Aviation Capital Group delivers Airbus A320neo to Juneyao Air and Chinese aviation industry analysis

Aviation Capital Group has delivered a new Airbus A320neo on long-term lease to Shanghai-based Juneyao Air. This is Aviation Capital Group’s 1st aircraft delivery from the Airbus base in Tianjin (to the southeast of the Chinese capital, Beijing), China. Juneyao currently operates a total of 3 Airbus A320neos and is awaiting 2 more. It has also ordered 1 Airbus A321neo.

There is a lot of action in the Chinese aviation industry these days, mainly due to the country’s quick recovery from the coronavirus. While the 737MAX project is flooded with problems and wading in administrative debacles, the COMAC ARJ21 has become the new sensation in the world of aviation, with production rate soaring and 35 aircraft being operated by 8 different airlines in China. Though this doesn’t seem like much, the 3 main Chinese airlines (China Southern, China Eastern and Air China) have ordered a total of 35 aircraft each, which is incredible. Although the ARJ21 hasn’t already captivated the foreign market, that is mainly because airlines have more confidence in Boeing and Airbus, which is natural. China has never really had a big role in the production of commercial jets, but with Airbus A350XWB production being lowered, Boeing 777X deliveries delayed to 2022 and Embraer in a financial coma, it is obvious that the market is open for China to take. Long-haul might remain Boeing and Airbus’ street for longer, though. A possible competitor to the so-far successful Airbus A320neo program could be the COMAC C919, which is planned to enter in service with China Eastern’s subsidiary OTT Airlines next year. The aircraft, of which 6 have been produced, will be able to carry between 156 and 168 passengers. And, this is the banger: it already has 1008 firm orders, mainly from lessors and banks! But, do not undermine the strength of the A320neo project: it has received 7445 orders and 1347 aircraft have been delivered. If the C919 wants to be N°1 in the short-haul market, it will definitely not have an easy time. The worrying subject is Boeing’s fate. It looks to me that it has very little future left in the commercial aviation industry: 1. because of its $2.4 billion Q2 loss, 2. due the 737MAX engine problems that seem unsolvable, 3. due to lack of demand for long-haul aircraft (airlines do simply not have the money to buy 400-seat passenger jets) and 4. due to competition in the short-haul market from Airbus and COMAC.

Anyhow, this financial and sanitary crisis has definitely opened the view on a very different aviation industry, in which China could potentially be a part of. Next article: Boeing’s $2.4 billion loss. 30th of July 2020.

Beyond Mayday - Article | ATG

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