By Trevor Hunnicutt, Dan Catchpole and Shivansh Tiwary
ABOARD AIR FORCE ONE, May 15 (Reuters) – China has agreed to buy 200 Boeing jets, with a potential for the order to rise to as much as 750 planes, U.S. President Donald Trump told reporters on Friday, adding that the planes would have GE Aerospace engines.
The deal “includes approximately 200 planes and a promise of up to 750 if they do a good job”, Trump told reporters. More details on the deal such as which type of jets and when the order would be delivered were not immediately available.
The orders, if finalized, would mark Boeing’s first major Chinese deal in nearly a decade, after the U.S. planemaker was largely shut out of the world’s second-largest aviation market amid trade tensions between Beijing and Washington.
It was not immediately clear how many of the 200 planes announced by Trump represented new business for Boeing versus aircraft already in its order backlog.
People familiar with China’s purchasing patterns said Beijing has previously bundled new orders with repeat announcements when unveiling trade packages tied to diplomatic visits by U.S. and European leaders.
There was no immediate announcement on the order from Boeing. Planemakers usually disclose large deals once they are formalised. Boeing did not immediately respond to a request for comment.
Its CEO Kelly Ortberg and GE Aerospace CEO Larry Culp were among the group of American executives who accompanied Trump to China in hopes of clinching deals or resolving business disputes.
For China, such a big order would secure capacity to keep growing its aviation market as production of its home-grown COMAC C919 narrow-body falls short of ambitious targets.
It would also help Boeing narrow the gap with rival Airbus, which has pulled far ahead in China in recent years.
An estimate from aviation intelligence and advisory firm IBA put the value of the 200-aircraft order at roughly $17 billion to $19 billion, assuming 80% of the mix is made up of MAX jets.
“This number, however, could increase to $25 billion if a larger proportion (around 40%) of the total order is announced for the widebody aircraft,” IBA’s Samuel Kenekueyero said.
The deal would be a much-needed win for Trump, whose aggressive tariffs and other trade policies have so far failed to make much of a dent in the large U.S. trade deficit.
An order for more than 500 jets, if it materializes, would be the largest in aviation history, surpassing IndiGo’s 500-aircraft deal for Airbus narrowbodies, though China’s purchase would likely be split among its three major state-run carriers.
ORDER SIZE BELOW EXPECTATIONS
Shares of the U.S. planemaker had dropped nearly 4% on Thursday after Trump told Fox News Channel China had agreed to buy 200 jets, well below analysts’ expectations. They were down about 2.6% on Friday, while GE Aerospace shares fell 2%.
Industry sources have said Boeing was originally in negotiations for at least 500 narrowbody jets tied to the Beijing summit with dozens of widebody jets and potentially as many as 200 to follow at a later date.
Trump said Xi would pay a return visit to Washington in September, implying it may become the focal point of the next tranche of potential plane orders.
However, concerns over after-sales support have weighed on buying decisions, said Li Hanming, an independent expert on China’s aviation industry.
“The reason China isn’t buying is very simple: no one wants to buy something without guaranteed after-sales maintenance and support. Last May, the U.S. was still threatening export restrictions on parts. If they impose parts embargoes like that, who would still dare to buy Boeing?”
(Reporting by Trevor Hunnicutt, Shivansh Tiwary, Dan Catchpole, Tim Hepher, Jarrett Renshaw and Susan Heavey; Writing by Michelle Nichols; Editing by Doina Chiacu and Arun Koyyur)
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