Boeing 7E7 contracts go to China

Boeing Co, which is counting on its new 7E7 aircraft to catch up with Airbus SAS, said it has awarded contracts to two Chinese companies to produce parts for the new jetliner.

The world's second-largest maker of commercial aircraft signed a memorandum of understanding with Chengdu Aircraft Industrial Co to make rudders for the 7E7.

Hafei Aviation Industry Co will make metallic and composite parts.

The contracts are worth "hundreds of millions of dollars," Boeing said in a press statement, declining to give specific figures.

Airbus and Boeing are trying to increase sales in China, the world's fastest-growing aviation market.

The Chicago-based plane maker is betting that awarding contracts to Chinese companies will persuade the country's government-owned airlines to choose its planes over Airbus, which last year overtook Boeing in plane deliveries for the first time.

"We are in good discussions with Chinese airlines and it is our hope that we will have solid orders from them this year," said Jim Morris, Boeing's senior manager of supplier management, in the statement.

China's passenger traffic is forecast to rise 20 percent this year to 103.8 million people, according to the International Air Transport Association.

As much as 35 percent of the structure of the so-called "Dreamliner" aircraft will be made by Japanese companies, including Mitsubishi Heavy Industries Ltd, Kawasaki Heavy Industries Ltd and Fuji Heavy Industries Ltd.

Boeing, the biggest supplier of civilian aircraft to Japan Airlines System Corp and All Nippon Airways Co, won a US$6 billion order for 50 planes from All Nippon Airways Co, its first for the new plane.

Toray Industries Inc, the world's biggest maker of synthetic fibers, last month received a ?330 billion (US$2.9 billion) contract to supply carbon fiber material over 18 years for making the 7E7's wings.

Chengdu Aircraft is an affiliate of China Aviation Industry Corp (AVIC I). Hafei is an affiliate of China Aviation Industry Corp.

"Chengdu Aircraft and Hafei represent the talent, technological capability and resources of China's aviation industry that Boeing needs to provide the best value to our airline customers," Morris said.

Chinese parts makers already provide parts for Boeing's 717, 737 and 757 models.

"This is the first time for AVIC I to participate in an airline program from the beginning," said Yang Yuzhong, executive vice president of AVIC I. "This shows we are growing fast" in the industry.