Image: Reuters Berita 24 English - The "Big Three" state-run airlines of China committed to purchasing nearly 300 Airbus planes in...
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| Image: Reuters |
Berita 24 English - The "Big Three" state-run airlines of China committed to purchasing nearly 300 Airbus planes in total on Friday. This is the largest order placed by Chinese carriers since the COVID-19 pandemic began, and it represents a major victory for Europe since Boeing is still largely barred from the Chinese market.
Air China and China Southern Airlines announced their plans to purchase 96 A320neo family aircraft for a combined total of $12.2 billion in statements that appeared to be coordinated. China Eastern Airlines announced that it would spend $12.8 billion to purchase 100 of the same type of aircraft.
China Eastern reported that the airline industry generally receives significant reductions from list prices, and they were larger than usual.
A quarter of Airbus and Boeing deliveries during an average year are made to China's enormous market. But as it balances the effects of COVID-19 and extended trade conflicts with the United States, China has mostly stayed out of the global jet market.
According to industry sources, Beijing often balances its jet purchases between Europe and the United States over time, normally reserving such huge transactions for state visits.
However, they claimed that Friday's agreement represented a clear move toward Beijing's European supplier. Politically sensitive import decisions have generally been put off until now due to ongoing global trade and diplomatic difficulties.
Boeing reacted angrily to the news, unexpectedly attributing the massive purchase to "positive conversation" between Beijing and the governments of Europe, and encouraging the governments of the United States and China to hold productive negotiations.
In an email, Boeing said, "It is disheartening that geopolitical differences continue to restrain U.S. aircraft exports as a leading U.S. exporter with a 50-year relationship to China's aviation industry."
Tens of thousands of American jobs have historically been supported by Boeing aircraft sales to China, so we are optimistic that orders and deliveries will soon resume.
"EXTENSIVE DIAGRAM"
Even though China joined other regulators late last year in lifting a grounding order imposed during a safety crisis, the Boeing 737 MAX has yet to restart commercial flights in China.
Only one commercial plane has been delivered by Boeing to China so far this year compared to 47 by Airbus. According to some estimates, it has 150 aeroplanes waiting to be delivered to China.
The triumph, according to Airbus, was solely commercial and showed "great trust in Airbus." In a statement, it claimed that "long and comprehensive conversations" led to the agreement, although it made no mention of any diplomatic backing.
A diplomatic source downplayed any political interference while pointing out the difficulties in increasing production to deliver such a big number of planes when supply chain issues around the world continue.
The Chinese government must approve the sale.
Shares of Airbus increased by more than 3%. Following a decline in pre-market trade, Boeing increased by about 1,3%.
After officials shut down Shanghai in April, the country's airline sector suffered a serious setback that has been slowly rebounding in recent weeks.
According to China Eastern, the new narrowbody aircraft will mostly be used for internal travel and international flights.
Deliveries will occur between 2023 and 2027, with the majority anticipated in 2024. While China Southern anticipates a 13 percent increase, Air China stated that its acquisition will yield a 10.4 percent increase.
The March tragedy of a Boeing 737-800 jet, which killed all 132 passengers and crew, rocked China Eastern. According to those briefed on the situation, investigators are looking into the crew's conduct and have not discovered any indications of a technical issue.
