China has tested and will start to produce its own commercial aircraft, which has been viewed as a challenge to Boeing Co. (NYSE: BA) and Airbus. The nation’s long-term plans to create and build its own industry did not stop a deal under which Boeing will sell $37 billion worth of its commercial airplanes to companies in the People’s Republic.
The U.S. aerospace giant’s management announced:
Boeing and China Aviation Suppliers Holding Company (CASC) today signed an agreement for 300 airplanes during a ceremony in Beijing. It was part of the United States trade mission to China, and was signed by Kevin McAllister, Boeing Commercial Airplanes president and CEO, in the presence of US President Donald Trump and China President Xi Jinping.
The agreement includes orders and commitments for 300 Boeing single-aisle and twin-aisle airplanes. The airplanes are valued at more than $37 billion at list prices.
In May, China’s C919 took off for its first flight. It is a twin jet engine, single-aisle aircraft. The plane was built and designed by Commercial Aircraft Corp. of China (Comac), which is owned by the government. Outsiders believe that the government’s plan it to build thousands of commercial planes to elbow Boeing and Airbus out of what is likely to become the world’s largest commercial market.
Either the Chinese government wants to make a show of cooperation with the United States in terms of trade balance, and the Boeing deal is a sign of good faith, or the C919 will not be ready for service for many years. Under one set of circumstances, Boeing is being handed a large bone. Under the other, its future in China is not as bleak as some aviation experts believe.
For the time being, Boeing has received one of the larger orders in its history.