Taiwan’s China Airlines splits $12-billion jet deal between Boeing and Airbus By Reuters

By Ben Blanchard

TAIPEI (Reuters) -Taiwan’s China Airlines will split an order for its long-haul fleet renewal between Boeing (NYSE:) and European rival Airbus and buy freighters from the U.S. planemaker in a closely watched deal worth almost $12 billion.

Taiwan’s largest carrier said on Thursday it would buy 10 Boeing 777-9 aircraft and 10 Airbus A350-1000s as well as four 777-8 freighter aircraft for $11.9 billion at list prices, with deliveries for the new aircraft starting from 2029.

The news confirms a Reuters report last month that the airline would split an order for up to 20 large passenger jets between Boeing and Airbus, with the choice of freighters being weighed against the backdrop of the U.S. presidential election.

The passenger jets will replace an existing fleet of 10 Boeing 777-300ERs and provide capacity for future growth.

“China Airlines has been actively planning its fleet size and is steadily expanding its presence in the global passenger and cargo markets,” it said in a statement.

The A350s are powered by Rolls-Royce (OTC:) engines and the delayed 777-9 jet is powered by GE Aerospace engines.

China Airlines shares closed down 1%, in line with the broader index.

Shares in Boeing outperformed a slightly stronger U.S. market, while Airbus fell 1.2% in line with a weaker Paris bourse.

Multibillion-dollar deals for new aircraft often have to take political as well as business considerations into account. This is especially true in the case of Taiwan, given its international situation and pressure it faces to give in to China’s sovereignty claims, which are rejected by the democratically elected government in Taipei.

The United States is Taiwan’s most important international backer and arms supplier despite a lack of formal diplomatic ties, and China Airlines’ majority owner is the Taiwan government.

China Airlines Chairman Hsieh Shih-chien said in October the carrier was not facing any political pressure on the decision about its long-haul fleet.