Boeing is teasing another sizable aircraft order from China, potentially totaling 300-500 aircraft as part of a multi-year procurement.

With the additional aircraft included in an existing contract for 200 planes sourced from China, the deal could reach up to 700 units upon completion. It would represent one of the largest total deals in aviation history.

Boeing CEO Kelly Ortberg told reporters in Hong Kong that the deal to purchase 200 of its planes from China, already essentially announced, is expected to be finalised at the end of this year.

However, analysts naturally harbor concerns, given the historical trade ties between the West and China that have faltered at the final hurdle on multiple occasions. What may not seem like a long time till year’s end couldn’t be further from the truth for these two parties.

Either way, the 200, or possibly up to 700, aircraft are a step in the right direction for Boeing in China, which has been in a long drought in securing new commercial orders due to tensions, safety concerns, groundings, and the COVID-19 pandemic.

What Does The Initial Boeing Order Cover?

The agreement between China and Boeing, made as President Trump visited the location to meet with Government officials and brought along leaders of American companies, led to a push for trade agreements that involve matters such as aircraft.

200 jets are in the initial scope of the deal, plus engines and additional component signings to support the servicing of these planes. However, unlike in a typical contract, the specifics of the aircraft types, delivery schedules, and the allocation of aircraft to each Chinese carrier were not confirmed.

Now, sources state that the deal is in the works, awaiting finalisation, with previous reporting suggesting that a mix of aircraft would be involved, including the single-aisle 737 MAX. At the same time, widebodies were expected as Chinese carriers look to renew and grow their operations.

The likes of Air China, China Eastern and China Southern, the three major state-owned airlines, are expected to take on a large share of the deals. Once finalised, the specifics of the deployments will come to light, but what cannot be disputed is the requirement for new planes in China as the commercial fleet ages and new jets haven’t been delivered due to disruptions and tensions.

What’s important in this contract signing is the guarantees regarding aircraft delivery. This follows years’ worth of quality lapses that pushed China to reject planes. These rejections are not inherently seen as irregular, but given the political weight on the jets and relations, this angle was heightened.

A Future Deal Looms

With 200 planes looking to be firmed up after agreements were made to get the ball rolling on the recovery and renewal of China’s fleet, a pledge for this sizeable contract will look small compared to what Boeing is aiming for.

Before the 200 aircraft were essentially agreed upon, there were broader reports that China had settled on a figure much closer to 500 planes, if not more. With hundreds of orders left out on the table, there’s a much larger story to be told as a follow-on that the manufacturer will try to pursue.

Given that Boeing knows China needs hundreds more planes, the likelihood that these orders will be placed is high, but where they will go remains unclear. Given that the orders would come over time, there’s enough time for tensions to escalate again in the wrong way, which prevents Boeing from finishing the order it seemingly started with 200.

If Boeing were to secure a total order nearing 700, not only would this be colossal for its backlog, but it would also strengthen trade ties between the United States and China for decades to come through the continued delivery of aircraft.

President Trump, even before Ortberg flagged the possible purchase, had indicated that it would bring the overall pledge closer to the 750 mark after the initial deal. His eagerness was representative of what a positive relationship between China and the United States could do, especially for planemakers, suppliers, and others in the aviation industry.

Unfortunately, though, new aircraft deals with any customer are not easy to secure, with China it’s even harder, let alone for a possible 500 planes logistically, financially and more. With political and industrial risk standing in the way of a chance to foster a stable long-term partnership, this is a deal worth pursuing, but not one that’s guaranteed to happen by any means.