A huge order for Airbus A320 neo was made this Friday, July 1 by four Chinese airlines. A total of 292 aircraft have been ordered for a value of $37 billion.
Chinese airlines are buying 292 planes from Airbus for $37 billion, according to a statement from the European aircraft manufacturer. The order was placed with three Chinese companies for aircraft from its A320 neo family.
China Eastern will acquire 100 A320neo family aircraft, China Southern 96 aircraft of the same model. Air China and its subsidiary Shenzhen Airlines will acquire 64 and 32 A320neos respectively. The companies did not specify the models of the A320 family concerned, but according to a source familiar with the matter, it is both A320 and A321 that can carry more passengers, as well as a few smaller A319s.
“Positive recovery dynamic”
For Airbus, these orders, which have yet to be finalized, “demonstrate the positive recovery momentum and the prosperous outlook for the Chinese aviation market”.
All deliveries are scheduled between 2023 and 2027, which seems to indicate that the contract was negotiated for a long time, as the available delivery slots are becoming scarce for Airbus, faced with significant demand for its single-aisle aircraft.
These orders are the largest placed by Chinese airlines since the start of the COVID-19 pandemic.
On the Paris Stock Exchange, the Airbus share takes 3.4% to 95.57 euros. The European aircraft manufacturer’s order book totaled more than 8,000 orders for A320 family aircraft at the end of May.
Increase in production rates in Airbus factories
This mega-order also reinforces the ambition of the European aircraft manufacturer to increase its production rates to 75 A320 type aircraft produced per month in 2025. Two new production lines will also be opened in Toulouse and Mobile in Alabama (United States). Some suppliers, first and foremost the engine manufacturer Safran, have expressed their doubts about the advisability of such rates, due to the investments that this would require and the expected need in the long term.
Airbus had drastically reduced its production during the pandemic and began a gradual increase in production with 45 A320 Family aircraft per month at the end of 2021. It plans to produce 65 per month in the summer of 2023 despite tensions in recent months on supplies. and sometimes difficulties in hiring.
A setback for Boeing and its 737 MAX
A few days before the Farnborough International Air Show (United Kingdom), a traditional opportunity for aircraft manufacturers to announce this type of order, it is also a setback for Boeing and its 737 MAX, deemed fit to fly since December by Beijing.
The American aircraft manufacturer is counting on the huge Chinese domestic market to find colors with its single-aisle competitor to the A320. The four companies that announced the Airbus order on Friday are already MAX customers.