China - The world's second-biggest aircraft market

Airbus, the world’s largest commercial planemaker, won an order from China for 160 aircraft valued at around $17 billion, cementing a record year.

The deal comprises 110 A320s and 50 A330s, European Aeronautic, Defence & Space, CEO, Louis Gallois, Airbus’s parent, said after the contracts were signed in Beijing on Monday. The deal includes 10 A330 aircraft ordered by China Southern Airlines Co, according to an announcement at a news conference in Beijing on Monday.

The contracts are a boost for Toulouse, France-based Airbus as it struggles to end losses following a $6.8 billion charge from the A380 superjumbo and delays to its new A350 long-haul plane. Airbus and Chicago-based Boeing have benefited from a jump in sales to Asia and the Persian Gulf, sending annual orders at both manufacturers to record levels. Airbus will also award Chinese companies 5% of supply contracts for the 300-seat A350, including wing flaps and rudders, Chief Operating Officer Fabrice Bregier said on Monday, without elaborating.

The European planemaker is building an assembly line in China. The executives are travelling with a trade delegation led by French President Nicolas Sarkozy on a three-day visit to China. Airbus’s new orders this year will surpass the 1,111 amassed in 2005.

Airbus had already won 1,021 new orders through the end of October and announced firm orders or commitments for 297 further planes at the Dubai Air show in mid-November. While Airbus is booking new orders at record rates, it faces huge financial challenges in coping with a weak dollar, the currency for aircraft purchases.

Airbus said on November 23 it may have to cut its e2 billion research budget to trim costs as the dollar’s decline becomes what Chief Executive Officer Tom Enders called “life threatening”. China’s economic growth, which more than doubled personal income in the past five years, is boosting demand for air traffic and airlines’ ambitions for expansion.

Passenger volume will have an annual 14.5% growth until 2010, according to estimates of the General Administration of Civil Aviation. Cargo volume will rise by an annual 13%.