order looks to put Airbus ahead of Chicago-based Boeing for the year.
Boeing said last week it had received 1,047 commercial airplane orders this year, already beating its 2006 record-setting total of 1,044 orders with more than a month to go. Airbus had logged 1,021 commercial jet orders as of the end of October, the most recent data available on the company's Web site.
Airbus has agreed to assemble planes in China, a move that is seen as part of a long-term strategy to win a greater share of the Chinese market that for years was dominated by Boeing.
Its final assembly line in the Chinese city of Tianjin is due to deliver its first aircraft in early 2009. The plant is expected to be able to produce four A320s a month by 2011 and a total of about 300 A320 planes by 2016.
''Airbus certainly did not hurt its marketability in China when it pledged to construct an A320 final assembly plant in Tianjin,'' said Richard Pinkham, a Singapore-based analyst for the Center for Asia Pacific Aviation.
The exact price tag for the huge purchase was not immediately clear. Louis Gallois, chief executive of European Aeronautic Defence & Space Co. NV, the owner of Airbus, said he ''had not calculated it.''
French officials speaking on condition of anonymity said the deal totaled about US$14.8 billion (euro10 billion). Other Airbus officials said the list price of the planes came to about US$17 billion (euro11.48 billion), although such large scale ordes usually include deep discounts and other pricing incentives.
The deal is welcome news to Airbus, which has struggled with a decline in the U.S. dollar and delays with its A400M military transport aircraft and the A380 superjumbo that has wiped billions of euros off EADS' profit.
Earlier this month, Gallois said the company needed to find an extra 1 billion euros ($1.46 billion) in cost savings after the planemaker and its parent company announced third-quarter losses.
The dollar's drop to record lows against the euro also makes it harder for Airbus to compete against Boeing Co., because while it sells its planes in dollars, many of its costs are in euros.
Associated Press writer Nathalie Schuck contributed to this story.
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