Sept. 24, 2015, (c) Leeham Co. Boeing yesterday announced a deal pegged at $38bn for 300 jets for China, timing the announcement with the State visit to Seattle of Chinese President Xi Jinping.
Orders and Commitments for Boeing Commercial Airplanes
Boeing and China Aviation Supplies Holding Company (CASC) have signed a General Terms Agreement related to the purchase of 300 airplanes. The package has a value of approximately $38 billion at list prices.
Aircraft orders and commitments include:
(240) airplanes for Chinese airlines, including (190) 737s and 50 widebody aircraft
(60) 737s for leasing companies ICBC and CDB Leasing
“Boeing airplanes have played an important role in supporting the development of China’s aviation transportation for the past 40 years,” said Li Hai, president of China Aviation Supplies Holding Company. “These additional airplanes will further help connect the people in China and around the world.”
“China is a critical international market for commercial airplanes,” said Conner. “We thank our Chinese customers for selecting fuel-efficient Boeing airplanes to meet their fleet growth and expansion.”
But the information above is remarkably vague on detail. Questions immediately arose on Wall Street over just how big this deal truly is.
The transaction doesn’t even identify what wide-body orders and commitments are included in the 50. Nor is there any information about how many of the airplanes, whether wide- or narrow-body are from announced but Unidentified orders. There is no information about the number of firm orders vs options, or even MOUs.
There’s no model or sub-type break down, and no information about the delivery years. This makes it impossible to judge whether Boeing’s production gap for the 777 Classic and 747-8 get any support out of this deal.
“This agreement includes approvals and new commitments. Included in the agreement are a number of new incremental commitments, as well as approvals of previous commitments,” spokesman Doug Alder Jr. wrote LNC in an email. “We aren’t providing specific details at this time.”
Wall Street was not impressed with this supposed record-breaking order. Boeing stock was off $2.38 when the Dow Jones was flat.
“The Chinese order was a disappointment, and that weighed on the stock,” one analyst write LNC. “The lack of details indicates this was not the order that was expected. And Boeing set those expectations.”
Update, 0730AM PDT: Other media are catching on there is less to this than meets the eye. Aviation Week is particularly insightful.