Shares of US aircraft manufacturer Boeing fell by more than four percent after US President Donald Trump announced that China had agreed to buy 200 Boeing aircraft, which was significantly less than analysts and market expectations.
Trump told Fox News on Thursday that Chinese President Xi Jinping had agreed to order “200 large jets,” but details of the deal, including delivery dates and types of aircraft, have not yet been released.
According to Reuters sources, a much larger package of around 500 Boeing 737 MAX aircraft was discussed before the meeting between Trump and Xi in Beijing, with the possibility of additional orders for the wide-body aircraft after the summit.
After Trump’s statement, Boeing shares fell 4.1 percent in Wall Street trading.
The big Boeing order was one of the key business deals expected during the US-China summit, along with an extension of a fragile trade truce reached last October, when Trump suspended steep tariffs on Chinese goods and China backed off curbs on exports of rare metals vital to global industry.
In parallel, China held talks with the European manufacturer Airbus about a potentially similarly large contract.
From 2005 to 2017, Chinese airlines ordered an average of 127 planes a year from Boeing, while after the deterioration of relations between Washington and Beijing, that number dropped to an average of just six planes a year.
Meanwhile, Airbus has taken a dominant position in the Chinese market, including opening the final assembly line for A320 models in Tianjin.
Analysts estimate that China will need at least 9,000 new passenger planes by 2045, while some experts believe that it could already order up to 1,000 new aircraft to meet the growing demand for air traffic.
Boeing’s last major Chinese order came during Trump’s visit to Beijing in 2017, when the purchase of 300 planes was agreed.
Since then, Boeing has received only 51 new orders from China, mostly for cargo planes.
Experts warn that China often uses large diplomatic meetings to announce aircraft orders that have a political dimension, not just commercial value.
Boeing CEO Kelly Ortberg and GE Aerospace CEO Larry Culp were among US business leaders who accompanied Trump on his visit to China in hopes of closing new deals and resolving outstanding trade disputes.
(Vijesti.ba)
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