This article is from WeChat public account: Jiemian News (ID: wowjiemian) , author: Xue Bingbing, original title: “Three major airlines purchase new Airbus aircraft with a total of nearly 300 orders”, title image from: Visual China
On the evening of July 1, the three major airlines issued announcements one after another, announcing the purchase of new aircraft in a large amount, and a total of nearly 300 A320NEO aircraft were purchased from Airbus.
Air China (601111.SH) announced that Air China and its wholly-owned subsidiary Air China Import and Export Corporation and Airbus signed an Air China purchase agreement on July 1, 2022 to purchase 64 Airbus A320NEO series aircraft from Airbus; Air China’s holding subsidiary Shenzhen Airlines and Airbus signed a Shenzhen Airlines purchase agreement on July 1, 2022 to purchase 32 Airbus A320NEO series aircraft from Airbus.
China Eastern Airlines (600115.SH) stated that on July 1, 2022, it signed the “Agreement on the Purchase of 100 A320NEO Series Aircraft” with Airbus in Shanghai, China, to purchase 100 A320NEO series aircraft from Airbus. China Eastern also purchased the largest number of aircraft among the three major airlines.
China Southern Airlines (600029.SH) announced that the company signed an agreement with Airbus on July 1, 2022 to purchase 96 A320NEO series aircraft from Airbus.
In terms of price, Air China disclosed that the basic price of each aircraft includes the price of the fuselage, additional components and engines. The total basic price of 96 Airbus A320NEO aircraft is approximately US$12.213 billion (price in January 2020) .
China Eastern mentioned that the total basic price of the 100 A320NEO series aircraft purchased this time is approximately US$12.796 billion (open market quotation, list price in January 2020), according to the RMB exchange rate announced by the People’s Bank of China on the date of signing the transaction agreement. Calculated at the mid-point exchange rate of the US dollar (1 US dollar to 6.7035 yuan) , it is about 85.778 billion yuan.
However, the three major airlines all said that Airbus will give a larger margin in the actual transaction, and the actual price of purchasing the aircraft will be lower than the above-mentioned basic price.
The more favorable purchase price is also one of the main factors for the three major airlines to focus on purchasing new aircraft. China Southern Airlines pointed out in the announcement that after the company’s comprehensive assessment, the current is a favorable window period for aircraft introduction negotiations.
China Eastern also stated that, while the aviation market has not yet fully recovered, the introduction of aircraft is conducive to better business conditions, and the company has obtained better conditions than before in terms of aircraft prices and other business terms.
Civil aviation data analyst Li Hanming told Jiemian News that under the background of the epidemic, the number of civil aircraft orders of aircraft manufacturers has dropped significantly compared with normal years, and some original aircraft orders have been cancelled, and aircraft manufacturers have increased their inventory of aircraft and have poor sales. Under the circumstance, a larger discount will be given on the price, and airlines have more bargaining power when purchasing new aircraft at this node.
Civil aviation expert Lin Zhijie said that placing an order to buy aircraft at the current point reflects the expectations of the three major airlines for the future recovery of the civil aviation market. Aircraft prices are relatively low now, and by placing an order at this point, airlines will be able to enjoy a price advantage for years to come.
Jiemian News reporters learned that the three major airlines issued intensive announcements on the purchase of aircraft on the first day of July, which may have something to do with the adjustment of the airline’s financial statements . Because the civil aviation industry in the first half of this year was bleak and suffered serious losses, the purchase of aircraft is a major capital expenditure, which will increase the scale of airline liabilities. This major expenditure will be placed in the second half of the year to avoid adding more pressure to the performance of the first half of the year.
In terms of the source of funds for the purchase of aircraft, Air China stated that the company and Shenzhen Airlines will fund the transaction with their own funds, commercial bank loans and other financing methods respectively. business operations constitute any significant impact. China Southern Airlines intends to finance the purchase of 96 A320NEO series aircraft through business operations, commercial bank loans or other financing methods.
Similar to China Eastern Airlines, it plans to fund the transaction through its own funds, commercial bank loans, issuance of bonds and other financing instruments. influences.
The aircraft purchased by the three major airlines are Airbus A320NEO. The A320NEO series aircraft are the latest generation of narrow-body aircraft of Airbus, and it is also a mainstream narrow-body aircraft operated by domestic airlines. Since the epidemic, due to the sharp drop in air travel demand, the utilization rate of narrow-body aircraft is significantly higher than that of wide-body aircraft.
China Eastern made it clear in the announcement that after the introduction of this aircraft, it will be mainly used in the domestic trunk network market to encrypt high-yield routes and develop potential markets. Some subsequent aircraft will also be used to fly Japan, South Korea, Southeast Asia and other surrounding international routes. It will help the company to optimize the airline network and improve the overall airline revenue level.
The delivery time for the new aircraft purchased by the three major airlines starts in 2023. Air China stated that the aircraft to be purchased by the company is scheduled to be delivered in batches from 2023 to 2027; the aforementioned aircraft to be purchased by Shenzhen Airlines is scheduled to be delivered in batches from 2024 to 2026.
The 96 A320NEO series aircraft purchased by China Southern are scheduled to be delivered in batches from 2024 to 2027, of which 30 will be delivered in 2024, 40 will be delivered in 2025, 19 will be delivered in 2026 and 7 will be delivered in 2027.
The 100 A320NEO series aircraft purchased by China Eastern are scheduled to be delivered in batches from 2024 to 2027, of which 28 are planned to be delivered in 2024, 31 are planned to be delivered in 2025, 34 are planned to be delivered in 2026, and 7 are planned to be delivered in 2027.
The new planes introduced by the three major airlines will replace some of the old planes and keep the airline fleet young.
Air China said the transaction will increase the group’s capacity by about 10.4%. The introduction of new aircraft will be concentrated after 2024, partly to meet the renewal needs of the fleet’s withdrawal of old aircraft, and the actual net growth rate will remain within a controllable range. The Group expects that this transaction will make the Group’s operating costs more competitive in the market, and at the same time will be conducive to providing passengers with a high level of safety and comfort.
China Eastern said that based on its confidence in the future development of the civil aviation industry, the company needs to plan and reserve the fleet capacity in advance. During the delivery period of the introduced aircraft, some of the company’s stock narrow-body aircraft will be cancelled due to reasons such as the age of the aircraft and the expiration of the lease. Therefore, the 100 aircraft purchased by the company this time will partly play a role in replacing and updating the existing models.
This article comes from WeChat public account: Interface News (ID: wowjiemian) , author: Xue Bingbing
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