Boeing, Airbus take their fight to China

Boeing Co and Airbus SAS, the world's largest aircraft manufacturers, may revive Chinese plane orders at a Beijing aviation forum this week as travel demand in Asia's fastest-growing economy recovers after the containment of SARS, analysts said.

Planemakers to tap potential in China as airlines elsewhere reduce orders, following the 2001 terrorists attacks on the US and war in Iraq. That led Chicago-based Boeing to cut next year's sales and earnings forecast in July. Airbus and Boeing previously said Chinese airlines may buy between 1,600 and 1,900 passenger planes worth about US$144 billion by 2020.

"China is still going to be looking very strongly at purchasing aircraft," said Hugh Ritchie, managing director of Brisbane-based Aviation Consultants Internation-al. "It's a huge untapped market and they are also going to need aircraft to meet the demand for shipment of cargo."

Chinese Premier Huang Ju or Zeng Peiyan, another vice premier, and the Minister for General Administration of Civil Aviation of China, Yang Yuanyuan, will also attend the show, where they will mingle with David Wang, Boeing's China president, and Airbus Chinese head Guy Mcleod.

The show will last from 17th to the 20th and will be at the Beijing International Exhibition Center.

Mcleod Airbus will be touting the 555-seat A380 jet, which will be the largest commercial aircraft built. Airbus previously said it expects Chinese carriers to buy the plane to operate for the Olympics in China in 2008.

"We'll take the opportunity to promote the A380," Airbus spokesman Gu Ming said. "It's an ideal vehicle for sportsmen, tourists and businessmen during the Olympic games in Beijing in 2008."

McLeod speak about the A380 at a seminar tomorrow and a model of the plane will also be on display during the show, Gu said. Airbus will also show models of its A330 and A319 planes.

ENTER THE RIVAL

Boeing will present its market outlook forecasts for China at the show and will also talk about its newest model, the 7E7, spokesman Ross Ma said.

Boeing also said it plans to buy US$800 million of airplane parts from China by 2010, benefiting from lower labor costs and to tap new aircraft demand. It has so far bought US$500 million worth of parts from Chinese manufacturers, which are used for its 717, 737, 747 and 757 airplanes.

Wang, Boeing's China president, said this month demand for new planes in China is rising, while Airbus also last month said Asian aircraft demand is on the increase.

RECENT DEALS

Toulouse-based Airbus in April signed a contract with China to sell 30 jetliners in a deal worth US$1.89 billion. China Southern Airlines Co, the country's largest carrier, said last month it will buy four Airbus A330-200s. It wasn't specified whether that purchase was part of the April agreement.

Guangzhou-based China Southern will also take delivery of eight single-aisle Boeing 737s in the next two years.

China Eastern Airlines Corp, the nation's No. 3 carrier, will take delivery of seven A320s and three A340-600 long-haul aircraft in the second half of this year. Another 10 Airbus planes will be added to its fleet next year and in 2005.

The number of international passenger numbers to and from China will probably increase by an annual rate of 9.6 percent between last year and 2006, the International Air Transport Association said last year, compared with a worldwide average of 4.3 percent for the same period. The outbreak of SARS earlier this year won't hinder long-term growth, analyst said.