China airlines cast doubt on Airbus '05 order tally
China airlines cast doubt on Airbus '05 order tally
Fri Feb 17, 2006 9:29 AM ET
SHANGHAI, Feb 17 (Reuters) - Chinese airlines behind a $10 billion plane deal that powered Airbus <EAD.PA> past Boeing Co. <BA.N> in 2005 orders told Reuters they have not paid deposits, as would normally be required to count a deal as a firm order.
The planemaker said on Friday, however, that deposits had been paid and that it had satisfied the conditions for reporting the planes as firm orders.
Airbus came from behind in December to retain its crown in orders, surging forward with help from a 150-plane deal inked during a visit by Chinese Premier Wen Jiabao to France.
Yet airlines set to get the planes said deposits had not been paid, as they await a final decision on how the planes will be allotted among the six carriers involved.
If the 150 planes are not counted, Boeing beat Airbus in order intake last year for the first time since 2000.
"We have not made any down payment, as we still don't know how many A320 jets we will get," said an Air China Ltd. <0753.HK> official in comments echoed by other carriers.
Reuters spoke to officials from five of the airlines.
A spokesman for Airbus said the deals were logged properly.
"All the conditions which we usually set before reporting firm orders have been met. These include government approval and payment of deposits," he said. He declined to give further details.
China has emerged as a major battleground between Airbus and Boeing and was a main driver behind a record year for them in 2005. Airbus booked 1,055 planes orders versus 1,002 for Boeing, both of them shattering previous records.
The U.S. planemaker also won a big deal with the Chinese in 2005.
Boeing counted just 54 of an expected 150 aircraft in its deal toward its 2005 tally, as the others had not yet been finalised.
For both Airbus and Boeing, the initial general agreements were signed by government officials.
Such deals invariably become firm orders, although it can take several months to negotiate a final contract after the initial agreement is concluded.
An official with China Aviation Supplies Import and Export Group, which represented the government in the agreements, declined to comment on the matter, referring queries to the individual airlines.
The Chinese airline executives told Reuters that, following such agreements, orders are divided among individual airlines who then enter detailed negotiations with the planemaker and pay deposits.
