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Chinese airlines book $37b Airbus orders

By ZHU WENQIAN/ZHONG NAN | China Daily Global | Updated: 2022-07-04 09:10

Four Chinese airlines have signed deals to buy nearly 300 A320neo planes from the European aircraft maker Airbus, as the aviation industry continues to recover from COVID-19.

The deals, worth $37 billion in total based on catalog price, are the biggest new aircraft orders placed by Chinese carriers since the pandemic broke out. The purchase came after a bumper year for Airbus, which posted record profits in 2021 after two years of sluggishness because of the pandemic. It has also given Airbus another boost over its US rival Boeing.

Air China has ordered 64 A320neo aircraft, its holding subsidiary Shenzhen Airlines 32, China Eastern Airlines 100 and China Southern Airlines 96. The new aircraft are due to be delivered between 2024 and 2027, the airlines and Airbus said on Friday.

Boeing said it is disappointing that geopolitical differences continue to constrain US aircraft exports, and it called for productive dialogue between the US and China.

Cui Hongjian, director of the European studies department at the China Institute of International Studies in Beijing, said: "The purchase has been a commercial decision. When Chinese airlines buy aircraft, they have to consider safety and reliability. The impact of the safety issues of Boeing models has not passed completely."

The Boeing 737 Max was grounded worldwide after two fatal crashes, in 2018 and 2019. The Civil Aviation Administration of China issued an airworthiness certificate for the aircraft in December but it has yet to resume flying in the country.

"There are also geopolitical aspects to this," Cui said. "There's a lack of trust between China and the US at the moment, and if Chinese airlines become long-term customers of Boeing, there's a risk of being cut off from the supply of aircraft parts and technical support. There are no such concerns with Airbus."

Over the past decade, Airbus has continued to increase its investment in China and has worked more closely with local industry. Late last month, the company signed a framework agreement with Suzhou Industrial Park on setting up a research center there that would specialize in research about hydrogen-powered aircraft.

At the end of May, the fleet size of Airbus in the Chinese mainland exceeded 2,070, a market share of 53 percent. For single-aisle aircraft, the market share was about 55 percent, and for widebody aircraft about 61 percent, Airbus said. Boeing did not disclose its fleet size in China.

Lin Zhijie, an aviation industry analyst and a columnist for Carnoc, a civil aviation website in China, said: "Nearly 300 new plane orders is equivalent to the number of new aircraft introduced in a year for the whole sector in China before the pandemic. It shows that major domestic carriers are optimistic about the air travel market recovering.

"The new aircraft will be delivered in four to five years, and the volume still cannot meet the demand for air transportation capacity in China in the next few years. Chinese carriers are likely to buy more aircraft."

China will need nearly 6,500 single-aisle aircraft by 2040, Boeing forecast last year. Airbus has forecast that about 6,900 single-aisle jets will be needed in China over the next 20 years.

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