Airbus (EADSY), the European planemaker, has secured aircraft orders from Air China, a Chinese airline, and Hainan Airlines, another Chinese carrier, with a combined transaction value of about $17.8 billion. Air China agreed to purchase 15 A350-900 widebody aircraft and 40 A320neo-family jets for Shenzhen Airlines, its airline subsidiary, in a deal valued at $12.4 billion. Hainan Airlines separately ordered 40 A320neo aircraft for as much as $5.36 billion. The transactions, disclosed through separate Shanghai Stock Exchange filings on Friday, could strengthen Airbus's commercial momentum only days before the Farnborough Air Show begins near London.
The latest agreements add to a series of major Airbus sales in China, where the company has gained an advantage over Boeing NYSE:BA, the U.S. planemaker, in the world's second-largest aviation market in recent years. In March, China Eastern Airlines, a Chinese carrier, ordered 101 A320neo aircraft from Airbus. Late last year, state-owned Air China purchased 60 Airbus jets in a transaction valued at $9.53 billion. During the same month, Spring Airlines and Juneyao Airlines, two privately owned Chinese carriers, signed Airbus aircraft deals worth a combined $8.2 billion. However, investors should note that airlines commonly receive substantial discounts from published aircraft prices, particularly when placing large orders.
The $17.8 billion announcement may give Airbus another visible commercial boost as it prepares to compete with Boeing for new orders at Farnborough early next week. Boeing has been working to end a lengthy period without a major Chinese order. During U.S. President Donald Trump's May visit to China, Trump said the country had agreed to order 200 large Boeing aircraft, although the specific jets covered by that agreement remain unclear. Before that announcement, China had not disclosed a major Boeing order since Trump's previous visit in 2017, and much of the transaction announced at that time had already been disclosed, suggesting Airbus's confirmed orders may remain the more tangible near-term development for investors.