Air China and Shenzhen Airlines just ordered 55 Airbus jets for $12.4 billion. List price. Which means exactly nothing because nobody pays list price for commercial aircraft. Ever. Saying you bought planes at list price is like saying you paid sticker for a Kia. It didn't happen.
The press release says this order helps Chinese carriers rebuild their fleets after Covid. Rebuild implies something was destroyed. The planes are fine. They just sat on tarmacs for two years depreciating while executives pretended they were strategic reserves. Now those same executives get to announce a big shiny number and watch retail idiots think China's aviation sector is roaring back.
Here's what actually happened. Two airlines agreed to accept delivery of planes they already needed five years ago at a discount Airbus will never disclose. The $12.4 billion figure exists purely so financial journalists have a number to put in headlines. You will never see the actual transaction price. You will never know the delivery schedule. You will never know how many of these orders get quietly canceled in 2028 when demand projections turn out to be horsesh*t.
But sure. Buy aviation stocks because two Chinese carriers ordered some A320s. Definitely correlate that headline to your portfolio decisions. I'm sure the technical chart on Boeing cares deeply about Shenzhen Airlines' fleet modernization strategy.
Fifty-five planes sounds like a lot until you remember China has 1.4 billion people and exactly none of them can reach technical support when their discount carrier leaves them in Chengdu for eight hours. The real story here is that Airbus found two buyers dumb enough to let them announce list price in the press release, which is honestly more embarrassing than just admitting you negotiated.
Photo by Andrew Dawes on Unsplash
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