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  Airbus

  Stock Code:

  AIR

  Date Founded:

  1970-12-18

  CEO:

  Guillaume Faury

  Headquarters Location:

  Toulouse, France

  Key Product Lines:

  Airbus A220, Airbus A320, Airbus A330, Airbus A340, Airbus A350, Airbus A380

  Business Type:

  Planemaker

Less than a week after Airbus signed a record-breaking deal with Chinese airlines, which resulted in more than 290 aircraft being bought in a single day, the Toulouse-based aircraft manufacturer is looking to deepen its footprint in the Chinese aviation market. Airbus held an event on Monday to promote the Airbus A220 for short-haul flights, promising to reach the potential of the Western China market.

Airbus promotes homage

The European manufacturer highlighted that it was in close communications with Chinese airlines, especially the small- and medium-sized carriers, for the possible purchase of the Airbus A220 aircraft. Capable of carrying 100 to 150 passengers, the aircraft also has the highest proportion of Chinese components compared to other Airbus aircraft models.

Initially designed by Bombardier, the aircraft line was bought over by Airbus and has since had 15 Chinese suppliers contributing to the manufacturing process. The procurement value of the Airbus A220s is expected to account for approximately 40% of the total procurement value of Airbus in China, further solidifying the reason the manufacturing firm is promoting this particular model, as it said:

"Among all Airbus aircraft models, the A220 boasts the highest number of Chinese elements, from providing raw materials and components to assembling big parts. We will continue to localize the supply chain and reduce costs for the A220. This approach can help reduce international transportation logistics and carbon emissions significantly."

Thus far, Airbus has received more than 740 orders for the Airbus A220 from more than 25 airline customers worldwide, including major carriers such as Air Canada, airBaltic, Air France, and Delta Air Lines. However, the manufacturing firm has yet to break the aircraft type further into the Asia-Pacific market. Korean Air is the only Asian airline to house the Airbus A220 in its fleet, and having Chinese airlines onboard could prove monumental for Airbus.

Perks for the Chinese market

Marketed as an efficient supplement to regional aircraft like the Chinese-developed COMAC ARJ21, which carries anywhere from 90 to 105 passengers in a one-class configuration, the Airbus A220 offers Chinese airlines a bigger capacity. And in comparison to the usual market-domnating Airbus A320s and Boeing 737s, the Airbus A220 may be smaller but is well suited to airlines that require something with lower capacity but a long range.

According to Airbus, the aircraft's small size works well in city center and hot-and-high airport operations, making it ideal for distant airports within rural provinces or outer cities. And when paired with the range of the aircraft, it brings possibilities for the small- and medium-sized Chinese carriers to open new domestic and even regional routes as the Chinese government aims to build 136 new airports by 2025. Not forgetting that as a new-generation aircraft, the Airbus A220 provides more cost- and fuel-efficient ways to connect destinations.

Currently, the monthly production rate of the aircraft stands at six, and Airbus hopes to increase it to 14 by 2025. The manufacturer said it has already started preparations to solidify its goal through closer cooperation with the Chinese suppliers, one of which is SAC Commercial Aircraft International Ltd, an Aviation Industry Corp of China subsidiary based in Shenyang, Liaoning province. The opportunities presented to the company are endless, as it serves as one major supplier for the aircraft by producing forward fuselages, rear barrel sections, hatch doors, mid-fuselages, and tail cones.

Significance of China

Asia-Pacific has always been a core market for Airbus because it is the fastest-growing air transport region with a 5.5% annual growth in passenger traffic versus a global average of 4.3%. The region also accounts for a third of Airbus' total order book and a third of its revenues. Airbus' aimed expansion into the Chinese economy is a respectful demonstration of wanting to strengthen cooperation between China and Europe.

To further promote the hype of the Airbus A220 and ensure it can deliver on its future promises, the European manufacturer is now pushing forward with the Civil Aviation Administration of China to get the aircraft certified as airworthy. George Xu, Executive Vice President of Airbus and CEO of Airbus China, emphasized:

"China is the largest single-country market for Airbus' commercial aircraft. Last year, deliveries to the China market represented over 20% of Airbus' total deliveries worldwide. As a reliable and long-term strategic partner of China, we will continue to cooperate with China's aviation industry, and we are confident in the future of the Chinese market."

Quite the blow to Boeing

Airbus' further reach into the Chinese economy undoubtedly poses an even more significant threat to its American rival, Boeing, especially after the major sweeping deal that Airbus had with the Chinese airlines. Boeing has had an enduring cooperation with China for more than 45 years, and more than 50% of all commercial aircraft operating within the country are from the US planemaker. However, the tides could turn quickly if Airbus successfully secured the Airbus A220 deals with the Chinese airlines, and Boeing's long-standing reach in the Chinese market could soon be overtaken.

Source: Global Times