Last week, the US Boeing Company took a huge blow by losing China’s biggest civil aviation order to its European nemesis Airbus. The transaction order of the century, placed by China’s three leading airlines, contains 292 Airbus A320 NEO passenger aircraft with a total worth of over 37 billion U.S. dollars. The US aviation giant expressed immense disappointment that “geopolitical differences continue to constrain US aircraft exports.” Granted, the trade war waged by the US is not doing American exporters any favor in the world’s largest market. But if Boeing blames the setback entirely on the government’s harum-scarum foreign policies, it is not likely to get very far in China after all.

Chinese mainstay airlines are not the first to turn their back on Boeing. At the Paris Air Show of 2019, American Airlines took a bold step to purchase 50 new Airbus A321 XLR planes to replace the old model of Boeing 757 in its fleet. American Airlines thus became the first US carrier to endorse Airbus’ new longest-range narrowbody plane. Its bitter contender Boeing 737 MAX, on the other hand, failed to score on the same occasion.

Up to now, Boeing planes are running neck to neck with Airbus even in its home market. According to the real-time aviation map maintained by Flightradar24, a third-party aviation data platform, the B737 models flying over American soil are not numerically superior to A320 family (see the map below). It is yet another sign that the tie is turning against Boeing on global scale, and not because of geopolitical concerns.



Fueling the Blanks

It is no coincidence that the fuel efficient A320 NEO was featured in the China deal. Following Western countries’ sanction against Russia amid the Ukrainian Crisis, the jet fuel prices almost doubled in the past twelve months. Considering fuel accounts for around half of a flight’s cost, Chinese airlines could easily be just as susceptible to the soaring fuel prices as their American counterparts. Airbus A320 NEO, consuming 20% less fuel than its previous models, has risen to global favor with over 8,000 orders since its launch in December 2010.

Boeing’s answer to A320 NEO is B737 MAX, but it came out late and in a hasty manner. Nine days after the first A320 NEO was delivered to the Germany’s Lufthansa in January 2016, B737 MAX rushed to its maiden light. It was not until May 2017 that Boeing’s new airliner was delivered to its first customer Batik Air Malaysia. As a stress response from both the competitor’s advance and surging market demand, B737 MAX had yet to prove itself to be a valid long-term choice for global airlines.

As far as China’s civil aviation market is concerned, both B737 and A320 family meet the need of China’s domestic flights, and Chinese buyers balanced the purchases from each side for a long time. However, the COVID-19 pandemic has taken its toll on Chinese airlines with massive cut on both domestic and international flights, and economic concerns have been given much more weight. Whichever proves more solid wins.