Airbus sells 292 A320 aircraft to four Chinese airlines in a blow to Boeing, as US-China tension tips balance in European maker’s favour
Airbus has secured a bulk order for 292 of its A320 single-aisle aircraft from four Chinese airlines, as deteriorating US-China relations tipped the balance for aviation sales in the European manufacturer’s favour, dealing a blow to the American rival Boeing.
China Southern Airlines, Air China, China Eastern Airlines and Shenzhen Airlines are the four carriers buying the aircraft, Xinhua News Agency said. Details of how the bulk order would be allocated, and the price paid for each aircraft, were not immediately available.
The bulk order was close on the heels of China Southern‘s decision in May to scrap more than 100 of Boeing’s 737 MAX aircraft – the direct competitor to A320 – from its fleet plan, as the nation’s largest carrier cited “uncertainty over deliveries.”
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The Guangzhou-based airline, the very first to ground the 737 MAX in 2019 after back-to-back fatal crashes over five months by other carriers in Indonesia and Ethiopia, will reduce deliveries from Boeing to 78 planes through 2024, from 181 during a March forecast.
An A320 aircraft at the final assembly workshop at Airbus’ facilities in Tianjin on 1 March 2016. Photo: EPA alt=An A320 aircraft at the final assembly workshop at Airbus’ facilities in Tianjin on 1 March 2016. Photo: EPA>
The A320 aircraft, a single-aisle jet that can carry between 150 and 180 passengers depending on configurations, is listed at US$101 million each. Bulk purchases are entitled to steep discounts from catalogue prices, and the aviation industry’s rule of thumb halves the total list price for an estimate of the order’s value.
China’s state-owned airlines have 2,070 Airbus jets in their combined fleet at the end of May, according to the Chinese civil aviation regulator.
The decision to add more Airbus planes over Boeing tips one of the most lucrative big-ticket deals in global commerce in Europe’s favour, taking it off the negotiation table as the US and China remain mired in trade disputes left over from the Trump era. US-China relations are at the lowest point in more than four decades as disputes rage over a range of issues from the trade war to tension over the Taiwan Strait and the South China Sea.
An Airbus A320-200 carrying the livery of China Eastern Airlines, making its approach at Chiangmai Airport from Shanghai, on 12 October 2016. Photo: Shutterstock alt=An Airbus A320-200 carrying the livery of China Eastern Airlines, making its approach at Chiangmai Airport from Shanghai, on 12 October 2016. Photo: Shutterstock>
“As a top US exporter with a 50-year relationship with China’s aviation industry, it is disappointing that geopolitical differences continue to constrain US aircraft exports,” a Boeing spokesperson said on Friday in a statement, according to Bloomberg.
The plane maker continued to urge a productive dialogue between the governments of the US and China, according to a Reuters report.
China Eastern’s choice may be more immediate. The Shanghai carrier is still investigating the cause of a fatal crash of flight MU5735, a service flown on Boeing’s older workhorse aircraft 737-800, which killed all passengers and crew on board when it crashed into the mountains of Guangxi region in March.
Airbus’ A320neo passenger plane before a test flight on July 1, 2014 at the Airbus plant in Saint-Martin-du-Touch, near Toulouse, southern France. Photo: Agence France-Presse. alt=Airbus’ A320neo passenger plane before a test flight on July 1, 2014 at the Airbus plant in Saint-Martin-du-Touch, near Toulouse, southern France. Photo: Agence France-Presse.>
The bulk order showed how China – the world’s second-largest aviation market after the United States – is showing “momentum” in its recovery from the travelling slump caused by the Covid-19 pandemic, Airbus said.
China is the fastest growing aviation market for both Airbus and Boeing, where both manufacturers have established finishing assemblies – Airbus in Tianjin, Boeing in Zhoushan – to assemble the aircraft closer to their customers.
They must also compete with China’s ambition for a piece of the global aviation market via the locally assembled Comac C919, which completed its first pre-delivery test flight in May.
“These new orders demonstrate the strong confidence in Airbus from our customers,” Airbus’ Chief Commercial Officer Christian Scherer said in a press release.
There are early signs that China’s strict control of international flights arrival over the past two years as part of Beijing’s attempt to contain the Covid pandemic is gradually easing due to the economic costs involved. The country’s biggest airlines such as Beijing-based Air China and Shanghai’s China Eastern have sunk into two straight years of losses by the end of 2021.
Dozens of grounded Boeing 737 MAX aircraft parked at the Grant County International Airport in Moses Lake, Washington state in the U.S. on November 17, 2020. Photo: Reuters. alt=Dozens of grounded Boeing 737 MAX aircraft parked at the Grant County International Airport in Moses Lake, Washington state in the U.S. on November 17, 2020. Photo: Reuters.>
The Civil Aviation Administration of China (CAAC) is in talks with its counterparts in Vietnam and Thailand to allow their respective airlines to increase passenger flights to two each week from one, according to media reports in June.
The CAAC said it was negotiating with selective countries to gradually and steadily increase regular international passenger flights, a move that would be conducive for the sustainable development of the industry, according to a report by Global Times, citing CAAC’s official Liang Nan during a media briefing last month.
Total demand for global air travel in April, as measured in revenue passenger kilometres (RPKs) terms, was up 78.7 per cent from the same month a year ago, as recovery in air travel continued after more countries lift Covid-related border restrictions, according to data from the International Air Transport Association (IATA).
Contrasting the growth however was China, as continuing strict restrictions with its nearly two-month lock-down of Shanghai since April to contain the omicron variant brought its domestic traffic down 80.8 per cent year-on-year, IATA data shows.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
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