Airbus Group receives order for 40 A320neos from Xiamen Airlines

(AOF) – Xiamen Airlines has placed a firm order for 40 A320neo family aircraft from aircraft manufacturer Airbus to expand its fleet, worth about $4.8 billion at list price. The deal was announced on the Shanghai Stock Exchange by China Southern Airlines, major shareholder of Xiamen Airlines. Delivery is expected to take place between 2024 and 2027.

The A320neo Family incorporates new-generation engines and “Sharklets” which together deliver fuel and CO2 savings of over 25%, as well as 50% noise reduction.

Passengers benefit throughout the journey from Airbus’ award-winning Airspace interior, which brings the latest cabin technologies to the A320 Family. By the end of August 2022, the total number of firm orders for the A320neo Family reached over 8,500 units, from more than 130 customers worldwide.

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Key points

– Aircraft manufacturer co-world leader with Boeing, born in 1949 under the name Aérospatiale, diversified into satellites;

– Turnover of €52.1 billion, drawn from civil aircraft at 67%, defense & space activities at 21% and helicopters at 12%;

– Order book of €373 billion, 29% from Asia-Pacific, 30% from Europe, 21% from North America, 9% from the Middle East and 5% from Latin America;

– Business model of offering safe and environmentally friendly aeronautical and space solutions, with a strong commitment to society and public services;

– Open capital with strong positions of the French, German (11% each) and Spanish (4%) States, the 9-member Board of Directors being chaired by René Obermann, Guillaume Faury being Managing Director.

Challenges

– “Next chapter” initiative based on 3 pillars -simplification, strengthening and growth- and aiming to create a more profitable, more resilient and leading company in the decarbonization of the industry;

– Innovation strategy integrated into the business model and supported by €2.9 billion in R&D: “Fast-Track” roadmap prioritizing electrification, industrial systems, connectivity, autonomy, hardware and artificial intelligence / “CRT” organization focused on disruptive technologies, associated with external partnerships / structuring: E-Fan Family, ATTOL Fello’Fly, ACIC, TELEO, ACUBED, BIZ Lab, etc.;

– Environmental strategy with the ambition to become No. 1 in carbon-free aviation: design of a “ZEROe” aircraft with hybrid-hydrogen fuel,

/ integration into the reporting of emissions emitted by customers / launch of 2 development centers for hydrogen engines in France and Germany / proliferation of initiatives -High5+ for reducing emissions and waste during the production process, Sentinel 5P of data on the ‘air, Air Race E…;

– Ramp-up of activity: resumption of hiring and monthly production rate estimated at 65 aircraft in 2023 against 45 in 2021;

– Visibility of the activity with order intake of €62 billion at the end of 2021, bringing the order book to €398 billion and a firm order for 80 A320s by an Asian company.

Challenges

– Expectation for 2023 of the resumption of air traffic at 2019 levels;

– Impact of the Russia-Ukraine war: search for new sources of titanium supply in the medium term and suspension of orders for large air carriers by Aeroflot;

– Evolution of legal cases, with the German OHB and Qatar Airways;

– 2022 objectives: after the return to net profitability last year, delivery of 720 civil aircraft, increase in operating profit to €5.5 billion and free cash flow to €3.5 billion.

The end of a duopoly?

For several decades, the American Boeing and the European Airbus have shared 99% of the world market for airliners with more than 110 seats. This market weighs more than 100 billion dollars per year. However, this duopoly seems to be weakened in 2022 for several reasons. First, for the first time, two medium-haul single-aisle aircraft, the Chinese Comac’s C919 and the Russian Irkut’s MC-21, are about to enter service. Added to this is the Boeing 737 MAX crisis. With the cessation of deliveries of this aircraft between 2019 and 2021, the production balance has been broken. In 2021 Boeing posted 340 deliveries, with Airbus remaining well ahead with 611.

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Airbus Group receives order for 40 A320neos from Xiamen Airlines


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