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Taiwan splits $3.5B jet deal
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August 11, 1999: 12:38 p.m. ET
China Airlines buy of Boeing, Airbus aircraft is boost for European builder
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LONDON (CNNfn) - Taiwan's China Airlines split a $3.5 billion aircraft order between industry leaders Boeing and Airbus Industrie Wednesday after a tense order contest overshadowed by the country's deteriorating relations with China.
China Airlines, which has been dogged by a poor safety record, ordered 14 Boeing 747-400F cargo aircraft and is expected to confirm orders for at least seven Airbus A340-400 long-range passenger aircraft at the Taiwan air show this week.
The deal would mark a victory for Airbus over Boeing's rival 777 passenger aircraft. The airline had signed a letter of intent to take four 777s this year, but never converted the option.
It is the first sale of the A340 in the region since Airbus was stung by Singapore Airlines' (SIA) decision to return its 17 A340s in exchange for Boeing's rival 777.
That deal sparked another round of words between the two manufacturers, which are just recovering from a vicious price war that slashed profits.
SIA pulled back earlier this year from a plan to take a strategic stake in China Airlines, which is traded in Taipei but controlled by a government-owned foundation. A series of fatal crashes had seen its senior management replaced and the airline lose further market share to independent rival Eva Air.
China Airlines insisted the decision to split its order owed nothing to the U.S. "one-China" policy -- which does not support independence for Taiwan. The carrier said the order would replace existing aircraft and cut in half the number of different types it operates.
Boeing valued its share of the deal at $2.5 billion, and it makes China Airlines the largest customer for the 747 jumbo freighter. The A340s have a list price of around $1 billion.
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