China airlines cast doubt on Airbus '05 order tally

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Feb 17 (Reuters) - Chinese airlines behind a $10 billion plane deal 
that powered Airbus past Boeing in 2005 orders told Reuters they have 
not paid deposits, as would normally be required to count a deal as a 
firm order.

The planemaker said on Friday, however, that deposits had been paid 
and that it had satisfied the conditions for reporting the planes as 
firm orders.

Airbus came from behind in December to retain its crown in orders, 
surging forward with help from a 150-plane deal inked during a visit 
by Chinese Premier Wen Jiabao to France.

Yet airlines set to get the planes said deposits had not been paid, 
as they await a final decision on how the planes will be allotted 
among the six carriers involved.

If the 150 planes are not counted, Boeing beat Airbus in order intake 
last year for the first time since 2000.

"We have not made any down payment, as we still don't know how many 
A320 jets we will get," said an Air China official in comments echoed 
by other carriers.

Reuters spoke to officials from five of the airlines.

A spokesman for Airbus said the deals were logged properly.

"All the conditions which we usually set before reporting firm orders 
have been met. These include government approval and payment of 
deposits," he said. He declined to give further details.

China has emerged as a major battleground between Airbus and Boeing 
and was a main driver behind a record year for them in 2005. Airbus 
booked 1,055 planes orders versus 1,002 for Boeing, both of them 
shattering previous records.

The U.S. planemaker also won a big deal with the Chinese in 2005.

Boeing counted just 54 of an expected 150 aircraft in its deal toward 
its 2005 tally, as the others had not yet been finalised.

For both Airbus and Boeing, the initial general agreements were 
signed by government officials.

Such deals invariably become firm orders, although it can take 
several months to negotiate a final contract after the initial 
agreement is concluded.

An official with China Aviation Supplies Import and Export Group, 
which represented the government in the agreements, declined to 
comment on the matter, referring queries to the individual airlines.

The Chinese airline executives told Reuters that, following such 
agreements, orders are divided among individual airlines who then 
enter detailed negotiations with the planemaker and pay deposits.

The six airlines involved in the Airbus deal were: Air China, China 
Southern Airlines, China Eastern Airlines, Hainan Airlines, Sichuan 
Airlines and Shenzhen Airlines.

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