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Airbus Nets Big Win With Orders for Nearly 300 Aircraft in China

Edward Russell

July 1st, 2022 at 9:47 AM EDT

China’s Big 3 airlines, Air China, China Eastern, and China Southern, have committed to 292 new Airbus A320neo family aircraft, further solidifying the European planemaker’s lead in Asia’s largest market. It’s also a sign of confidence by the Chinese airlines that China’s Covid-restricted travel industry will recover fully.

Beijing-based Air China, and its Shenzhen Airlines subsidiary, ordered 96 A320neo family aircraft, in one of the three deals unveiled on July 2 in China. Shanghai-based China Eastern ordered 100 A320neo family planes. And Guangzhou-based China Southern 96 A320neo family jets. Deliveries begin in 2023 for Air China, and a year later for its competitors, and run though 2027 for all three airlines.

The deals are a big win for Airbus that has been picking up marketshare from Boeing since the 737 Max grounding in 2019. The market was roughly split between models from both airframers prior to the grounding, and a U.S.-Sino trade dispute that began during the Trump administration that continues to this day. Since these dual issues, Airbus — despite facing its own challenges — has moved to ramp up production of A320neo narrowbody jets and capture share while its competitor is down.

“There is … very much a move that Airbus believes it is capturing a dominant share,” Air Lease Corp. CEO John Pleuger told The Air Current on the Chinese market in 2021. “This is the time. This is the time to go for it. And that’s actually a very natural market decision to take.”

Airbus is now in the midst of a dramatic ramp up in production that could see it produce 65 A320neo family aircraft a month by next summer, and 75 a month in 2025. The main issue that could hold the airframer back is its supply chain, which leasing companies and airlines have said is already showing signs of stress and resulting in delayed deliveries of new aircraft. Airbus has a final assembly line in Tianjin that serves the Chinese market.

Boeing, for its part, continues to await the restart of 737 Max flights in China. The country has officially moved to lift the grounding order that was put in place in March 2019, but revenue passenger flights have yet to begin. Boeing has numerous Maxes bound for Chinese airlines that are in storage.

“These new orders demonstrate the strong confidence in Airbus from our customers,” Airbus Chief Commercial Officer and Head of International Christian Scherer said in a statement. “It is also a solid endorsement from our airline customers in China of the performance, quality, fuel efficiency and sustainability of the world’s leading family of single aisle aircraft.”

Air China, China Eastern, and China Southern all say the new aircraft will be used for a mix of growth and fleet replacement. China Eastern said it plans to replace roughly 68 older A320 jets with its order for 96 new planes.

The three orders are worth more than $37 billion at list prices.

Edward Russell

July 1st, 2022 at 9:47 AM EDT

Photo credit:  Airbus

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