SHA:900945

Air China, Hainan Airlines Lock In $17.8 Billion Airbus Bulk Orders Despite Q2 Pressures

Three major Chinese airline companies have finalized bulk aircraft purchase commitments with Airbus, carrying a total list-price valuation of $17.8 billion despite experiencing challenges from elevated jet fuel costs.Air China (HKG:0753, SHA:601111) will acquire 15 Airbus A350-900 jets valued at $6.09 billion at list prices for delivery between 2030 and 2032, according to exchange filings over the weekend.Its majority-owned subsidiary Shenzhen Airlines finalized an agreement for 40 A320neo aircraft valued at $6.35 billion, with deliveries scheduled from 2029 to 2032.Separately, Hainan Airlines (SHA:600221) committed to 40 A320neo jets carrying a maximum list value of $5.36 billion, slated to arrive in batches between 2028 and 2032.The fleet expansions come despite expected losses in the first half due to macro headwinds.Air China expects attributable net loss for the first half to balloon to between 2.1 billion yuan and 2.6 billion yuan from 1.81 billion yuan a year earlier.The company attributed the forecast to higher jet fuel prices as a result of the Middle East conflict, squeezing its profit margins.The Iran conflict also weighed heavily on passenger traffic in June, with Air China's available seat kilometers, or ASK, falling 6.1% year over year. Revenue passenger kilometers, or passenger traffic, slid 2.9% from a year earlier, while cargo capacity also dropped by 6.3% year over year.Similarly, Hainan Airlines' ASK declined 7.0% year on year in the same month. RPK fell 7.7%, while cargo and mail volume slipped 9.6%.Data from global aviation consultancy IBA shows that while mainland Chinese operators have experienced minor localized headwinds, overall domestic and outbound system capacity remains near normalized pre-crisis run rates.