A blow to Boeing -- China orders $14.8 billion in Airbus planes

Posted Nov 26th 2007 4:30AM by Douglas McIntyre
Filed under: Deals, Competitive Strategy, China, Boeing Co (BA)

Airbus hit the jackpot in China. Airlines in the country have ordered 160 A320 and A330 planes worth $14.8 billion, according to The Wall Street Journal. Boeing (NYSE: BA) has dominated aircraft sales in the big Asian country, so the announcement is a blow to its fortunes in the region.

But the fix was in from the beginning. Airbus will be assembling many of its planes in the Chinese city of Tianjian. So, there was more than a little back-scratching going on.

And so it goes with China. With a central government that can effectively control purchases by its domestic airlines, the leverage with Airbus was tremendous. The European company has very little of the market, so why not trade new manufacturing jobs for a large slug of aircraft orders.

Boeing does not appear to be likely to assemble its planes in China. Perhaps it is the quality control problems with lead-tainted toys. But, no matter, the US company does not have as much to trade for new business.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: Airbus, ba, boeing, inthenews