Boeing Shares Drop as China Confirms Reduced Aircraft Purchase Plan

Mintesinot Niggusie

Shares of Boeing fell 4.1 percent on Thursday after China confirmed it would purchase 200 aircraft, a figure that fell short of earlier market expectations and revived concerns over demand from one of the planemaker’s most important markets.

US President Donald Trump said the agreement was reached during talks with Chinese President Xi Jinping, speaking on Fox News Channel’s Hannity programme, though he provided no details on aircraft types, delivery schedules or the final commercial structure of the deal.

“One thing he agreed to today, he’s going to order 200 jets … 200 big ones,” Trump said. The figure is significantly lower than earlier discussions, which had centred on a potential package of around 500 aircraft, including Boeing 737 MAX jets.

Markets had been positioning for a larger order, and the lower-than-expected outcome triggered a decline in Boeing’s share price. No formal breakdown of the agreement has been released regarding how the aircraft will be allocated across Chinese airlines.

China has also been in parallel discussions for a comparable order with European rival Airbus, underscoring continued competition between the world’s two largest aircraft manufacturers in the Chinese aviation market.