China to ink $9b deal with Airbus, sources say

Order involves as many as 150 planes Details expected as early as today

PARIS— Airbus SAS may win an order from China for as many as 150 planes valued at $9 billion ( U. S.), say people familiar with the negotiations.

Chinese Premier Wen Jiabao, after touring Airbus’s factory in Toulouse, France, may announce at least part of the order today at a Paris press conference, said the people, who declined to be named because the order has not been announced. The European planemaker also said after Wen’s visit that it might open a factory in China for assembling A320 planes. Air China and the country’s six airline groups may need 1,790 planes worth $230 billion by 2023, Airbus estimates. Boeing on Nov. 20 won an order from China for 70 planes worth $4 billion.

“It’s time for Airbus to get something,” said Richard Aboulafia, vice president at the Teal Group, a Fairfax, Va.- based consulting company. “ Boeing recently got two big orders, and the Chinese like to shop on both sides of the street.”

Boeing signed the 70- plane order during a visit to Beijing last month by U. S. President George W. Bush. Boeing has since said it’s in negotiations with the Chinese for an additional 80 planes. The order announcement from China tomorrow is for A320 planes, which are single- aisle aircraft that compete with Boeing’s 737 planes and generally sell for around $60 million, depending on the model.

China, the world’s most populous nation, with an estimated 100 million tourists venturing abroad every year by 2020, is a market on which Airbus, the world’s largest commercial planemaker, and Boeing Co., the No. 2., are counting on for new orders. Airbus and China will negotiate over the next six months before deciding whether to move ahead with a Chinese factory.

Spokespersons for Airbus and China’s Civil Aviation Administration declined to comment.

“ If it happens, this is a huge deal — it would be unprecedented for either Airbus or Boeing to have a production line in another country,” said Doug McVitie, managing director of Arran Aerospace, a Dinan, France- based forecasting company. “ It’s an attempt to buy market share and keep Boeing from selling further to China.”

Boeing won an agreement in January from six Chinese airlines for the purchase of sixty 787s, Boeing’s newest plane, which will enter service in 2008.

Airbus had 494 orders in its books as of Oct. 31, lagging behind 800 for Chicagobased Boeing up to Nov. 30, according to information from the manufacturers.