Airbus to set up new assembly line in China, gets nod for 160 plane order

This move comes as domestic travel in China rebounds to pre-pandemic levels and Airbus overtaking America’s Boeing as a supplier to China amid the ongoing tensions between Beijing and Washington.

The Reuters report said that Airbus managed to secure a nod for the existing order for 160 jets but could not get new orders during a French state visit.

"The recovery here is quite impressive. We see very strong momentum," Airbus Chief Executive Guillaume Faury told reporters during his first visit to China since the COVID-19 crisis, the report said.

China has always distributed its jet orders between Boeing and Airbus, but due to trade tensions, purchases from the American aircraft manufacturer have decreased in recent years. 

China currently accounts for more than 20% of the global aircraft market and is introducing its own rival aircraft, the C919.

According to Airbus, China's air traffic is expected to grow at an annual rate of 5.3% over the next twenty years, surpassing the global average growth rate of 3.6%. This will lead to a demand for 8,420 passenger and freighter aircraft between now and 2041, representing more than 20 percent of the world's total demand for around 39,500 new aircraft in the next 20 years.

Since 2008, the Airbus Group has been manufacturing its most popular A320 aircraft family in Tianjin, which is located outside the Chinese capital city.

The announcement of a new assembly line in China is likely to attract interest from India, which is a growing economic and strategic competitor of China.

Recently, India's aviation minister had urged Airbus and Boeing to establish local jetliner assembly facilities in the country after receiving record orders for planes.

When asked about Airbus' presence in India, Faury told Reuters in Beijing that the company is already extensively involved in establishing the assembly of the C295 military transporter in India.

Airbus entered the Chinese market nearly 40 years ago, in 1985, when an A310 was first delivered to China Eastern Airlines. By the end of the first quarter 2023, the Airbus in service fleet in China has risen to over 2,100 aircraft, representing more than 50 percent of the market.