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Boeing Wins $510-Million Plane Order From Air China

July 20, 1996|From Bloomberg Business News

SEATTLE — Boeing Co. said Friday that it won a $510-million order for three 747-400 aircraft from Air China, the nation's flag carrier.

The order breaks an 18-month drought in Boeing sales to China. Company executives said during visits to Beijing in April and June that as many as $4 billion in new orders were awaiting approval by the Chinese government.

"This is good news," Boeing spokeswoman Cindy Smith said.

The planes will be purchased through China Aviation Supplies Corp. for Air China. Xu Zengying, a deputy manager at China Aviation, said it has an option to buy two more 747s. If the options are exercised, the contract's value would rise to $850 million.

Boeing said it could not confirm the options.

China Aviation has not said which company will provide engines for the new planes--United Technologies Corp.'s Pratt & Whitney unit, General Electric Co. or Rolls-Royce. The three planes are scheduled for delivery in 1997 and 1998.

Boeing shares fell 87.5 cents to $87.24 on the New York Stock Exchange.

The Boeing order comes as trade relations between the U.S. and China are improving after months of tension. The U.S. recently renewed China's most-favored-nation trading status.

The two countries also defused a dispute over intellectual property rights. At the height of that dispute in April, China agreed to buy 30 aircraft worth $1.5 billion from Boeing rival Airbus Industrie, the European consortium. Boeing executives said at the time that the company did not win that order because of poor Washington-Beijing trade relations.

China is an important market for aircraft makers because newfound prosperity is fueling growth in the country's airlines. Boeing's Smith said China plans to buy 230 to 300 aircraft in the next five years. Through May of 1996, China's airlines carried 21.65 million people, up 15% from a year earlier.

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