Chinese airlines orders 292 Airbus A320neo aircraft

Airbus SE won one of its biggest-ever orders for 292 airliners worth more than USD 37 billion from four Chinese airlines, a coup for the European manufacturer as it tussles with Boeing Co. for dominance in Asia’s largest economy.

China Eastern Airlines Corp. will buy 100 A320neo narrow-body jets, while Air China Ltd. will take 64 units, with its Shenzhen Airlines subsidiary acquiring 32 more, according to separate company filings. China Southern Airlines Co. said earlier it would buy 96 A320neos, as well as lease additional planes.

The announcements represent China’s first major jetliner orders in about three years and help cement Airbus’s position in the market, where the European manufacturer has built an advantage thanks to a local final assembly line.

Chinese airlines orders 292 Airbus A320neo aircraft (Image Courtesy – AeroTime Hub)

Boeing has historically counted China Southern as its biggest customer, but business has slowed for the manufacturer in the wake of two crashes of its best-selling 737 Max model and as political tensions rise between Washington and Beijing. 

Boeing reacted sharply to the announcement, unusually crediting “constructive dialogue” between European governments and Beijing for the blockbuster order and urging the U.S. and Chinese governments to engage in productive discussions.

The orders were announced to add to robust demand from China. Airbus secured a USD 35 billion jet deal during a state visit by President Xi Jinping to the French capital in March 2019. Both manufacturers will be vying for more business at the Farnborough Air Show, which kicks off in the middle of the month at a venue south of London.

Boeing has counted China Southern as its biggest customer, but business has slowed for the manufacturer in the wake of two crashes of its best-selling 737 Max

Airbus gained as much as 4.9% in Paris. Boeing rose as much as 3.7% in US trading.

The China Southern aircraft will be delivered from 2024 to 2027, according to a stock exchange filing Friday, July 1. The carrier will separately lease 19 A320neos. Handovers to Air China will span from 2023 to 2027 and those to Shenzhen Airlines from 2024 to 2026.

China Southern in May removed more than 100 of the US firm’s 737 Max jets from its near-term fleet plans, citing uncertainty over deliveries. The airline previously outlined plans to rapidly expand its 737 Max fleet, saying in March that 39 were due this year, building toward a total of 103 deliveries through 2024. 

Airbus secured a USD 35 billion jet deal during a state visit by President Xi Jinping to the French capital in March 2019.

None of China’s other state-owned carriers has said if they might resume taking the Max once it’s officially back in service. China was the first to ground the plane following fatal crashes in Indonesia in October 2018 and Ethiopia in March the following year.

Still, Boeing managed to outsell Airbus in 2021 for the first time in three years on demand for the 737 Max. The planemaker notched 909 gross orders in 2021, compared with 771 sales at Toulouse, France-based Airbus.

Since the Max grounding, Airbus has surged ahead of Boeing in grabbing orders and market share for narrowbody jets, even as the European planemaker struggles with ramping up production to meet surging demand. Last month, Chief Executive Officer Guillaume Faury said a delayed arrival of engines meant Airbus was unable to deliver otherwise fully built jets. 

At the end of 2021, China Southern — the country’s largest airline — had a fleet of 399 Boeing narrowbodies

To meet its growing backlog, Airbus is pushing ahead with ambitious plans to ramp up production of its bestselling A320 family of jets to 75 a month by 2025 as it looks to widen its lead. Airbus wants to begin making the larger A321neo at its site in Tianjin by year-end. 

Fast-growing Indian budget carrier IndiGo, operated by InterGlobe Aviation Ltd., is the world’s largest customer for A320neos, having ordered 730 of those jets.

At the end of 2021, China Southern — the country’s largest airline — had a fleet of 399 Boeing narrowbodies, according to its latest annual report. It also had 334 Airbus A320 series narrowbodies at the end of 2021. 

China Eastern has been roiled by the crash of a Boeing 737-800 jet in March, killing 132 people on board.

ALSO READ – China Eastern B737-800 crash – here’s what is known so far

China Eastern has been roiled by the crash of a Boeing 737-800 jet in March, killing 132 people on board. Investigators are examining the actions of the crew, with no evidence found of a technical malfunction, people briefed on the matter have said.

ALSO READ – Airbus plans to increase production of its single-aisle narrowbody A320-family jets in 2023

ALSO READ – The Airbus-Boeing duopoly – can it ever be broken?

(With Inputs from Bloomberg)

Cover Image – Nathan Walkowiak (Flickr)

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