China Signs Order for 150 Airbus A320s, Agreement on Final Assembly Line

China signed an order Thursday with Airbus Industrie for 150 mid-size A320 planes as the European aircraft maker took a major step toward opening its first Chinese assembly line.

The Airbus sale was among a series of business deals signed as French President Jacques Chirac began a state visit to China.

Airbus CEO Louis Gallois told reporters the 150 A320s would be assembled in China and delivered in 2009-12. No details on price or which airlines would receive them were released. The order would be worth some US$10 billion (euro8 billion) at list prices, but such large purchases usually receive deep discounts.

Airbus signed a framework agreement with a group of Chinese aerospace companies to operate a final assembly line for the A320 in the eastern Chinese city of Tianjin.

The final assembly line, Airbus' first outside Europe, was approved by Beijing in June, but negotiations continued into Wednesday, said Lindsey Li, an Airbus spokeswoman.

Final points included the management structure, salary issues and how many staff would come from Airbus and from its Chinese partners, Li said.

"Things like this have to be discussed one by one," she said, without giving further details.

The A320 orders are a boost for Airbus in China at a time when it is struggling over management changes, cost-cutting and delays to its A380 super-jumbo jet project.

The company has pushed back deliveries of A380s by two years, citing wiring problems and other delays.

Singapore Airlines, which was due to become the first carrier to take delivery of an A380 in December, says it now expects to receive the first in the final quarter of next year.

The delays frustrated airlines that were counting on using jumbos for heavily traveled routes.

The Airbus final assembly line is due to begin production in early 2009, using sub-assemblies sent from European factories. Airbus says it wants production to rise to four aircraft per month by 2011.

Toulose, France-based Airbus opened an engineering center in July 2005 in Beijing, where it also has a training and support.

China on Thursday also signed a letter of intent to purchase 20 of Airbus's planned larger A350, which is still on the drawing board, but a firm decision is to be made later.

Airbus and its American rival, Boeing Co., are looking to China to drive sales as the country's airline travel booms at a time when growth in other markets is slowing.

In a report released Wednesday, Boeing said China will be the world's fastest-growing aircraft market over the next two decades, with airlines buying 2,900 new planes worth US$280 billion.


AP Business Writer Laurence Frost in Paris contributed to this report.

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