Air China Signs $2.236 Billion Contract for A320 Series
Reaffirms 'China Money' Ahead of EU Sanctions and US-China 2+2 Talks
[Asia Economy Beijing=Special Correspondent Jo Young-shin] As the European Union (EU) has initiated sanction procedures against China over human rights abuses against the Uyghur ethnic group in Xinjiang, China has consistently purchased 18 Airbus aircraft.
According to Chinese media including Xinhua News Agency on the 19th, China’s state-owned airline Air China signed a purchase contract with the European aircraft manufacturer Airbus for 18 A320 series aircraft. The purchase price of the aircraft is reported to be 2.236 billion USD (approximately 2.51 trillion KRW). Of the 18 aircraft, 13 are A321-200NX models, and 5 are A320-200N models.
The newly purchased aircraft will all be delivered by 2022, and Air China stated that this purchase will increase its transport capacity by 2.12%.
As of the end of last year, Air China operates about 700 aircraft, including 366 Airbus planes and 328 American Boeing planes, and with the additional introduction of Airbus aircraft, the proportion of Airbus planes is expected to increase further.
Air China revealed that "after COVID-19, demand for air travel in China, especially domestic routes, has increased," indicating that the newly introduced aircraft will mainly be deployed on domestic routes within China.
In fact, air travel demand within China has recovered to pre-COVID-19 levels. According to the Civil Aviation Administration of China, last month, the passenger transport volume of Chinese civil aviation reached 23.95 million (on an annualized basis), an increase of 187.1% compared to the same month last year. This matches the level before COVID-19 in 2019.
Meanwhile, there is analysis that China has employed both carrot and stick tactics in relation to this Airbus aircraft purchase. The contract is seen as being made with the EU sanctions related to Xinjiang Uyghurs and the US-China high-level talks (2+2) in mind. Airbus did not receive a single aircraft order in January due to COVID-19. Last year, the number of new orders was only 268, less than half of the previous year, causing operational difficulties.
The situation is even more difficult for American Boeing. With the suspension of B737 Max production combined with the COVID-19 crisis, Boeing has not been able to escape from the red. This Airbus purchase is gaining credibility as a deliberate contract by China to showcase 'China money.'
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