Airbus Races to Complete Aircraft Sale to China Before Politics Gets Involved

Beijing is reportedly unhappy with the prospect of an EU tariff on EVs, and is considering retaliatory tariffs on the EU’s aviation industry.

Photo by Daniel Eledut via Unsplash.

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

The commercial aircraft manufacturing industry is a duopoly, and the sky is falling for one half, but geopolitics may dictate how much Airbus can take advantage of Boeing’s epic woes. 

While Boeing skirts disaster, rival Airbus is negotiating a major deal to send more than 100 A330neo aircraft to major Chinese airlines, sources told Bloomberg on Tuesday. But Airbus may be in a race against time as broader trade tensions simmer between Beijing and the European Union.

Up in the Air

China represents a major emerging market for Boeing and Airbus, but thanks to the twin deadly crashes of 737 Max aircraft in 2019, Boeing has effectively been boxed out. In fact, the firm just resumed deliveries to China in January for the first time in nearly five years, just to see Beijing regulators almost immediately flash the red light again amid the company’s current woes.

For French-based Airbus, it’s a massive opportunity. In 2023, Airbus eclipsed Boeing’s global deliveries for the fifth straight year, shipping 735 aircraft compared to Boeing’s 528. Now, roughly two years since its last major sale to Chinese airlines, Airbus is looking to widen its global lead — so long as EU and Chinese leaders can continue to play nice:

  • The EU’s antitrust regulators have been investigating China’s booming, and subsidy-rich, electric vehicles industry, and the bloc is considering steep tariffs on China-made EVs. Beijing, unsurprisingly, isn’t taking the news lightly, and has privately threatened retaliatory tariffs on the EU’s aviation industry, sources told Bloomberg.
  • That would be a tough road for Airbus, which has benefited from previously friendly business-minded diplomacy. Last year, Airbus and Chinese officials agreed to develop a second major Airbus manufacturing plant in the country, with operations due to begin as soon as late 2025; a factory there already produces the A320neo aircraft and completes the interiors of the A330 aircraft.

United We Fall: While Airbus may benefit from Boeing’s myriad struggles, US airlines suffer. United said Tuesday it would hire fewer-than-expected employees this year due to delays in deliveries from Boeing. The news comes after a meeting last week between Boeing and the Federal Aviation Administration, in which the regulatory body declined to increase the monthly production cap it put on the manufacturer. If it wasn’t clear before, it’s clear now: Where Boeing goes, so goes the rest of the US aviation industry. Let’s just hope that isn’t crashing into the ground.