Chinese state airlines to buy almost 300 Airbus jets
By: CNBC - No Author Indicated
S E E D E D C O N T E N T
Chinese state airlines to buy almost 300 Airbus jets
- China’s “Big Three” state airlines pledged on Friday to buy a total of almost 300 Airbus jets.
- China has largely stood back from the global jet market amid Covid-19 and trade tensions with the United States.
- Boeing said it is “disappointing that geopolitical differences continue to constrain U.S. aircraft exports.”
China’s “Big Three” state airlines pledged on Friday to buy a total of almost 300 Airbus jets, the biggest order by Chinese carriers since the start of the COVID-19 pandemic and a breakthrough for Europe as Boeing remains partially frozen out of China.
In apparently coordinated announcements, Air China and China Southern Airlines said they would each buy 96 A320neo-family jets worth $12.2 billion at list prices. China Eastern Airlines said it would buy 100 airplanes of the same type, worth $12.8 billion.
Airlines typically receive substantial discounts to list prices and China Eastern said these were larger than usual.
China’s huge market accounts for a quarter of Airbus and Boeing deliveries in a normal year. But China has largely stood back from the global jet market as it juggled both the impact of COVID-19 and protracted trade tensions with the United States.
Industry sources said Beijing broadly balances jet purchases between Europe and the United States over time, with such large deals typically held in reserve for state visits.
But Friday’s deal signaled a visible step towards Beijing’s European supplier, they said. Until now, global trade and diplomatic tensions have broadly had the effect of delaying politically sensitive import decisions across the board.
Boeing reacted sharply to the announcement, unusually crediting “constructive dialog” between European governments and Beijing for the blockbuster order and urging the U.S. and Chinese governments to engage in productive discussions.
“As a top U.S. exporter with a 50-year relationship with China’s aviation industry, it is disappointing that geopolitical differences continue to constrain U.S. aircraft exports,” Boeing said in an emailed statement.
“Boeing aircraft sales to China historically support tens of thousands of American jobs, and we are hopeful orders and deliveries will resume promptly.”
Boeing’s 737 Max has yet to resume commercial flights in China, even though the country joined other regulators late last year in lifting a grounding order imposed during a safety crisis .
So far this year, Boeing has delivered only one commercial jet to China against 47 for Airbus. It has about 150 airplanes waiting to be delivered to China, according to some estimates.
Airbus painted the win as a purely commercial victory, saying it demonstrated “strong confidence in Airbus.” In a statement, it said the deal followed “long and extensive discussions” but did not mention any diplomatic support.
One diplomatic source played down any political involvement but noted challenges in ramping up output to deliver such a large number of planes while global supply chain problems persist.
The deal is subject to Chinese government approvals.
Airbus shares rose more than 3%. Boeing rose around 1.3% after slipping in pre-market trading.
China’s airline industry, which took a heavy hit after authorities locked down Shanghai in April, has been steadily recovering in recent weeks.
China Eastern said the new narrowbody jets would be mostly deployed on domestic routes and on flights to neighboring countries.
Deliveries will run from 2023 to 2027, with the bulk expected from 2024. Air China said its purchase would represent a 10.4% increase, while China Southern expects a 13% increase.
China Eastern has been roiled by the crash of a Boeing 737-800 jet in March, killing 132 people on board. Investigators are examining the actions of the crew, with no evidence found of a technical malfunction, people briefed on the matter have said.
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What a shame, eh? So many jobs and so many billions of dollars lost. When I read the article I immediately thought of it as yet another example of Life Imitating Art (most people only think that Art Imitates Life), and in this case I was thinking of the movie Pretty Woman. If you have seen that movie (and I think most people have), Vivian (Julia Roberts), armed with the credit card belonging to the wealthy Edward Lewis (Richard Gere) goes on a clothes shopping trip on Rodeo Drive. She first goes into a woman's clothing store where the staff humiliates her, so she goes elsewhere and purchases thousands of dollars worth of clothes, then returns to the first store, shows her multiple packages and the beautiful new clothes she is wearing to those insulting staff members and asks them if they work on commission, and says, "Too bad".
Some of you just might understand the "geopolitical" point I was making.
Up to this point China has divided its airplane purchases between Boeing and Airbus. No doubt some of the things that America has been doing designed to demonize and "contain" China, meant to harm China, recruiting other nations to pressure China, interfering with China's domestic affairs, maintaining tariffs, banning Chinese products and banning doing business with Chinese companies is bound to have consequences.
I wouldn't worry too much about Boeing they have over 3,000 planes on back order and their military arm is booming.
Then China did them a favour, letting them focus on bringing their back orders up to date. They should have thanked China instead of reacting sharply to the announcement.
That's not how it works, Buzz.
There are dubious orders in those totals that will cancel.
You should re-read what you quoted, Boeing didn't criticize China they said it was constructive dialog between European governments and Beijing for the blockbuster order.
Airbus has a facility in Mobile Alabama that will probably be producing a percent of that order.
Maybe there's a lesson to be learned from that.
The first lesson would be to carefully read what you quote to be sure you got it right...LOL
At least I read and reply to what is directed to me.
Congratulations