Three Chinese airlines to purchase nearly 300 Airbus aircraft
Published: Jul 02, 2022 01:58 AM
A320NEO aircraft

A320NEO aircraft

Three state-owned airlines - China Southern, Air China and China Eastern - announced on Friday a deal with France-based Airbus to buy 292 aircraft valued at around $37 billion in total.

It is the second time China has signed such a big deal since Chinese leaders visited Europe in March 2019, when Airbus signed a deal worth tens of billions of dollars to sell 300 aircraft to China.

In spite of disagreements between China and Europe from time to time in political areas, the economic and trade ties remain tight and are mutually beneficial, Chinese observers said.

China Southern Airlines said it has signed a deal for 96 A320NEO aircraft worth a total of around $12.25 billion.

Hours later, Air China announced a deal for 96 A320NEO aircraft worth around $12.21 billion. China Eastern Airlines announced a deal for 100 A320NEO aircraft priced at around $12.79 billion.

The carriers said the new orders, which are expected to be delivered from 2024, will help increase their flying capacity and meet the renewal needs as older aircraft are retired.

China Southern said the aircraft will increase the group's flying capacity by 13 percent, and Air China said the deal will help increase flying capacity by 10.4 percent.

"It is a release of years of pent-up demand," market watcher Qi Qi told the Global Times on Friday, adding that the big purchase shows China's market potential and also the airlines' confidence in the recovery of the Chinese aviation market.

Although the aircraft will be delivered within four to five years, the deal will barely be enough to meet the demand, said Lin Zhijie, another market watcher.

It is a necessary move given China's colossal civil aviation market, Cui Hongjian, director of the Department of European Studies at the China Institute of International Studies, told the Global Times on Friday.

The European economy has been hit hard by the COVID-19 pandemic and the on-going Russia-Ukraine conflict, so the order represents good news, Cui said, adding that China and Europe have formed a good cooperative foundation in the civil aviation industry.

In May this year, top leaders from China and France held a phone conversation discussing cooperation in traditional fields, and the two sides agreed to enhance exchanges in nuclear energy, aerospace, artificial intelligence and clean energy. 

Boeing, the main competitor for Airbus, has struggled to win a big order from China recently. The last large deal was in November 2017 when China signed a purchase deal with Boeing for 300 aircraft. It came when US President Donald Trump visited China, and the order value was more than $37 billion.

Since then, Sino-US relations have become more complicated and Boeing also lost confidence in the market due to crashes. Its best-selling B737 MAX has so far failed to return to service in China and has not received new orders. There have been some small orders, such as in May 2022, when China Eastern said it would introduce 38 aircraft, including four Boeing 787s.

Airbus told the Global Times on Friday that it now has a market share of 53 percent. In 1995, its market share in China was only 9 percent.

Cui said China's civil aviation market remains open and Chinese airlines' cooperation with Boeing and Airbus has remained generally balanced as far, but it needs to be pointed out that the devastating plane crashes involving B737 jets have undermined the market's confidence toward the plane maker.

The world's two largest aircraft manufacturing giants, Boeing and Airbus, respectively released their 2021 aircraft delivery transcripts. 

Airbus delivered a total of 611 commercial aircraft to 88 customers last year, an increase of 8 percent from 2020, maintaining its position as the world's largest aircraft manufacturer for the third consecutive year. 

Boeing delivered 340 planes, about half as many as Airbus, but also recorded a significant increase compared to 2020, up 117 percent year-on-year.

With the gradual lifting of the 737MAX flight ban globally, deliveries of the 737 series have rebounded significantly, but the Boeing 787 Dreamliner has been hit by manufacturing problems and delayed deliveries.