Three state-owned airlines – China Southern, Air China and China Eastern – announced a deal with France-based Airbus to buy 292 aircraft valued at around USD37 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. China Southern Airlines said it has signed a deal for 96 A320NEO aircraft worth a total of around USD12.25 billion. Air China announced a deal for 96 A320NEO aircraft worth around USD12.21 billion, while China Eastern Airlines' deal for 100 A320NEO aircraft is worth around USD12.79 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 and Air China said the aircraft will increase their flying capacity by 13% and 10.4% respectively.
“It is a release of years of pent-up demand,” market watcher Qi Qi told the Global Times, 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. Airbus now has a market share of 53%, up from only 9% in 1995.
Boeing, the main competitor of Airbus, has struggled to win a big order from China recently. The last large deal was in November 2017 when China agreed to purchase 300 aircraft. It came when U.S. President Donald Trump visited China, and the order value was more than USD37 billion. Since then, Sino-U.S. 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. Following the Airbus deal, Boeing commented that “geopolitical differences” are constraining its exports and calling for a “productive dialogue” between the Chinese and U.S. governments.
Airbus delivered a total of 611 commercial aircraft to 88 customers last year, up 8% from 2020, maintaining its position as the world's largest aircraft manufacturer for the third consecutive year. Boeing delivered 340 planes, but also recorded a significant increase compared to 2020, up 117% year-on-year, the Global Times reports.
