China’s Airbus Tilt Threatens Boeing’s Steady Comeback

Boeing’s (NYSE: BA) impressive 2025 recovery story faces a potential setback as reports emerge that China is considering a massive order for hundreds of Airbus aircraft, potentially worth tens of billions of dollars. While Boeing shares continue their steady climb with gains of 13.6% year-to-date, reports of China further cementing its relationship with European rival Airbus threaten to complicate the American aerospace giant’s path back to profitability and market leadership.

Boeing’s Recovery Momentum Shows Promise

Boeing shares closed at $213.43, up 0.93% for the day and continuing the company’s impressive 2025 performance with year-to-date gains of 20.58% compared to the S&P 500’s modest 1.51% increase.

The aerospace manufacturer has delivered solid returns over multiple periods, with one-year gains of 15.64% and three-year performance of 53.27%, demonstrating investor confidence in the company’s turnaround efforts. Boeing’s market capitalization now stands at $160.927 billion, reflecting its position as a major player in the global aerospace industry despite ongoing challenges.

The stock trades within a 52-week range of $128.88 to $215.80, with recent performance near the upper end of this range showing sustained investor optimism. Key financial metrics reveal the extent of Boeing’s operational challenges, including negative profit margins of 16.58%, diluted earnings per share of negative $17.95, and negative free cash flow of $7.94 billion.

However, the company maintains substantial cash reserves of $23.65 billion, providing financial flexibility during the recovery period. CEO Kelly Ortberg, appointed in August 2024, has been instrumental in improving operational execution and rebuilding confidence among regulators, customers, and investors following years of quality and safety concerns.

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Boeing’s Operational Progress Under Ortberg’s Leadership

Boeing has made significant strides in addressing its three primary objectives for 2025 under CEO Kelly Ortberg’s leadership, demonstrating improved operational discipline and regulatory compliance.

The company received Federal Aviation Administration approval to expand flight testing for the 777X program, with management confirming the target for first delivery to Lufthansa in 2026, a critical milestone for the wide-body aircraft program.

Emirates, a key 777X customer, recently confirmed its expectation for first delivery by the end of 2026, providing additional validation of Boeing’s timeline commitments. Boeing remains on track to achieve its target production rate of 38 aircraft per month for the 737 MAX, with Ortberg outlining plans to subsequently increase the rate to 42 per month and then raise it in increments of five per month, pending FAA approval and quality demonstrations.

The company must prove to regulators that it can maintain high-quality standards at the 38 per month rate before the production cap is lifted, representing a crucial test of Boeing’s manufacturing capabilities.

The defense business has shown remarkable improvement, generating its first profit in the first quarter after years of losses, marking a significant operational turnaround. Boeing’s Defense, Space & Security division achieved “estimated-at-completion stability” in the quarter, indicating improved cost forecasting and project management on problematic fixed-price contracts that had previously generated substantial losses.

China’s Potential Airbus Deal Threatens Market Share

Reports indicate that China is considering placing an order for hundreds of Airbus aircraft as soon as next month, when European leaders visit Beijing to celebrate 50 years of diplomatic relations between China and the European Union.

The potential deal could involve approximately 300 planes, including both narrowbody and widebody models, with some sources suggesting the order could range between 200 and as many as 500 aircraft. Such an order would rank among the largest in aviation history, potentially worth between $37-80 billion depending on the final aircraft mix and configurations.

The timing of the potential announcement coincides with visits from French President Emmanuel Macron and German Chancellor Friedrich Merz, whose countries are the two largest shareholders in Airbus.

Widebody aircraft would constitute a significant portion of any new Airbus order, with the A330neo potentially winning substantial sales, representing a direct challenge to Boeing’s traditional strength in the twin-aisle market segment.

Boeing has been effectively shut out of the Chinese market since 2017 due to trade tensions and safety concerns following the 737 MAX crashes, with Chinese authorities ordering airlines to halt Boeing deliveries in April 2024.

The potential Airbus deal would further cement the European manufacturer’s dominance in China, a market that represents the world’s largest growth opportunity for commercial aviation over the next two decades.

Strategic Implications for Boeing’s Recovery

The rumored Chinese order for Airbus aircraft underscores the geopolitical challenges Boeing faces as it attempts to rebuild its market position and return to sustainable profitability.

Trade tensions between the United States and China under both the Biden and Trump administrations have created lasting damage to Boeing’s relationship with Chinese customers, who historically balanced orders between Boeing and Airbus. Boeing’s role as America’s largest exporter makes it a natural target for trade retaliation, with Chinese officials viewing aircraft purchases as a diplomatic tool to signal displeasure with U.S. trade policies.

The company’s exclusion from the Chinese market represents a significant constraint on its growth potential, as China is expected to account for approximately 20% of global aircraft demand over the next 20 years.

Boeing’s recovery strategy must therefore focus on maximizing performance in other markets while working to eventually rebuild relationships with Chinese customers when geopolitical conditions allow.

The company’s emphasis on operational excellence, regulatory compliance, and product quality improvements positions it well for an eventual return to China, but the timing remains uncertain and dependent on broader U.S.-China relations. Analysts note that Boeing’s diversified customer base and strong positions in North America, Europe, and other Asian markets provide some insulation from Chinese market exclusion, though the long-term impact on growth potential remains significant.

The success of Boeing’s current operational improvements and the 777X program launch will be critical factors in maintaining competitive positioning for an eventual Chinese market re-entry.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.