Chinese Airlines to Purchase 292 Airbus Jets Worth Almost $40 Billion

China’s three largest state airlines pledged to buy a total of almost 300 Airbus jets. The order is the biggest since the start of the pandemic and a breaking point for Boeing as it remains overlooked by China.

In a coordinated announcement, Air China and China Southern Airlines said they would each buy 96 A320neo class jets worth $12.2 billion at list prices. China Eastern Airlines announced it would buy 100 airplanes of the same type, worth $12.8 billion.

Airlines usually receive substantial discounts to list prices. China Eastern said these discounts were larger than usual.

China, which normally accounts for a quarter of Airbus and Boeing deliveries in a year, had taken a step back from orders because of the pandemic and trade and diplomatic tensions with the United States.

Beijing normally balances its jet purchases between Europe and the U.S. over time, and such large deals are typically saved for state visits. However, the latest announcement could signal a tipping point in favor of Airbus. Until now, global trade and diplomatic tensions have broadly had the effect of delaying politically sensitive import decisions across the board.

Boeing credited the “constructive dialogue” between Europe and China for the large deal and urged the U.S. and Chinese governments to engage in more productive discussions.

The U.S. company said in a statement that they were disappointed that geopolitical differences continue to constrain U.S. aircraft exports to China. The statement added that its sales to China supports thousands of American jobs and they remain hopeful that deliveries will resume promptly.

Boeing’s 737 MAX has still not started commercial flights in China despite the country’s regulator lifting the grounding order imposed during a safety crisis.

So far in 2022, Boeing has only delivered one aircraft to China against Airbus’ 47. It is estimated that it has about 150 airplanes waiting to be delivered to China.

Airbus portrayed the win as simply a commercial success, saying it showed strong confidence in Airbus. It did not mention a diplomatic support, but said the negotiations had been long and extensive.

The deal is subject to Chinese government approvals.

China’s airline industry, which took a heavy hit after authorities locked down Shanghai in April, has been steadily recovering in recent weeks.

Deliveries will run from 2023 to 2027, with the most expected in 2024.

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