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Sunday, August 14, 2022

In a transaction worth over $12 billion, China Southern Airlines orders 96 Airbus A320neo aircraft

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96 A320neo aircraft will be purchased by China Southern Airlines (ZNH) from Airbus, barely weeks after reportedly revising plans for Boeing aircraft deliveries.

The airline announced in a stock exchange announcement on July 1, 2022, that the 96 aircraft, with a list price of approximately $12 billion, will be delivered between 2024 and 2027.

China Southern claimed it was paying less than list rates and that it had leveraged the current situation to aim for better buying conditions, as is customary in industry agreements. According to China Southern, the aircraft will increase its capacity by 13%.

After a Bloomberg story on May 18, 2022, stating that China Southern had removed more than 100 Boeing 737 MAX deliveries from its near-term delivery schedules up to 2024, the Airbus deal followed.

After being grounded in the middle of March 2019 as a result of the two catastrophic incidents involving Lion Air and Ethiopian Airlines, which resulted in a combined death toll of 346, the Boeing 737 MAX is still not approved to operate in China.

A total of 717 aircraft, including 39 A320neos and 54 A321neos, are in operation, on order, or in storage for China Southern, according to Cirium statistics.

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