Airbus, Battling Boeing For Market Share, Secures New Orders From Chinese Airline
A strategic victory for Europe's Airbus Group (OTC: EADSY) over American rival Boeing (NYSE: BA), as the two airplane manufacturers compete across the globe: one of China's largest carriers, China Eastern Airlines (NYSE: CEA) has ordered 70 Airbus A320neo passenger jets, an upgraded version of the company's popular A320 jet.
According to the UK edition of the International Business Times, the deal, worth $6.37 billion, will expand China Eastern's capacity by around 13 percent once the aircraft enter service, starting in 2018.
China's booming economy and rapidly-growing middle class are expected to make the People's Republic the world's largest domestic airline market in the next several decades – overtaking the United States – and a battleground for airline manufacturers competing for market share.
Airbus reportedly beat out Boeing in 2013 for orders placed, with 1,619, but fell behind its U.S. rival in terms of aircraft delivered.
And Boeing, for its part, is coming off a successful 2013, despite on-going issues with its new 787 Dreamliner. In January, the company said its yearly profit rose 18 percent – and that it delivered a record 648 commercial jets in 2013. But Boeing is being more cautious about 2014, reportedly projecting earning of only around two percent.
And earlier this week, the Pentagon announced it had awarded a $2.1 billion contract to Boeing for 16 P-8 A Poseidons. The long-range spy planes will be used by the U.S. Navy
Boeing is also making in-roads into China's aviation market. The company recently delivered its first of 10 777-300ER (Extended Range) aircraft to Guangzhou-based China Southern Airlines (NYSE: ZNH), reportedly Asia's largest airline in terms of fleet size and number of passengers carried.
According to the industry web site Travel Daily News, China Southern plans to use the 777-300ER on its new North American route – which will fly from southern China to the U.S. East Coast.
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