Boeing, Airbus to share Taiwan's China Airlines passenger jet order, sources say

China Airlines

07/11/2024 04:12

By Ben Blanchard and Tim Hepher
       TAIPEI/PARIS, Nov 7 (Reuters) - Taiwan's China Airlines
 2610.TW  is nearing a decision to split a multi-billion-dollar
order for long-distance passenger jets between Airbus and
Boeing, while an order for freighters hangs in the balance,
industry sources told Reuters.
    The decision will come as the United States' presidential
election ended with the Republican Donald Trump sweeping back
into office, and Taiwan keen to ensure the new U.S. government
understands Taipei's desire to ensure strong relations continue.
    Taiwan's largest carrier has been weighing Boeing's  BA.N 
777X and the Airbus  AIR.PA  A350-1000 as replacements for its
fleet of 10 Boeing 777-300ERs and to provide capacity for future
growth.
    The sources said China Airlines could order as many as 20
passenger jets to be split equally between the two plane giants,
while the choice of freighters was at least partly being weighed
against the backdrop of U.S. presidential elections.
    Such a deal for the passenger jets would be worth almost $4
billion after typical industry discounts, according to estimated
delivery prices from aviation consultancy Cirium Ascend.
    A final decision depends on the airline's board, the sources
said.
    China Airlines told Reuters that it plans its fleet "based
on market demand and corporate developments, and carefully
studies the relevant technical and commercial conditions to
select the most appropriate aircraft type".
    Airbus and Boeing declined comment.
    Multibillion-dollar deals for new aircraft often have to
take political as well as business considerations into account -
especially in the case of Taiwan, given its international
situation and pressure it faces to give in to China's
sovereignty claims, which are rejected by the democratically
elected government in Taipei.
    The U.S. is Taiwan's most important international backer and
arms supplier despite a lack of formal diplomatic ties, and
China Airlines' majority owner is the Taiwan government.
    Trump's first administration strongly supported Taiwan, but
comments he made on the campaign trail saying the island needed
to pay for Washington's protection and that Taiwan stole U.S.
semiconductor business unnerved Taipei.
    Taiwan's government swiftly congratulated Trump on his
election win and says it is confident of strong ties.
    Industry sources say Taiwan has traditionally been seen as
one of several key markets where the diplomatic context can help
to sway a purchase decision one way or another, on top of the
stringent technical evaluations carried out by airlines.
    Last month, however, the airline's chairman denied it was
facing any political pressure over its fleet decisions.
    Hsieh Shih-chien told reporters that only China Airlines
itself made the assessments about which aircraft to buy.

 (Reporting by Ben Blanchard and Tim Hepher; Editing by Lincoln
Feast.)
 ((tim.hepher@thomsonreuters.com; +33 1 49 49 54 52; Reuters
Messaging: tim.hepher.thomsonreuters@reuters.net))