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May 29, 2024
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Important news for Boeing: two of China’s Big Three airlines have confirmed that they are resuming deliveries of the MAX. Both China Eastern Airlines and China Southern Airlines have included the type in their near-term fleet delivery plans, they said in their 2022 results presentations. Chinese airlines to resume Boeing MAX deliveries.

China Southern expects to take delivery of 37 MAXs this year, 35 next year, and of 31 in 2025. This indicates that the airline will order additional aircraft, as Boeing’s current list of unfilled deliveries shows only 34 MAX for China Southern.

CS has been the first Chinese airline to resume MAX operations in January. The type was grounded in March 2019 following the two fatal accidents in Indonesia and Ethiopia, with China’s regulatory agency CAAC one of the first agencies to do so. Although the CAAC indicated in late 2021 that the MAX could return to service, the actual return was delayed as the Covid crisis and lockdowns continued. China Southern is now flying with thirteen MAX 8s, with another eleven still parked.

China Eastern said in its FY22 presentation that it will induct two MAX 8s this year and six in 2024. Three aircraft that had been delivered before the grounding in 2019 are still parked, however, but when they will be brought back into service isn’t known.

The third of the big Chinese carriers, Air China, is operating seven out of sixteen MAX 8s it has received so far. The type is absent from the airline’s fleet delivery schedule for this year through 2025 which was presented this week.

The announcement by the two airlines is a major relief for Boeing. By the end of last year, the airframer had 138 MAX aircraft in inventory for Chinese customers, while the airlines themselves had some 100 parked aircraft in China. Boeing said last September that it was considering offering part of its Chinese MAX inventory to other customers to de-risk its backlog. But after the country dropped its zero-Covid policy in December and air travel recovered, President and CEO David Calhoun was more optimistic in January about the opportunities in China despite the ongoing political tensions between Beijing and Washington.

Chinese airlines lost RMB 216 billion

The airline industry in China suffered massively from the zero-Covid policy and lockdowns, producing a combined loss of RMB 216 billion that exceeds those of 2020 and 2021, Air China said in its presentation this week. Passenger transport volumes were down to 250 million passengers, 43.2 percent lower than in 2021 and just 38.1 percent of 2019 levels. Transport turnover of Chinese carriers was 30.1 percent down year on year to 59.9 billion ton-kilometers. Cargo and mail performed the best, 17 percent down in 2021 at 6.1 billion tons.

Air China produced a loss of RMB -38.6 billion compared to RMB -16.6 billion, with total revenues of RMB 52.9 billion versus RMB 74.5 billion. Passenger revenues were RMB 38.3 billion, of which 32.7 billion were from domestic operations and RMB 4.8 billion from international services. Cargo and mail contributed RMB 10 billion to the revenues. Expenses were up RMB 91.7 billion compared to RMB 95.6 billion the year before.

Air China operated a fleet of 762 aircraft on December 31. The airline took delivery of 71 Airbus A320neo/A321neo aircraft through 2025, including ten this year, 32 in 2024, and 29 in 2025. Three A319neo’s will join in 2025 as well as seven A350s this year. COMAC should deliver eleven ARJ21s this year and nine in 2024.

China Eastern net loss triples

China Eastern Airlines’ loss triples attributable to shareholders of RMB -39.9 billion compared to RMB -13.3 billion in 2021. Revenues were RMB 49.7 billion versus RMB 73.2 billion the year before, of which RMB 36.9 billion were from passengers and RMB 7.8 billion from cargo. Expenses increased to RMB 81.4 billion from RMB 86.7 billion, resulting in an operating loss/EBITDA of RMB -31.6 billion versus RMB -13.5 billion.

China Eastern’s fleet included 775 aircraft, with sixteen A320neo-family aircraft and five A350s to be delivered this year and in 2024. The airline should also receive four COMAC C919s and nine ARJ21s this year as well as in 2024. Except for the MAX, Boeing will deliver three 787-9s next year.

China Southern’s net loss also deepened, to RMB -33.7 billion from RMB -11 billion in 2021. Revenues were down to RMB 87.1 billion from RMB 101.6 billion, of which RMB 80.1 billion was from passengers and RMB 6.2 billion from cargo and other sources. Domestic passenger revenues dropped by RMB 17 billion year on year to RMB 57.3 billion. At RMB 115.3 billion, expenses were about on par with 2021, resulting in an operating loss of RMB -22.5 billion compared to RMB -9.9 billion.

China Southern had a fleet of 894 aircraft by the end of 2022. Except for the 103 MAX that it plans to add to the fleet through 2025, China Southern also expects delivery of 111 Airbus A320neo-family aircraft, the result of the airline’s order for 96 aircraft placed in July last year. In 2023, 26 neo’s are due, in 2024 39, and in 2025 46 aircraft.

author avatar
Richard Schuurman
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016. Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.

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