Airbus Shares Climb Amid Reports of Large Chinese Airline Orders

Airbus Shares Surge on Prospective Chinese Airline Orders

Airbus experienced a notable increase in its share price, rising over 3% on Wednesday, following reports that several Chinese airlines are contemplating substantial aircraft purchases from the European manufacturer. According to Bloomberg, the potential deal could encompass between 200 and 500 narrow-body and wide-body aircraft. Discussions are expected to advance during an upcoming visit by European leaders to Beijing, possibly resulting in an order as early as next month. However, negotiations remain fluid and could either extend over a longer period or fail to materialize.

When approached for comment by Business Insider, Airbus declined to confirm or deny the Bloomberg report.

Geopolitical Context and Aviation Industry Implications

The prospective orders emerge against a backdrop of escalating tensions between China and the United States, largely stemming from tariff policies introduced during the Trump administration. These tariffs have had a significant impact on the aviation sector, with potential adverse effects on both countries’ industries, while potentially benefiting Airbus as a European competitor.

In April, China returned several Boeing aircraft that were awaiting official delivery. Boeing CEO Kelly Ortberg informed CNBC that three planes had been sent back to the United States. During a recent earnings call, he revealed plans to remarket approximately 50 aircraft to other airlines. Despite these challenges, Boeing’s substantial backlog suggests it will likely find alternative buyers, which may mitigate the impact of lost sales to China and provide Airbus with a competitive edge.

China’s Aviation Market and Domestic Manufacturing Ambitions

Airbus projects that by 2043, China will become the world’s largest aviation market, accounting for 20% of all aircraft deliveries globally. Meanwhile, China’s domestic manufacturer, Comac, delivered 13 C919 jets to Chinese airlines last year and currently holds a backlog exceeding 1,000 orders. However, Comac’s efforts to disrupt the longstanding Airbus-Boeing duopoly have been hindered by tariffs and supply chain dependencies.

A Bank of America report from April highlighted that the C919 relies heavily on foreign suppliers, with 48 major components sourced from the United States, 26 from Europe, and only 14 from China. The report warned that if China ceases purchasing aircraft components from the US, the C919 program could face severe setbacks or even termination.

Recent Policy Developments and Diplomatic Engagements

Last week, the Trump administration imposed restrictions on sales of certain technologies to China, including those related to jet engine manufacturing. Although tariffs have eased from their peak of 145%, ongoing geopolitical frictions make it strategically sensible for China to strengthen ties with European manufacturers such as Airbus.

During his visit to France last month, China’s Vice Premier He Lifeng emphasized the importance of maintaining an open and cooperative international economic and trade environment. In a government press release, He expressed a desire to deepen collaboration with France, underscoring the significance of multilateral engagement amid global uncertainties.