This is the 500th aircraft delivered by the Asian final assembly line of Airbus A320 series aircraft. Xinhua News Agency issued
China Airlines A320NEO aircraft.
Airbus has won one of the largest orders in its history.
On the evening of July 1st, Air China, China Eastern Airlines, China Southern Airlinesall three state-owned airlines announced that they had signed an aircraft ordering agreement with European Airbus and would purchase 292 A320NEO series aircraft. The total transaction amount Approximately 37.257 billion U.S. dollars (converted to approximately 249.5 billion yuan in RMB).
Since the beginning of 2020, market demand in the air transport industry has shrunk rapidly, and the entire industry has been plunged into a "cold winter." What signal does the three major airlines send out by purchasing aircraft in such a large amount?
join hands to buy an airplane!
Air China said that the company and its wholly-owned subsidiary Air China Import and Export Co., Ltd. purchased 64 Airbus A320NEO series aircraft from Airbus ; the company's holding subsidiary Shenzhen Airlines Co., Ltd. purchased 32 Airbus A320NEOs from Airbus. series of aircraft. The base price is approximately US$12.213 billion.
China Eastern Airlines said that the company purchased 100 A320NEO series aircraft from Airbus at a basic price of approximately US$12.796 billion.
China Southern Airlines said it signed an agreement with Airbus on July 1 to purchase 96 A320NEO series aircraft from Airbus at a basic price of approximately US$12.248 billion.
Public information shows that the A320NEO is an improved model of the Airbus A320 series aircraft, equipped with new high-efficiency engines and sharklets. By 2020, the single-seat fuel efficiency of Airbus A320NEO series aircraft will be 20% higher than that of the current A320NEO series, mainly due to cabin optimization and further engine improvements.
According to Caijing.com, affected by the epidemic, China Southern Airlines, Air China, and China Eastern Airlines all suffered losses of more than 10 billion in 2021. Among them, China Southern Airlines’ operating income in 2021 was 101.644 billion yuan, a year-on-year increase of 9.81%; the net profit loss attributable to shareholders of listed companies was 12.103 billion yuan. Air China achieved operating income of 74.532 billion yuan, a year-on-year increase of 7.23%; the net profit loss attributable to shareholders of listed companies was 16.642 billion yuan. China Eastern Airlines' operating income was 67.127 billion yuan, a year-on-year increase of 14.48%; the net profit loss attributable to shareholders of listed companies was 12.214 billion yuan. Why buy
at the same time?
Public information shows that this transaction is the largest single order in terms of quantity and value in the history of the three major airlines. The
annual report shows that as of December 31, 2021, China Eastern Airlines has 358 A320 series aircraft, including 113 of its own; China Southern Airlines has 334 A320 series aircraft, including 116 self-purchased aircraft; Air China has a total of 287 A320/A321 series aircraft. , including 96 of its own.
As for the main reason for purchasing the aircraft this time, the three major airlines generally stated that this aircraft transaction is in line with the company’s “14th Five-Year Plan” development plan and market demand. Based on confidence in the future development of the civil aviation industry, the company needs to evaluate fleet capacity in advance. Carry out planning and reserves to optimize fleet structure and long-term capacity replenishment.
Li Xiaojin, director of the Institute of Aviation Economics at the Civil Aviation University of China, said that after three years of the epidemic, many domestic and foreign airlines have canceled or postponed aircraft purchase plans. Currently, the three major airlines can obtain larger discounts for collective purchases. In addition, the current purchase of Boeing aircraft may face risks caused by some non-economic factors, so purchasing more Airbus aircraft is a necessary measure to ensure safety for the development of China's civil aviation.
Where does the money come from?
A staff member of China Southern Airlines pointed out, "(Funding source issue) You can continue to pay attention to our announcements in the past two days. Relevant colleagues are taking charge."
China Eastern Airlines stated in the announcement that it will use its own funds and commercial bank loans. , the proceeds from the issuance of bonds and other financing instruments provided funds for this transaction.
Civil aviation expert Lin Zhijie said that this transaction will definitely put some pressure on the airlines’ funds, “But it’s okay. On the one hand, the three major airlines do not have much financial pressure, and they have strong financing capabilities; on the other hand, aircraft The purchase funds are not paid in full at once, but are paid in installments, so the pressure is not that great in the short term.”
Announcements from the three major airlines showed that the transaction amount of the aircraft purchase contract was determined through fair negotiations between the parties signing the contract. In the actual transaction, Airbus will give the airline a larger discount, so the actual price of the aircraft purchased this time will be lower than the above-mentioned basic price.
The three airlines have slightly different delivery arrangements. Among them, Air China's order is planned to be delivered in batches from 2024 to 2026; China Eastern Airlines' order is planned to deliver 28 aircraft in 2024, 31 aircraft in 2025, 34 aircraft in 2026, and 7 aircraft in 2027; China Southern Airlines plans to deliver 7 aircraft in 2027; 30 aircraft will be delivered in 2024, 40 aircraft in 2025, 19 aircraft in 2026, and 7 aircraft in 2027.
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US Boeing Company: Disappointing
Regarding the purchase of 292 Airbus A320NEO aircraft from Airbus by three Chinese airlines, according to Reuters report, the US Boeing Company said on the 1st local time that it was "disappointing" ”, declared that “geopolitical differences continue to restrict the export of U.S. aircraft” and urged “productive dialogue” between the United States and China.
An article published by Bloomberg in the United States on the 1st was titled " Airbus won the US$37 billion Chinese jet deal's impact on Boeing Company ", which directly pointed out the impact of the China-Europe procurement contract on the US Boeing Company. huge impact.
A few days ago, an article on the US Politico website seemed to want to use smearing against Airbus to find excuses for Boeing's declining market share in China. The title of the article was actually "European Union Airbus has deep ties with China's military-industrial complex, report says" and said that although Boeing's aircraft sales in China were affected by the U.S.-China trade war under former U.S. President Trump A blow, but Airbus has had more success in China. Since entering the Chinese market in the mid-1980s, Airbus has completed localization like several other multinational companies. According to a new report from American consulting firm Horizon Advisory, Airbus has chosen to build its only non-European wide-body A330 passenger aircraft final assembly line in Tianjin.
In this regard, some people believe that the American media is full of "envy, jealousy and hatred" for Airbus's development in China, and thus the so-called "European companies have connections with the Chinese military-industrial complex" is completely unreasonable hype and simply worthless. barge. Factors such as product performance are an important basis for Chinese airlines to choose to cooperate with Airbus. The US media does not reflect on Boeing's problems in aircraft performance, safety and other aspects, but blindly hypes the dispute between China and Europe from a geopolitical perspective. Civil aviation procurement cooperation cannot solve the practical dilemma of declining market share in China.
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What is the Airbus A320NEO?
A320NEO is a single-aisle mainline passenger aircraft produced by French Airbus based on the original A320 model, after replacing the engine and making other improvements. After
was replaced with a new engine, after operational testing, it was able to save an average of 14% in fuel compared to the A320CEO (which is the version of the old engine). To put it bluntly, it is more economical, so it is very popular among airlines around the world.
I bought so much at one time and I’m short of planes?
There is not a shortage of aircraft, but there are a considerable number of old A320 series that need to be updated.
For example, China Eastern Airlines has 246 A320 series aircraft (A319, A320, A321, A320NEO), but more than 20 A320s are about 20 years old and are about to be retired; 77 A321s will also enter the update cycle. , which requires the continuous delivery of new A320NEO series.
Moreover, the global aviation industry is still in the recovery stage of the epidemic, and the discounts obtained by placing large orders will not be small. In a word: a good deal.
Where are these aircraft produced?
Airbus produces A320 series passenger aircraft in 4 final assembly lines, namely in Toulouse headquarters in France, Hamburg in Germany, Mobile in the United States, and Tianjin in China. The Tianjin final assembly line was put into operation in 2008 and has delivered more than 500 A320 series passenger aircraft, including the A320NEO series. These passenger planes are basically delivered to Chinese airlines. Does
have any impact on domestic C919?
The domestically produced C919 and the Airbus A320NEO series and Boeing 737MAX series are aircraft of the same level and must compete with each other. We started late, and the C919 is still in the critical stage of verification and certification. If everything goes well, the first mass-produced C919 can be delivered to China Eastern Airlines for operation by the end of this year. But there is still a long way to go, including increasing production and operating cost scale. During this process, it is impossible for our airline not to develop and wait for more C919s to roll off the production line and be delivered. Therefore, I do not think that the purchase of 292 Airbus A320NEOs this time will have a great impact on the commercial prospects of the C919.
Of course, with competitors like the A320NEO, the C919 is really "Alexander" if it wants to enter the international market in the future. Only when we have done a good job in receiving, operating, and maintaining domestic airlines and have good data and performance can we be able to fly far and wide.
What to do about Boeing 737MAX passenger plane?
The Boeing 737 MAX series was grounded worldwide after suffering two fatal crashes. Operations have been gradually resumed since the end of 2020, but they are still in the grounding stage in China. China's three major airlines, plus Shandong Airlines, Shenzhen Airlines, and other airlines, currently have 96 737MAX parked at the airport. At the Boeing factory in the United States, there are still more than 100 aircraft to be delivered.
Since the fatal air crash, Boeing has not received any orders from Chinese airlines. There are other factors involved. From a certain perspective, Airbus's 292 new orders this time are also "filling in the gaps" in the capacity space where the 737MAX continues to be grounded.
