By Cyril Altmeyer
PARIS, March 26 China signed a new 10-year
accord on Wednesday allowing Airbus to assemble A320 planes on
its soil until 2025 and unblocked orders for larger jets worth
more than $6 billion, restoring ties after a row with Europe
over aircraft emissions.
Watched by visiting President Xi Jinping and his French
counterpart Francois Hollande, Chinese officials in Paris also
signed deals to co-produce 1,000 French EC-175 helicopters over
20 years with Airbus Group's helicopter division and to
co-operate on turbo-prop engines with France's Safran.
The A330 orders that got the go-ahead on Wednesday had been
suspended during a trade row triggered by China's opposition to
a European Union scheme forcing airlines to join an emissions
mechanism that China feared could harm its carriers.
Airbus said China had agreed to buy a total of 70 aircraft
including 43 A320-family airplanes and had gone ahead with
previously frozen orders for 27 Airbus A330 aircraft - deals
worth a combined $10.2 billion at catalogue prices.
But it failed to make headway in efforts to expand sales of
its most popular wide-body aircraft by offering a new version of
its A330, specially tailored for China's domestic market. Airbus
is prepared to open a second industrial plant for this project.
Airbus opened its first non-European aircraft assembly plant
in the port city of Tianjin in 2009 and has been negotiating for
months to extend the local production venture beyond 2016.
The factory and land have capacity to increase to 8 aircraft
a month and could play a major role as Airbus, and its larger
U.S. rival Boeing, increase production to keep up with
For the time being, production will remain at 4 a month,
Airbus head Fabrice Bregier told Reuters.
China is the world's fastest-growing aviation market despite
a slowdown in its economy, with a surge in outbound travellers
fuelling the expansion.
But deals announced during the French phase of Xi's first
presidential visit to Europe fell short of expectations that
China would back the new regional model of Airbus A330 and sign
a total of 150 jet orders worth as much as $20 billion.
"The extension of the Tianjin agreement secures production
of 1,000 A320 aircraft over 10 years and these will be the
subject of future orders," Bregier told Reuters.
He reiterated there was a potential market for 200 of the
new regional types of A330 offered for China's domestic market.
Industry sources say Airbus has been locked in a battle with
Boeing for that slice of the busy domestic market.
Bregier said Airbus hoped to make progress within a year on
discussions over a possible cabin completion centre for the A330
which is expected to be placed in Tianjin, alongside the
existing A320 assembly plant.
(Reporting by Elizabeth Pineau, Cyril Altmeyer; Editing by
Andrew Callus and Jane Merriman)