00:00China's aviation sector is expanding fast and is projected to become the world's largest
00:05market by 2030. Passenger numbers have overtaken pre-pandemic levels with 810 million journeys
00:12forecast in 2026, driven by strong domestic demand. Last month, China Eastern Airlines
00:19agreed to buy more than 100 A320neo aircraft from Airbus in a deal worth some $16 billion.
00:27It was the airline's second big order with the European company since December.
00:33And Shandong Airlines, a subsidiary of China's flagship carrier Air China, announced plans
00:38to lease 10 Boeing 737 aircraft to upgrade its ageing fleet. Now, last year, China Southern
00:44Airlines earnings were back in the black for the first time since 2019, reporting net profit
00:50of more than $120 million. Well, Anita Mendirata is special advisor to the Secretary General
00:56of UN Tourism. Lovely to have you on Global Business Europe again. Let's start with the
01:02China Eastern's $16 billion Airbus order. How significant is this deal in the context of
01:09global aviation today?
01:12Juliette, thank you very much for having me back. It is incredibly significant for many
01:16reasons. First and foremost, when we talk about China being the world's largest aviation market,
01:20it's not only in aircraft, it's in airports and in passengers as well. Huge domestic activity,
01:26as you said, as well as international. But why this is so important going forward is that it's not
01:32only about the aircraft and it being with Airbus in terms of China Eastern, it's the nature of
01:37aircraft engineering, because this is very much about sustainable aviation. This is all very much
01:43focused on Airbus's NIO, which is very much focused on short and medium term flights. But the degree of
01:50impact that it has environmentally is much less than traditional aircraft engineering. So this is a
01:55really good thing for not only aviation growth, but sustainable aviation growth in China and around the
02:01world.
02:01But why is China one of the few markets still ordering aircraft at scale, despite geopolitical
02:09tensions, high fuel prices and ongoing supply chain disruptions?
02:14It's almost because of all of those three factors. China looks at the long term development of the
02:19nation. So they're looking 20 years onto the horizon, knowing that in the short term, we know that both
02:25Airbus and Boeing have delivery issues. Yes, but COMAC is coming onto the horizon as well. So what China is
02:31doing is really insulating its future growth economically, socially, and even politically by
02:38aligning with partners like Airbus, which is a European alliance. So this is the ultimate aviation
02:44soft power being able to protect travel, trade and international relationships for the long term.
02:49What's it going to mean for European airlines, European manufacturers and their supply chains?
02:54This is a very good thing because it's not only moving manufacturing and rather the orders to
03:00China, but there's also manufacturing shifts. So for instance, Airbus has moved some of its
03:04manufacturing into China, likewise supply chains. So what's much more control over the primary
03:11aircraft, as well as the components that go into it, which have been a significant reason for many of
03:16the delays of deliveries in the last thousand days, for instance, around the world.
03:20So China is really protecting its tourism growth and its trade growth, which is vital to the economy
03:27of China. And once again, this is about domestic and international.
03:30You talk about the economy of China, but I wonder beyond aviation, Anita, could this shift in aircraft
03:35orders maybe be one of the clearest signals of the eastward pivot of global economic power?
03:42Without question, because we see that there's enormous amount of trade activity moving towards the east.
03:47But more importantly, this is about bilateral agreements, nation to nation, looking for win-win
03:52solutions to be able to really get stability and security of growth, rather than having to work
03:58short term and deal with issues of tariffs, tariff threats, geopolitical conflict. So there is an eastern
04:05pivot. Also importantly, we've seen since the beginning of March, the challenge when there is international
04:11aircraft disruption and air corridor disruption. With the Middle East, which is 30 percent of global
04:17air corridor movement from west to east, east to west, especially with travel, there's a natural
04:22pivot towards China and the Chinese airlines are able to actually work through Russian airspace.
04:29So that's keeping global travel and trade moving when other corridors are being locked, which would
04:34normally go directly west. Always great talking to you. Thank you for your insight, Anita Mendirata.
04:40Thank you. Thank you, Juliet.
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