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Airbus in China talks
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August 21, 2001: 5:48 a.m. ET
European plane maker eyes $2.7B order, seeks to match Boeing sales
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LONDON (CNN) - European plane maker Airbus is in talks to sell up to 50 aircraft worth as much as $2.7 billion to the Chinese, reports said on Monday.
Airbus is out to match Boeing's expected $2 billion sale of 36 airliners to five Chinese carriers, a deal that has yet to be cleared by the State Development Planning Commission, which must approve plane purchases.
 "We are in discussion with the Chinese on 30 to 50 aircraft," Airbus's top salesman John Leahy was quoted by the Wall Street Journal as saying. Airbus's spokeswoman in China did not immediately return CNN calls.
A decision is expected by the end of the year on an order that could be worth between $1.5 billion and $2.7 billion, reports said. The discussions center on planes from the single-aisle A320 family that can carry between 100 and 220 passengers.
Airbus and Boeing have moved their dogfight for control of the skies to China, as a world economic slowdown deals a blow to aircraft orders in the indutrialised nations. Airbus forecasts that Chinese airliner purchases will amount to 1,600 aircraft, worth a total of about $149 billion, over the next 20 years.
The Toulouse-based aircraft maker expects half of those planes to be single-aisle jets with between 100 and 180 seats, the most popular size for services on mainland domestic routes.
Boeing's estimate is that China will need 1,790 new commercial jets by 2019, making the nation the world's second-largest market for commercial aircraft after the United States.
Airbus, 80 percent owned by European Aeronautic, Defense & Space Co. (PEAD) and 20 percent by British weapons builder BAE Systems (BA-), now has 157 aircraft in service in China, Hong Kong and Macau.
Officials from China's powerful State Development Planning Commission told Reuters they were unaware of a major Airbus order. "I still don't know about the Airbus deal. It's possible," said an official with the State Development Planning Commission's infrastructure department.
While the state-controlled Chinese airlines would like to buy aircraft from one manufacturer to cut costs, in line with their counterparts in the industry, airplane orders are typically politically-influenced.
Boeing lost out on an order to Airbus for 33 planes in 1996, following a dispute between Beijing and Washington on intellectual property and U.S. support for Taiwan when China test fired missiles across the Taiwan Strait.
U.S. President George W. Bush plans to visit China in October, and it is possible an announcement could be made during or just before that visit.
Relations between the United States and China were strained earlier this year over a collision between a U.S. spy plane and a Chinese fighter jet just off China's coast.
Boeing CEO Phil Condit said shortly after that incident that diplomatic problems posed more of risk to his company's business with China than to most other areas of trade between the two nations. 
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