China Southern Airlines orders Airbus jets worth US$21b as Boeing deal remains rumour

Airbus has once again solidified its dominant position in the Chinese aviation market with a substantial order for 137 A320neo aircraft from China Southern Airlines and its subsidiary Xiamen Airlines. This deal, valued at over US$21 billion based on list prices, underscores the ongoing preference of China's major state-owned carriers for European aircraft, following similar large orders from China Eastern and Air China in recent times.

The strategic importance of this order cannot be overstated. It not only extends Airbus's competitive edge against its US rival Boeing, whose own deal with Beijing remains speculative, but also aligns with China's ambitious development strategies. China Southern explicitly stated that the new fleet will help the airlines capitalize on initiatives such as the Greater Bay Area and the Belt and Road Initiative, enhancing their competitive standing on both domestic and international routes.

While the list price is substantial, it's understood that both airlines received customary discounts, which China Southern confirmed were in line with previous Airbus agreements. The deal is now awaiting approval from shareholders and relevant state authorities, a standard procedure for such significant transactions within China's state-controlled economy. Deliveries are slated to commence in 2028, ensuring a gradual fleet modernization over several years.

This order highlights a broader trend in global aviation, where geopolitical and economic factors often influence major procurement decisions. For China, securing a stable supply of modern, efficient aircraft is crucial for its economic development and global connectivity ambitions. The continued success of Airbus in securing these large orders reflects not only the quality of its products but also the complex dynamics of international trade and industrial policy.

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The discounts – common for large orders in the industry – were fair and “in line with those obtained in previous Airbus orders”.