Airbus shares gain on report China may order hundreds of its aircraft
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Investing.com -- Shares of French aircraft manufacturer Airbus Group SE (EPA:AIR) rose over 3% in morning trade on Wednesday on report that China is considering a large aircraft order, which could be finalized as early as next month.
Bloomberg, citing people familiar with the matter, reported that discussions are currently ongoing with Chinese airlines to determine the size of the potential order.
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Shares were up 3.5% at EUR 172.30 as of 08:09 GMT.
The deal could encompass around 300 aircraft, including both narrow-body and wide-body models, the report added.
One person familiar with the matter suggested that the order could range from 200 to possibly 500 aircraft, depending on the outcome of the negotiations.
The latest development coincides with a visit from European leaders to Beijing, aimed at celebrating the enduring relationship between the two regions.
In a note, Jefferies said that while Airbus’ order backlog and focus on execution reduce the immediate importance of new orders, potential deals with China still carry weight.
The firm noted that a large A330neo order was rumored ahead of last year’s Farnborough Airshow but never materialized.
According to Jefferies, if the current talks lead to a deal, it could come with substantial down payments, similar to China’s 2022 A320neo order, and would also benefit Rolls-Royce (OTC:RYCEY) if wide-body aircraft are included.
Negotiations are ongoing and could take more time to conclude, with the outcome still uncertain and the possibility that talks may collapse, the Bloomberg report noted.
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Airbus shares gain on report China may order hundreds of its aircraft