China's four largest carriers by fleet size have placed orders with Airbus (AIB, Toulouse Blagnac) for a total of 292 A320 Family aircraft, separate stock market filings dated July 1 have revealed.
Air China (CA, Beijing Capital) said it had agreed an order with the Europeans covering sixty-four A320neo Family jets while its Shenzhen Airlines (ZH, Shenzhen) subsidiary will acquire thirty-two. Deliveries to Air China will run from 2023 to 2027 while those for Shenzhen Airlines will arrive from 2024 to 2025. However, the introduction of new aircraft will be concentrated on beyond 2024.
Airbus gave both airlines a "relatively large" discount in the form of a credit memo that can be used to pay for Airbus aircraft, the final payment, or the purchase of Airbus products and services. Air China and Shenzhen Airlines will fund the acquisition via their own funds, commercial bank loans, and other financing methods respectively.
Air China and Shenzhen Airlines will use the incoming aircraft to both renew and grow their existing narrowbody fleets with the group's overall capacity due to expand by approximately 10.4%.
Air China has a narrowbody fleet that encompasses both Airbus and Boeing machinery namely thirty-three A319-100s, forty-five A320-200s, forty-six A320-200Ns, sixty-three A321-200s, ten A321-200Ns, fourteen A321-200NXs, eighteen B737-700s, sixteen B737-8s (grounded), 122 B737-800s, and seven ARJ21-700s. For its part, Shenzhen Airlines operates eight A319-100s, seventy-six A320-200s, twenty-seven A320neo, five B737-8 MAX (grounded), seventy-six B737-800s, and three B737-900s (parked).
China Eastern Airlines (MU, Shanghai Hongqiao) said in its filing that it signed a purchase agreement with Airbus in Shanghai for 100 A320neo Family jets to be delivered in batches from 2024 to 2027. Subject to market demand, 28 are currently planned to arrive in 2024, 31 in 2025, 34 in 2026, and seven in 2027.
The acquisition will be used to renew and update the carrier's current mainline narrowbody fleet which encompasses thirty-five A319-100s, 173 A320ceo, eighty A320neo, seventy-seven A321ceo, thirty-nine B737-700s, three B737-8 MAX (grounded), and 106 B737-800s. China Eastern said in its estimates, covering 2024 to 2027, that about sixty-eight A320 series aircraft will be retired as their leases run out while other of its own aircraft will also be withdrawn due to factors such as age.
Once in place, China Eastern will deploy the new A320neo Family jets on its domestic Chinese trunk network targeting high-yield routes while developing new potential markets. Some of the aircraft will also be used to fly to Japan, South Korea, Southeast Asia and other nearby international routes.
Here again, Airbus has granted the airline a "relatively large price concession". Funding will also come via in-house cash, bank loans, and bonds among other sources.
Lastly, China Southern Airlines (CZ, Guangzhou) said it had agreed to buy to purchase ninety-six A320neo Family jets deliveries of which will see 30 due in 2024, 40 in 2025, 19 in 2026, and seven in 2027. Once again, the new jets will be used to renew and grow the airline's narrowbody fleet which numbers nine A319-100s, three A319-100Ns, 111 A320ceo, thirty-nine A320neo, ninety-nine A321ceo, twenty-eight A321neo (and twenty-eight NX), twenty-six B737-700s, twenty-four B737-8 MAX (grounded), and 162 B737-800s.
And again, the airline said Airbus had granted it a "relatively large" discount for the transaction which will be funded by company's reserves, loans, bonds, and other means.
All four contracts, which are US-dollar denominated as opposed to euro-denominated, are still subject to each shareholder agreement as well as Beijing's final consent.
