China Southern Airlines (CZ, Guangzhou) has paused plans to sell its ten B787-8s because of uncertainty surrounding their replacements.
The airline had proposed selling its B787-8 fleet and earlier this month listed them on the Shanghai United Assets and Equity Exchange. However, a decision by the Chinese government to impose a 125% tariff on imported US-manufactured goods and a deepening trade dispute between China and the United States has created uncertainty around future Boeing deliveries, causing China Southern to revise its divestment decision.
In April 11 exchange filings, China Southern Airlines said it had suspended the sales, citing “the existence of matters affecting property rights transactions.”
China Southern Airlines has thirty-four B737-8s on order at Boeing, along with another 75 narrowbodies on order at Airbus. But the airline was planning to replace the B787-8s with bigger widebodies to better service its long-haul routes. However, the deteriorating trade relationship between the US and China and resulting tit-for-tat tariffs render any immediate order with Boeing unlikely. The existing Chinese tariff on US goods, imposed in response to a 145% tariff on Chinese-made goods, more than doubles the price of a Boeing aircraft for Chinese carriers.
Bloomberg reports that on April 15, the Chinese government told Chinese carriers to pause any impending Boeing deliveries, as well as aircraft-related equipment and parts from US companies.
Chinese airlines have a combined 137 aircraft on order at Boeing, according to the ch-aviation fleets module. Of that number, Boeing has around ten, mostly B737-8s, ready for delivery, including two due to China Southern. It remains unclear whether those aircraft will be delivered and if so, under what tariff rate.
