MIAMI — Airbus scored a big victory as China Eastern announced an order for seventy (70) A320neo aircraft on Friday. The order, which Airbus confirmed but declined to share details on, was filed on the Shanghai Stock Exchange.
The first airplanes are expected to join the fleet in 2018, continuing through 2020. The carrier anticipates utilizing them on short and medium haul routes to fill a growing capacity need in the dense region. All told, the new aircraft will increase the airline’s capacity by 12.7%. If bought at list prices, a rarity as discounts are common, the deal would be worth $6.4 billion. The order still requires government approval.
In a related transaction the company will sell back its fleet of Airbus A300-600s to Airbus.
China Southern’s order is the first from a Chinese carrier for the neo. The company has invested heavily in China, building facilities ranging from an A320 final assembly line in Tianjin to an A330 finishing factory. It also announced plans to offer an A330 regional variant that is squarely aimed at the high density Chinese domestic market. The orders also continue to bolster reports from Airbus that have forecast explosive growth for single-aisle jets in Asia in coming decades.
Separately, Kuwait Airways firmed up a commitment for 25 Airbus aircraft. The deal is split fifteen A320neo and ten A350-900 jets. Presently the carrier operates a predominantly Airbus fleet, with a mixture of A300, A310, A320, and A340 type airplanes. It also operates a single Boeing 737 and two 777s.
The latest orders for Airbus come as the company recently announced that it would boost production of the A320 family program to 46 planes per month by the second quarter of 2016. Despite Boeing outproducing Airbus in 2013 in terms of total frames, the European manufacturer has been easily trouncing its rival in single-aisle orders. At last check the A320neo was ahead of the 737MAX by roughly 800 frames.