Los Angeles-based Air Lease Corporation has delivered two Boeing 787-9 Dreamliners to China Southern Airlines. The two planes come from Air Lease Corporation’s order book with Boeing and are the last of five Dreamliners the big leasing outfit will send to China Southern Airlines.
Air Lease Corporation finalizes delivery with China Southern Airlines
The first Dreamliner appears to be B-20E8. This aircraft was ferried from Charleston to Guangzhou over the weekend. The second Dreamliner, B-20EH, hasn’t yet left the United States. The two deliveries will take China Southern’s fleet of Dreamliners (they operate both 787-8 and 787-9 types) to 25. Airline database planespotters.net indicates a further three are on order – just not from Air Lease Corporation.
“We are pleased to announce that our fourth and fifth of five new Boeing 787-9s have delivered to China Southern Airlines,” said Air Lease Corporation’s Jie Chen in a statement.
Air Lease Corporation is one of the biggest aircraft leasing companies in the world. As of March 31, Air Lease Corporation had 329 aircraft on order at Boeing. That includes 60 Dreamliners. Of those 60 Dreamliners, 58 are 787-9 models, and two are 787-10 models.
The right plane at the right time for China Southern Airlines?
The arrival of the two 297 seat aircraft in Guangzhou comes at an interesting time for China Southern Airlines. The airline has an enormous fleet of over 600 planes spread across multiple aircraft types and families. Backed by the Chinese state, the airline had developed a reputation over the last decade for aggressive expansion and capacity dumping.
As with most Chinese airlines, it’s hard to get a handle on exactly what’s going on at China Southern. Most of China Southern’s planes are back in the skies, and the number of flights operating within China is at or exceeding 2019 levels. But China Southern posted a US$1.66 billion loss for calendar 2020. In a rare interview, Guoxiang Wu, a China Southern Vice President, recently spoke at a CAPA Live event and admitted to overcapacity in the Chinese domestic market
Mr Wu also said China Southern was being cautious about bringing in new planes. Besides local overcapacity, China’s international airlines are significantly restricted in their international operations. With a few exceptions, Chinese government policy only allows its airlines to operate one flight on one route to any one country each week. As a result, Guoxiang Wu says capacity there is very low. China Southern is operating to 27 international destinations in May – most with just one flight per week.
The Dreamliner a better fit for China Southern Airlines?
It’s not a good operating environment for a sparkling new Dreamliner to land in. However, beyond the short term, the Dreamliner may prove a much better fit for China Southern than its more high profile A380s. Mr Wu said the future of the big plane was in doubt at China Southern Airlines.
“We must rethink about the A380. Maybe it is too large, and the operating cost is very high,” he said.
Despite its reputation for dumping excess capacity onto routes, China Southern is looking to trim its sails and stem costs. The 787-9 Dreamliner has the range to cover most if not all of China Southern’s A380 routes. And the Dreamliner can do so for far less money.
The Dreamliner can land in more airports than the A380 (which require expanded apron space and modified jetbridges). The Dreamliners agility and cost efficiencies make it a compelling proposition for most airlines as they look to phase out bigger, more expensive planes.
But with around 620 planes at China Southern and only a handful of them being A380s, fleet change will be an incremental process.