Airbus wins $37 Billion A320neo jet order from China’s airlines
Airbus won one of its biggest ever single-day record, selling almost 300 A320neo narrow-body jets worth more than $37 billion to four Chinese airlines in a coup for the European manufacturer in its tussle with Boeing for dominance in Asia’s largest economy.
- China Eastern Airlines will buy 100 jets.
- Air China will take 64 jets.
- Shenzhen Airlines subsidiary acquiring 32, according to separate company filings Friday.
- China Southern Airlines said earlier it would buy 96 A320neos, as well as leasing additional planes.
China, the world’s most populous nation, is a key market for Airbus and US rival Boeing, and both have worked to boost their presence there. The orders come at a time of rising political tensions between the US and China.
While travel in the country remains subdued amid Covid-related restrictions, jet orders must be made years in advance given the limited capacity of the manufacturers.
The announcements represent China’s first major jetliner orders in about three years. Boeing has historically counted China Southern as its biggest customer in the country. The airline in May removed more than 100 of the US firm’s 737 Max jets from its near-term fleet plans, citing uncertainty over deliveries.
Airbus shares gained as much as 4% and were 3.5% higher at 1:47 p.m. in Paris. Boeing shares fell 1.3% in premarket US trading.
The China Southern aircraft will be delivered from 2024 to 2027, according to a stock exchange filing Friday. The carrier will separately lease 19 A320neos. Handovers to Air China will span 2023 to 2027 and those to Shenzhen Airlines 2024 to 2026.
China Southern previously outlined plans to rapidly expand its 737 Max fleet, saying in 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 said if they might resume taking the Max once it’s officially back in service. China was the first to ground the plane following fatal crashes in Indonesia and Ethiopia.
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 arrival of engines meant Airbus was unable to deliver otherwise fully 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. Fast-growing Indian budget carrier IndiGo, operated by InterGlobe Aviation Ltd., is the world’s largest 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 SEA320 series narrowbodies at the end of last year. bloomberg.com