Can China Express Airlines Afford Its Pledge to Buy 100 China-Made Planes?
(Yicai Global) June 11 — China Express Airlines, a regional carrier hailing from China’s southwest, has ordered 100 domestic-made planes from a state-owned manufacturer, but industry analyst Lin Zhijie thinks it may have bitten off more than it can chew.
The Chongqing-based airline plans to buy short- and mid-range regional ARJ21–700 jets and medium-sized C919 passenger aircraft from Commercial Aircraft Corp. of China, or Comac, it said in a statement yesterday. It did not disclose further details, such as when it will complete the purchase, but said it hopes the deal will strengthen its position in the regional carrier sector and that it will get preferential pricing.
Express Airlines currently uses the Canada-made Bombardier CRJ700 for most flights and could viably update this to the ARJ in the future, Lin told Yicai Global. But an order for 100 planes is just too much given the current size of the airline — whether or not it can actually make good on the order is definitely in question, he added.
“The contract has a special meaning for Comac,” Lin continued. “China Express Airlines is a private company, so this is a highly market-oriented deal and indicates that the commercialization of made-in-China aircraft is making good progress.”
Express Airlines is China’s biggest independent regional airline and makes 94 percent of its journeys within the country, 90 percent of which are ‘solo’ routes, according to its 2019 annual report. Its current fleet includes 38 CRJ900 and 11 A320 aircraft, with the planes on average being just 3.5 years old.
The Comac ARJ21 is a short- and mid-range regional airline with between 78 and 90 seats and a range of up to 3,700 kilometers. Several smaller carriers in China are already using the model and three of the larger airlines have also put in orders for some of the aircraft. The C919 can carry up to 168 passengers up to 5,555 kilometers, and ran its first successful flight in 2017. It is still undergoing testing.
Editors: Tang Shihua, James Boynton