Shanghai authorities unveiled measures for equipment swaps in the transport sector, including a call for airlines based in the city to procure new, more environmentally friendly aircraft and retire less fuel-efficient ones. Shanghai’s action comes after the central government identified large-scale equipment renewal and the trade-in of consumer goods as potential sources of growth for consumption and spending in March. Under Beijing’s initiative, localities were encouraged to implement the guideline with proposals tailored to their industries. Shanghai, which saw more passengers and cargo move through its airports than any other Chinese city in 2023 and the first half of 2024, is well positioned to motivate its airlines to refresh their fleets.
China Eastern Airlines, the country’s second-largest carrier by fleet size, is headquartered in the city and has 620 planes in operation. It has announced orders for 105 units of the C919 – narrow-body planes made by the Commercial Aircraft Corporation of China (Comac) in Shanghai – with seven already delivered. The average age of China Eastern’s Airbus A320 and Boeing 737 models – which the C919 has been positioned to compete with – is more than 10 years. Shanghai Airlines, a subsidiary of China Eastern, operates 85 planes, with expansion plans in the works. Suparna Airlines, also based in the city, has been confirmed as the first private carrier to commit to a C919 purchase, and has expressed interest in operating a C919-only fleet. Juneyao Air, another carrier in the city, will also receive at least three planes from Boeing and five from Airbus this year. A lecturer with Shanghai Civil Aviation Polytechnic College said airlines in the city are already renewing their fleets, and the government’s recommendation can dovetail with the process.
“The total value of the 200 new aircraft could be from CNY120 billion to CNY150 billion and new aircraft orders can spawn business along the long, sophisticated industrial chain,” said the lecturer, who requested not to be named as he was not authorized to speak to the media. But government edicts, he said, should not affect or dictate airlines’ business decisions. “In a highly competitive industry like aviation, carriers must weigh a plethora of factors before they commit to new purchases and decide when to place orders and take deliveries,” he added. “Different companies will have different plans.”
Mayur Patel, head of Asia for OAG Aviation, a Singapore-based air travel data provider, said when an airline makes fleet decisions, several variables come into play: demand growth, fleet age and type, route and network strategy. These factors are interrelated, and airlines must carefully balance them to make strategic fleet decisions,” said Patel, adding that aviation specialists are the people best suited for the job. Shanghai has made aviation and plane manufacturing a pillar industry as it strives to meet its economic growth target and contribute to reaching the national goal of “around 5%”, the South China Morning Post reports.
