China signs deal with Germany for 130 Airbus jets

Thu Oct 29, 2015 5:02am EDT
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By Andreas Rinke

BEIJING (Reuters) - China and Germany signed a deal on Thursday that will see Chinese airlines buy 130 jets manufactured by Airbus Group SE (AIR.PA: Quote), sending shares in the European planemaker higher.

The order, valued at $17 billion, was announced after Germany's Chancellor Angela Merkel met China's Premier Li Keqiang in Beijing.

Shares in Airbus, the world's second-largest aerospace company behind Boeing Co (BA.N: Quote), were up 2 percent at 60.87 euros by 0845 GMT.

Airbus is battling its U.S. rival for dominance of the Chinese market, which Boeing estimates is worth $1 trillion over the next two decades.

Air China Ltd (0753.HK: Quote) and other Chinese carriers are expanding fleets as the number of passengers traveling within China and overseas is set to triple over the next two decades.

To help secure more orders in China Airbus agreed in July to build a 150 million-euro completion center for A330 wide-body jets in Tianjin where it has already been assembling A320 narrow-body planes sold mostly to Chinese airlines.

Thursday's deal includes a firm order for 30 A330 jets, on which China had already taken an option in June.

The order allays fears that production of the wide-body jet, which faces competition from Boeing's newer 787 Dreamliner, may have to be cut again while Airbus prepares to introduce an upgraded model with new engines to boost sales.   Continued...

Airbus's company logo is pictured at the Airbus headquarters in Toulouse, December 4, 2014.  REUTERS/ Regis Duvignau