* Deal could involve at least 150 passenger planes-sources
* Deal could be announced during Xi's visit to Europe
* China is world's fastest-growing aviation market
* Deal would help trade ties between China and Europe
(Add comments by Chinese foreign ministry spokesman)
By Tim Hepher
March 19 China is in talks to buy at least 150
Airbus passenger jets potentially worth $20 billion when Xi
Jinping pays his first visit to Europe as president at the end
of this month, people familiar with the matter told Reuters.
In a broad-ranging deal that could help reset trade
relations between China and Europe after a bumpy year, China is
expected to buy more A330 passenger jets as talks advance to
open Airbus's second major factory in the country.
The "cabin completion" plant for A330s would bolster
Airbus's presence five years after the opening of its first
final assembly plant outside Europe in the Chinese port city of
Tianjin, where Chinese workers put together A320 jets.
The deal could also involve a decision to unfreeze the
purchase of 27 A330s blocked by China during a recent row with
the European Union over environmental policies.
"This visit to Europe by President Xi Jinping...will
certainly beneficially promote the development of ties between
China and the European Union," China's foreign ministry
spokesman Hong Lei said when asked to confirm the aircraft
order. "This will be an all-round development of relations."
A spokesman for Airbus, a subsidiary of Airbus Group
, previously known as EADS, declined to comment.
Spokespeople for major Chinese airlines including Air China
, China Eastern and China Southern
all declined to comment.
Both France and Germany are anxious to establish good ties
with China's leader and announcements on the Airbus deal package
could be made in both countries, European officials said.
The package could also include some A320 and A350 aircraft,
people familiar with the matter said.
The sources stressed that the final size of the deal could
change and would depend on last-minute talks. Previous state
visits have included tough negotiations on the sidelines.
The sources declined to be named as the matter was
AIRBUS TARGETS CHINA
China remains the world's fastest-growing aviation market
despite a recent slowdown in its economy, with a surge in
outbound travellers fuelling the expansion. One in four people
from China travelled by plane last year, with that number set to
rise to virtually the whole active population in the next two
decades, Airbus says.
Airbus faces stiff competition from U.S. arch-rival Boeing
over such deals, especially for wide-body jets like the
A330, an established model that Airbus is hoping to revitalise
as Boeing increases output of its newer 787 Dreamliner.
Both companies are offering their aircraft at steep
discounts to win China's business, industry sources say.
Airbus is promoting a new "regional" version of the A330
aimed at China's crowded domestic market, but Boeing hopes to
persuade airlines to choose its alternatives.
Boeing also appears to have deals with China for similar
quantities of jets that are not yet announced, industry sources
Beijing has tended in the past to balance purchases of
aircraft from each of the two main foreign suppliers, especially
when buying popular narrow-body models like the A320 and Boeing
737 that are most used on its crowded domestic network.
Recently, China has shown signs of decoupling strategic
items like air transport from diplomatic visits, with more and
more airlines announcing their deals separately and new Chinese
leasing companies also making a significant mark.
However, France has expressed optimism over its ties with
China in nuclear energy and aerospace - diplomatic code for
possible deals during the March 25-27 visit.
"We will see how many aircraft Airbus sells at the end of
the visit," a French official said this week.
Toulouse-headquartered Airbus bases most of its operations
in France and Germany.
Xi plans to visit both countries, starting with France where
other important industrial deals are expected to be signed,
celebrating 50 years since President Charles de Gaulle became
the first Western leader to recognise China.
(Additional reporting by Elizabeth Pineau and Cyril Altmeyer in
PARIS and Fang Yan and Ben Blanchard in BEIJING; Editing by
Miral Fahmy and Matt Driskill)