Deals worth billions of yuan at CIIE show Chinese players’ importance in global aviation industry
Deals worth billions of yuan show Chinese players’ importance in global aviation sector
Published: Nov 10, 2021 05:33 PM
A stewardess from China Eastern Airlines at the fourth CIIE in Shanghai Photo: Courtesy of China Eastern

A stewardess from China Eastern Airlines at the fourth CIIE in Shanghai Photo: Courtesy of China Eastern

Chinese airlines, many of which rank among the biggest players in the global aviation industry, are gearing up to purchase nearly 10 billion yuan ($1.56 billion) worth of goods and services at the 4th China International Import Expo (CIIE) in Shanghai, despite the headwinds of the industry brought by the COVID-19 pandemic.

Their procurement targets range from engine parts to maintenance service contrats, which Chinese experts said showed the global aviation industry is in close contact, in which Chinese aviation industry plays an important role.

On the first day of the event, Xiamen Airlines and CFM International formally signed a procurement and maintenance service agreement for 33 LEAP-1A engines and related aviation materials, equivalent to a total transaction amount of $1.86 billion.

China Eastern Airlines signed five orders on the first day of the fair. During the entire CIIE, China Eastern said it plans to sign 14 orders both offline and online, with a total amount of more than $1.1 billion, with vendors from six countries including Singapore, Switzerland and Germany, and the contracted orders with exhibitors accounted for nearly 70 percent, according to the release sent to the Global Times.

In the "shopping cart" of China Eastern Airlines, there are not only engine repair contracts required to keep their fleet running, but also cherries purchased from South America and deicers purchased from Europe. The value of the cherries purchased by the carrier is as high as $230 million.

China Southern Air Holding said it has signed 16 procurement agreements with 14 large international manufacturers and suppliers across the global aviation service field, including CFM International Corp and International Aero Engines. The total contract value came at $448 million.

The procurement items cover technical equipment, service contracts, and consumer goods. Among them, the single engine spare parts purchase agreement signed by China Southern and CFM International is one of the large civil aviation purchase orders signed in CIIE history, according to the note sent to the Global Times. 

Compared with previous chapters of the event, China Southern Airlines has added a new duty-free goods and data service purchases in the service trade category this year.

"The CIIE provides an excellent procurement platform for airlines, and centralized procurement is conducive to reducing overall procurement costs," Qi Qi, a market watcher, told the Global Times on Wednesday.

CIIE has provided Chinese carriers a unique opportunity to promote their brand image to the world, Qi said.

On Saturday, Commercial Aircraft Corporation of China (COMAC) signed a letter of intent with GE, CFM International, and Honeywell for a range of equipment and technical services. 

This is the fourth consecutive year that COMAC has signed purchase intentions with participating suppliers at the fair, and "the number of intentions has been increasing year by year," according to the official COMAC website.

In the past four years, through the CIIE platform, COMAC has strengthened its cooperation with foreign suppliers, maintaining and consolidating good cooperative relations with Chinese and foreign vendors, the company said.

Airbus has further consolidated cooperation with its Chinese partners. Airbus and China Southern Airlines signed modification agreement on an automated broadcast surveillance and distribution project.

The agreement covers China Southern Airlines' in-service Airbus A320 aircraft fleet, which will help the modernize development of China's civil aviation traffic management system.

Market watchers said that economic globalization and the internationalization of industrial chain are irreversible trends, and the aviation manufacturing industry is a vivid example.

Airbus has 4,500 suppliers worldwide, which are mainly distributed across 18 countries and regions, which shows that there is no mainstream civil aviation aircraft that can be independently produced and manufactured by only one country, Lin Zhijie, an industry expert told the Global Times on Wednesday.

This centralized signing is not only the epitome of global aviation's supply chain structure, but also specific measures taken by the major airlines to implement China's high-level opening up to the world, he added.

China Eastern and China Southern have also played a role in supporting CIIE's transport capacity. 

The logistics arm under China Eastern Airlines has undertaken the transport task of CIIE exhibits for four consecutive years.