Reports suggest Air China is on the verge of a deal worth more than $2 billion to purchase 18 A320neo aircraft from a leasing firm. The order would see the aircraft delivered by the end of next year, and would be the first time since 2013 the airline has ordered a narrowbody from the Airbus product line. With its 16 737 MAX remaining grounded, could Air China be on the verge of canceling its outstanding order with Boeing?
Air China goes Airbus for its future narrowbody requirements
Air China is eyeing an order for more Airbus A320neos, to be bought from a leasing firm. Reuters reported today that AFS Investments, a subsidiary of GECAS, is in talks with the airline regarding an order of 18 of the type.
The order would be worth $2.24 billion at list price, with deliveries expected to begin fairly rapidly. Indeed, Air China has said it expects the entire order to arrive with the carrier by 2022.
Air China further said that the aircraft made sense for it, given the current environment. With the Chinese domestic market recovering at pace, flying these highly efficient narrowbodies will help the airline remain competitive. The currently low costs of financing and a favorable exchange rate are spurring the airline’s investment forward.
It’s notable that the number on order is very similar to the number of Boeing 737 MAX 8 aircraft Air China currently has parked. The beleaguered 737 MAX is yet to be recertified in China, with the regulator stating it wants to conduct its own tests. A date for certification has not been given.
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A snub to Boeing?
Air China was set to be a significant operator of the 737 MAX in Asia. It had placed an order in December 2014 for 44 MAX 8 aircraft, with deliveries expected to take place between November 2017 and completing in 2020. Prior to the grounding, the airline received only 16 of the type.
None have been delivered since the FAA ungrounded the type late last year, as the Civil Aviation Administration of China (CAAC) is still not convinced on the aircraft. The latest update said that the “major safety concerns raised by the CAAC have not yet been fully resolved,” and that approval to begin test flights would not be given until this had happened.
Air China had looked to be swinging in Boeing’s direction for its narrowbody fleet, with no new orders placed for Airbus aircraft since it signed for 20 A350s in 2019. Its last narrowbody order from the European planemaker was back in 2013, when it ordered 60 A320neo family jets, to be split between itself and its subsidiary Shenzhen Airlines.
To date, the airline has received 32 A320neo and 10 A321neo, with four remaining to be delivered. However, it is eager to phase out its remaining older narrowbodies, which include 18 737-700, some of which are more than 15 years old, and some of its older A320ceos.
While today’s order is not huge, it perhaps signals a change in the wind for the Chinese airline. With the COMAC C919 approaching certification, and Air China orders in for 20, plus the new A320neos arriving by the end of next year, a significant cancelation of the Boeing narrowbody would not be entirely surprising.
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