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China Becomes Big Business for Boeing

If you ask aerospace analysts — and if you ask Boeing itself — China is going to be one of Boeing’s biggest markets for commercial airplanes over the next 20 years. In total, Boeing has predicted that China will need to buy some 6,330 planes from Boeing, Airbus, and other suppliers through 2034, and that Chinese companies will spend roughly $950 billion acquiring them.

And Tuesday was a nice start toward that goal.

On Tuesday, in a paired release of Chinese airplane sales news, Boeing announced that BOC Aviation has placed an order for 11 Next-Generation 737-800 aircraft and 11 737 MAX 8s. (According to S&P Capital IQ, by the way, “BOC” stands for “Bank of China.”)

At the same time, Boeing confirmed that it has inked a separate deal to supply a company from Taiwan. In what Boeing called “the largest single commercial airplane purchase in Taiwan aviation” history, Taiwanese carrier EVA Airways will buy “up to” 24 787-10 Dreamliners and two Boeing 777-300ER (Extended Range) airplanes.

In total, that’s 48 new airplane orders reported — not bad work for a Tuesday.

The horse race

Now what does this all mean for Boeing’s perpetual horse race against Airbus, and for which of these companies will end up winning the crown for biggest airplane seller of 2015? Clearly, it gives Boeing a big leg up — albeit not all the way up.

According to Boeing’s most recent update on plane orders received through the penultimate week of November, only 42 of the Chinese planes have actually made it into Boeing’s books as “firm” orders. While all 22 of the 737s ordered by BOC made it onto the order book, only EVA’s two 777s, and 18 of its Dreamliners, are officially classified as “firm.” (This suggests the remaining 787s have been “optioned” for later purchase.) Nevertheless, Tuesday’s news did wonders for Boeing’s order book, which now looks a little something like this:

•438 gross orders for single-aisle 737s
•97 Dreamliner 787s
•58 widebody 777s
•48 Boeing 767s
•and six 747s.

In total, that’s 647 gross plane orders for Boeing. With no new cancellations reported this week, the cancellation tally stands at 79 planes, and Boeing’s net order tally for the year is now 568 planes.

That said, with 850 net orders to Boeing’s 568, Airbus continues to hold a commanding lead over Boeing. What’s more, it’s a lead that is likely to grow rather than shrink in the near term. Next week — probably Thursday or Friday — should see Airbus release its sales report for all of November (adding a month’s worth of orders to its tally), whereas Boeing will be reporting only an incremental week’s new sales next week.

China Becomes Big Business for Boeing

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