Airbus SE won one of its biggest-ever orders for 292 airliners worth more than $37 billion from four Chinese airlines, a coup for the European manufacturer as it tussles with Boeing Co. for dominance in Asia’s biggest economy.
China Eastern Airlines Corp
will purchase 100 A320neo narrow-body jets, while Air China Ltd. will take 64 units, with its Shenzhen Airlines subsidiary acquiring 32 more, according to separate company filings Friday. China Southern Airlines Co. told earlier it would purchase 96 A320neos, as well as lease additional planes.
The statements represent China’s first major jetliner orders in about three years and help cement Airbus’s position in the market, where the European manufacturer has built an advantage thanks to a local final assembly line. Boeing has historically counted China Southern as its biggest customer, but business has slowed for the manufacturer in the wake of two crashes of its best-selling 737 Max model and as political tensions rise between Washington and Beijing.
“Airbus has long had a stronghold in China when it arrives at short-haul flights and they also have a plant there, so they have a strong mix of production and sales,” told John Strickland, an aviation analyst at JLS Consulting. “So this makes upon that.”
Airbus secured a $35 billion jet agreement
The orders declared today to add to robust orders from China. Airbus secured a $35 billion jet agreement during a state visit by President Xi Jinping to the French capital in March 2019. Both manufacturers will be vying for more business at the Farnborough Air Show, which kicks off in the center of the month at a venue south of London.
Airbus gained as much as 4.9% in Paris. Boeing rose as much as 3.7% in US trading.
The China Southern aircraft will be delivered from 2024 to 2027, according to a stock deal filing Friday. The carrier will separately lease 19 A320neos. Handovers to Air China will span from 2023 to 2027 and those to Shenzhen Airlines from 2024 to 2026.
China Southern in May released more than 100 of the US firm’s 737 Max jets from its near-term fleet plans, citing delays in deliveries. The airline previously outlined plans to rapidly expand its 737 Max fleet, saying in March that 39 were due this year, building toward a total of 103 deliveries through 2024.
None of China’s other state-owned carriers have stated if they might restart taking the Max once it’s officially back in service. China was the first to ground the plane following fatal crashes in Indonesia in October 2018 and Ethiopia in March the next year.
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Still, Boeing handled to outsell Airbus in 2021 for the first time in three years on demand for the 737 Max. The planemaker notched 909 gross orders last year, compared with 771 deals at Toulouse, France-based Airbus.
Since the Max grounding, Airbus has surged ahead of Boeing in grabbing orders and market share for narrowbody jets, even as the European planemaker struggles with ramping up production to meet surging demand. Last month, Chief Executive Officer Guillaume Faury said a delayed coming of engines meant Airbus was unable to deliver otherwise completely built jets.
To meet its growing backlog, Airbus is pushing ahead with ambitious plans to ramp up production of its bestselling A320 family of jets to 75 a month by 2025 as it looks to widen its lead. Airbus wants to begin making the larger A321neo at its site in Tianjin by year of the end.
Fast-growing Indian budget carrier IndiGo, managed by InterGlobe Aviation Ltd., is the world’s biggest customer for A320neos, having ordered 730 of those jets.
At the end of 2021, China Southern — the country’s largest airline — had a fleet of 399 Boeing narrowbodies, according to its latest annual report. It also had 334 Airbus A320 series narrowbodies at the end of last year.
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