Airbus Stock Jumps as Air China Says It Is Buying 60 Airbus A320neo Planes for $9.5 Billion

Air China (AIRYY) is going all-in on Western-made jets. The state-run carrier just announced a massive deal to buy 60 Airbus A320neo planes, valued at $9.53 billion. The news sent Airbus shares (EADSF) higher on Tuesday as the market celebrated a major win for the European manufacturer.Claim 70% Off TipRanks This Holiday SeasonUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential This order couldn't have come at a better time. Just weeks ago, Airbus was struggling with a "software virus" caused by solar radiation that interfered with flight controls, forcing a recall of over 6,000 planes. On top of that, a supplier error led to fuselage panels being made with the wrong thickness, causing Airbus to slash its 2025 delivery target to 790 jets. Air China's multi-billion-dollar commitment acts as a healing balm, proving that the world's biggest buyers still trust Airbus to lead the skies. Negotiators Secure Customary "Distress Discounts" While the total price tag is nearly $10 billion, Air China isn't paying full freight. In a filing with the Shanghai stock exchange, the airline confirmed it secured "substantial price concessions," essentially a giant bulk-buyer's discount. By signing this deal while Airbus is under pressure to stabilize its business, Air China is building a defensive moat around its fleet. It is joining other Chinese carriers, like Spring Airlines and Juneyao Airlines, who recently committed a combined $8.2 billion to Airbus. These new A320neo jets use 20% less fuel, giving Air China a massive technical edge as gas prices and environmental rules get tougher. The Deal Is About Securing the Next Decade This deal is about more than just new planes; it's about securing the next decade. Because of global supply chain problems, it is currently very hard to get new jets. By booking 60 planes for delivery between 2028 and 2032, Air China is jumping to the front of a very long line. While rival Boeing (BA) has been largely shut out of the Chinese market due to trade tensions, Airbus has solidified its dominance. Even as China develops its own domestic jet, the C919, Air China is sticking with the "industry standard" A320neo. This $9.5 billion move ensures that Air China will hold the "Iron Throne" of Asian aviation for years to come. The bottom line is that Air China is using Airbus's temporary weakness to build a permanent advantage. By locking in a massive order during a month of technical recalls, the airline secured a lower price for the best jets on the market. For investors, the stock jump is a sign that the worst of the supply chain blues might finally be over for Airbus. Is Airbus a Good Stock to Buy? Analyst sentiment toward Airbus Group SE (EADSY) remains overwhelmingly positive, despite the recent stock decline related to the flight control software issue. Wall Street currently rates the stock a Strong Buy, based on 13 analysts tracked in the last three months. Of these ratings, 10 analysts call it a Buy, three say a Hold, and none recommend a Sell. The average 12-month EADSF price target sits at $269.77. This target implies a solid upside potential of roughly 15.9% from the last price.