The Paper reporter Shao Bingyan
The largest order in the history of China's three major aviation central enterprises went to the European aircraft manufacturing giant Airbus , which attracted widespread attention in the industry.
On the evening of July 1, China Southern Airlines (600029.SH), Air China (601111.SH) and China Eastern Airlines (600115.SH) successively announced that they planned to purchase 292 Airbus A320NEO passenger aircraft, with a total catalog price of 37.257 billion U.S. dollars, converted into more than 240 billion yuan in RMB.
Announcements from the three major airlines show that the transaction amount of the aircraft purchase contract was determined through fair negotiations between the parties signing the contract. In actual transactions, Airbus will give airlines a larger discount, so the actual price of the aircraft purchased this time will be lower than the above-mentioned basic price.
According to The Paper reporters combed through the past announcements of the three major airlines and found that this transaction is the single order with the largest quantity and the highest order amount among the three major airlines' history of aircraft purchase orders.
Why are the three major airlines placing the largest orders in history now? Why was Airbus A320NEO selected for this "group purchase" order? What does this order mean for Airbus’s biggest competitor, and Boeing ?
Why did the three major airlines sign the largest order in history at this node?
China Southern Airlines , Air China, China Eastern Airlines are my country's three major aviation state-owned enterprises, accounting for half of the country's business volume. In 2021, the total transportation turnover of the three major airlines and their subsidiaries accounted for more than 60% of the total transportation turnover of all airlines, reaching 66.3%. The operating revenue of the three major airlines totaled 243.303 billion yuan, accounting for 57.31% of the total revenue of domestic airlines.
Why did the three major aviation state-owned enterprises join forces at this time to buy planes?
Screenshot of the 2021 Civil Aviation Industry Development Statistical Bulletin
"At this order node, the vertical comparison may have a greater price advantage for airlines." Civil aviation expert Li Hanming told reporters that the current aircraft sales industry is in a downturn due to the overcapacity caused by the epidemic. , is in the stage of gradual recovery, so the discounts for the models required for purchase at the current node will be greater, which also demonstrates the confidence of the three major airlines in the growth of domestic and international travel demand for China's civil aviation after 2024.
According to the announcement, the planned delivery times for the 292 passenger aircraft planned to be purchased by the three major airlines this time are relatively close. They will all be delivered in batches. Delivery will begin in 2024 at the earliest and will be completed by 2027 at the latest.
An Airbus insider revealed to reporters that Airbus had many global orders for more than 100 aircraft last year. The orders placed by each of the three major airlines this time are not Airbus’ orders with the largest number of aircraft and the largest amount in recent years.
Qiao Shanxun, secretary-general of the Expert Committee of the Henan Aviation Industry Association and researcher at the Henan Collaborative Innovation Center for Aviation Economic Development, told reporters that the purchase of aircraft by the three major airlines and state-owned enterprises together is more like a "group purchase" activity, and the price may be more expensive than negotiating individually. Low. "The global aviation market is currently in a state of recovery, and long-term growth cannot be ignored for the sake of short-term fluctuations. Purchasing new passenger aircraft now is also to plan and reserve fleet capacity in advance."
China Eastern Airlines stated in the announcement that while the aviation market has not yet fully recovered, the company’s introduction of aircraft will help to strive for better business conditions. In this transaction, the company has obtained better than before in terms of aircraft prices and other business terms. condition.
This order is also in preparation for the update of the narrow-body aircraft of the three major airlines. China Eastern Airlines said that during the delivery period of the imported aircraft, some of the company's existing narrow-body aircraft will be withdrawn one after another due to older aircraft and expiration of leases. Therefore, this order will partially serve as a replacement and update for the existing aircraft models. China Southern Airlines stated that this order will increase China Southern Airlines Group’s capacity by approximately 13.0%. The order between Air China and Shenzhen Airlines will increase Air China Group's capacity by approximately 10.4%.
In addition, Li Hanming also mentioned that in the first half of this year, the epidemic spread in various places, and in the second half of the year, there was a blessing from the summer season. Therefore, the purchase agreement was signed in the second half of the year, perhaps because it would not increase the pressure on the performance of the three major airlines in the first half of the year. In terms of the source of funds and payment methods for the transaction, the three major airlines said that the transaction amount will be paid in installments and is not expected to have a significant impact on the company's cash flow and business operations.
All domestic airlines lost 67.09 billion yuan last year, a loss of 14.92 billion yuan less than the previous year.Among them, the three major airlines' net losses attributable to shareholders of listed companies continued to expand last year, with a total net loss of 40.959 billion yuan, accounting for more than 60% of the total losses of all airlines. In the first quarter of this year, the total revenue of the three major airlines in the first quarter was 47.054 billion yuan, with a total loss of 21.156 billion yuan.
Why did Airbus A320NEO series aircraft be selected for the three largest orders in aviation history?
Even if it is a good opportunity to launch a mobile phone right now, why did the three major airlines choose Airbus’s narrow-body aircraft A320NEO?
The A320NEO series aircraft is the latest generation of Airbus narrow-body aircraft. It is a new engine option (New Engine Option) for its best-selling A320 series aircraft. It is also Airbus' current leading product in the single-aisle narrow-body aircraft market. The
single-aisle narrow-body aircraft is the main passenger aircraft for domestic routes and short- and medium-range international routes. As of the end of 2021, the number of transport aircraft in the civil aviation industry at the end of the period was 4,054, of which 3,178 were narrow-body aircraft, accounting for nearly 80% of the transport aircraft fleet.
Screenshot of the 2021 Civil Aviation Industry Development Statistical Bulletin
Qiao Shanxun told reporters that domestic airlines have strong demand for narrow-body aircraft, and the three major airlines themselves also have large-scale narrow-body fleets. Currently, the proportion of narrow-body aircraft is 7 to 7 90%, there is a need to update old aircraft and other aspects.
The Airbus A320 and Boeing 737 are the two most popular models of single-aisle passenger aircraft in the world. This is also one of the most fiercely competitive markets between Airbus and the veteran American aircraft manufacturer Boeing.
In 2021, Airbus delivered a total of 611 passenger aircraft, while Boeing only delivered 340 aircraft in the same year. Airbus has become the world's largest aircraft manufacturer for three consecutive years. After the successive accidents of Boeing 737MAX, Airbus has become the leader in the single-aisle passenger aircraft market.
It is worth noting that Airbus A320neo series aircraft received 661 new orders in 2021. This time, China’s three major aviation state-owned enterprises placed 292 orders, equivalent to 44% of Airbus’s total orders for this model last year. Competitors of the
A320NEO series aircraft include Boeing 737 MAX and Commercial Aircraft Corporation of China 's C919. As of the end of March this year, Airbus has delivered more than 2,000 A320neo series aircraft to customers. Airbus said that the A320NEO already accounts for 60% of the market share in this class.
According to Airbus, the number of seats in the A320NEO series ranges from 120 to 220 (traditional two-class level), and the range ranges from 6,400 to 8,700 kilometers depending on the aircraft model. Compared with the current A320 series aircraft, the A320NEO can reduce fuel consumption and carbon dioxide emissions by 20%, airframe maintenance costs by 5%, and single-seat cash operating costs by 14%. Compared with competing aircraft of the same level, the A320NEO has a single-seat fuel consumption advantage of 4% to 6%, and the A321NEO's single-seat fuel consumption advantage can reach 7%. What does
mean for Boeing 737 MAX and COMAC C919?
It should be pointed out that at present, the Civil Aviation Administration of China has not fully approved the return of Boeing 737 MAX. In October 2018 and March 2019, Boeing 737 MAX8 aircraft suffered two consecutive air crashes within half a year. Many countries have announced the suspension of commercial operations of Boeing 737 MAX8 aircraft.
At present, the Boeing 737 MAX has received airworthiness approval, and domestic airlines will still need to complete aircraft modifications, grounded aircraft recovery, and driver training. The Civil Aviation Administration of China stated at the end of last year that after supplementary operation certification, it is expected to resume commercial operations of the existing domestic fleet at the end of 2021 or early 2022, and restart the introduction of new aircraft.
The C919 is a large jet passenger aircraft independently developed by my country and has independent intellectual property rights. At present, the C919 test flight certification and delivery preparations are still progressing in an orderly manner. During the 2022 Shanghai Two Sessions, Wu Yongliang, member of the Shanghai CPPCC, deputy general manager and chief accountant of Commercial Aircraft of China Co., Ltd., revealed in an interview with The Paper that delivery is expected to be completed in 2022. "The specific delivery will not be met until the certification is completed."
Regarding the impact of this Airbus order on the development of the C919 in the domestic market, civil aviation expert Lin Zhijie pointed out that this order totaled 292 aircraft, which is equivalent to the entire industry before the epidemic. The number of aircraft introduced in each year will be delivered in 4 to 5 years. The quantity will not meet the capacity needs of airlines in the next few years. Chinese airlines will also need to purchase more aircraft in the future.
Yang Yang, deputy general manager of the Marketing Center of COMAC, said at the Zhuhai Air Show at the end of September last year that the industrialization demand in the aviation market is huge, and the production capacity of Boeing and Airbus alone cannot meet the current needs of airlines. Airlines order Airplanes may be booked for 5 or 10 years. Therefore, COMAC's C919 will definitely bring at least a new choice to the air transportation industry when it is launched into the global market, and airline customers should be the biggest beneficiaries.
Senior editor of this issue Xingtan
