Why did the three major airlines purchase 292 Airbus planes to reach the largest order in history? – IT & Transport – Aviation

On July 1, the three largest domestic airlines, China Southern Airlines, Air China and China Eastern Airlines, announced that they signed an aircraft purchase agreement with the European aircraft manufacturing giant Airbus – a total of 292 A320NEO series aircraft were purchased, and the total purchase amount It will reach 37.257 billion US dollars (about 249.1 billion yuan).


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This transaction is the largest single order for aircraft purchases in the history of the three major airlines, with the largest quantity and the highest order value. It is also the first large-scale passenger aircraft order announced by the Chinese civil aviation industry in the past three years.

Why did the three major airlines reach the largest order in history at the moment? Why did this “group purchase” order choose the Airbus A320NEO? 249.1 billion yuan is not a small amount. Under the influence of the epidemic, where does this money come from? Does the large-scale purchase of aircraft in the sluggish aviation industry send a signal of a full recovery of China’s civil aviation industry?

Why buy it?

Optimizing fleet structure and long-term capacity replenishment are the main reasons

At present, the aviation market has not fully recovered, so why did the three major airlines sign the largest order in history at this node?

Qi Qi, an expert from the China Civil Aviation High Quality Development Research Center and associate professor of Guangzhou Civil Aviation Vocational and Technical College, said: “It can be said to be a compensatory consumption. Because there are many uncertainties during the entire epidemic, it is difficult for airlines to make a decision. The number of large-scale purchases of aircraft, at present, we see the whole signal of aviation recovery is relatively strong. At this moment, airlines are buying relevant aircraft in large quantities, which is actually a very important manifestation of market confidence. “

The reporter noticed that in the announcements of the three airlines, the main reasons for the purchase of the aircraft were mentioned, that is, the aircraft transaction was in line with the company’s “14th Five-Year Plan” development plan and market demand, and the company needed to plan the fleet capacity in advance. and reserves, optimizing fleet structure and long-term capacity replenishment. Air China said that the introduction of new aircraft will be concentrated after 2024, and this transaction will increase the group’s capacity by about 10.4%. China Eastern Airlines stated that after the introduction of this aircraft, it will be mainly used in the domestic trunk network market to encrypt high-yield routes and develop potential markets. According to China Southern Airlines, the purchase of 96 A320NEO series aircraft will increase the Group’s capacity by approximately 13.0%.

Why buy now?

More bargaining power, the purchase price is more favorable

The market’s consumption potential and confidence are continuously increasing, but at present, China’s civil aviation industry has not fully recovered to the level before the epidemic, and the overall seat capacity level that the industry can provide is still much higher than the current market demand. So is it necessary to order so many new planes now? In this regard, experts said that the replacement of old and new aircraft can promote the metabolism of the industry. In the future, the aviation market will be huge, and China needs to continuously increase new capacity to keep the airline fleet young.

Experts said that due to the impact of the epidemic, the introduction of aircraft by the three major airlines has slowed down significantly in the past two years. Taking Air China as an example, by the end of 2021, its fleet will be 746 aircraft, a net increase of 52 aircraft over the end of 2019. The average annual introduction rate is between 1% and 3%, which is quite different from the previous rate of 6% to 8%.

Qi Qi believes that many domestic models are relatively old. In the aviation field, new aircraft will be much better in fuel economy than older models, which also prompts airlines to accelerate the iteration of old models. old model. In addition, with the market recovery and business development, the domestic aviation market also needs to continuously add new capacity.

The transaction amount of this large passenger aircraft order is nearly 250 billion yuan. However, the three major airlines all said that Airbus will give a larger discount in the actual transaction, and the actual price of purchasing the aircraft will be lower than the above-mentioned basic price. Therefore, experts also speculate that with a more favorable purchase price, airlines have more bargaining power in purchasing new aircraft at this node, which is also one of the main factors for the three major airlines to focus on purchasing new aircraft.

Why A320NEO?

Domestic airlines have strong demand for narrow-body aircraft

Even if it’s a goodcell phoneYes, then why did the three major airlines choose this narrow-body aircraft A320NEO from Airbus? The A320NEO series aircraft is Airbus’ latest generation of narrow-body aircraft. It is a new engine option for its best-selling A320 series aircraft. It is also Airbus’s flagship 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-haul international routes. By the end of 2021, there were 4,054 transport aircraft in the civil aviation industry at the end of the period, of which 3,178 were narrow-body aircraft, accounting for nearly 80% of the transport fleet.

Qiao Shanxun, secretary-general of the Expert Committee of the Henan Aviation Industry Association and researcher of the Henan Collaborative Innovation Center for Aviation Economic Development, told reporters that domestic airlines have strong demand for narrow-body aircraft, and the three major airlines also have large-scale narrow-body aircraft fleets. At present, the proportion of narrow-body aircraft accounts for 70-90%, and there is a need for updating of old aircraft.

The Airbus A320 and Boeing 737 are the two most popular single-aisle passenger aircraft in the world, and this is also one of the most fiercely competitive markets between Airbus and Boeing, an established American aircraft manufacturer. In 2021, Airbus delivered a total of 611 passenger aircraft, while Boeing delivered only 340 aircraft in the same year. Airbus has become the world’s largest aircraft manufacturer for three consecutive years. After the Boeing 737MAX accident, Airbus has a tendency to dominate the single-aisle passenger aircraft market.

Where does the money come from?

Business operations, commercial bank loans, other financing methods

Buying aircraft is a major capital expenditure for airlines, which will increase the airline’s debt scale. At present, affected by the repeated epidemics and high international crude oil prices, the performance of the three major airlines will further plummet in the first quarter of 2022, with a total loss of more than 20 billion yuan. In this case, where does the money to buy the plane come from? Will cash flow be affected? Will it further increase the scale of airline debt?

As a high-value product, aircraft are not a spot transaction, experts say. At the same time, the manufacturing cycle is relatively long, so the order is generally signed 3-5 years in advance. The 292 aircraft ordered this time will also be introduced annually and in batches. Taking Air China as an example, public information shows that the purchased aircraft are scheduled to be delivered in batches from 2023 to 2027; the purchase of aircraft by the holding subsidiary Shenzhen Airlines is scheduled to be delivered in batches from 2024 to 2026.

In the announcement, the three major airlines all said that the money to buy the plane does not need to be paid in one lump sum. Because the aircraft is delivered in batches every year, it is customary to pay part of the advance payment in installments, and then pay the balance on the delivery date of each aircraft. In the announcement, all three airlines said they would finance the purchase of the aircraft through business operations, commercial bank loans or other financing methods. The transaction amount is paid in installments and is not expected to have a significant impact on the company’s cash flow position and business operations.

expert’s point

The deep cooperation model between Airbus and China’s aviation industry is highly recognized

As a supplier, Airbus confirmed the order on the official website for the first time. Sheller, Airbus Chief Commercial Officer and Head of Airbus International, said: “We commend the excellent work done by the entire Airbus China team and our customer teams for their long and extensive discussions during the difficult Covid-19 pandemic. “As of May this year, there were more than 2,070 Airbus aircraft in service in mainland China.

Experts said that the large-scale purchase of Airbus aircraft by my country’s three major airlines is also sending a positive signal, which once again confirms that the deep cooperation model between Airbus and China’s aviation industry is highly recognized. In addition, Airbus has three production assembly lines in Tianjin, which also reflects the good coordinated development of aircraft manufacturers and the domestic aviation industry.Comprehensive CCTV news, surging news

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