This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Boeing, Airbus Get Nods at China Southern; Chinese-Built C919 Gets a Maybe

Stocks in this article: BA CEA ZNH

Story has been updated to reflect pre-market trading in Boeing and China Southern shares.

NEW YORK (TheStreet) -- The chairman of China Southern Airlines (ZNH) last week endorsed the concept of a Chinese-built narrowbody aircraft. It’s just not clear whether China Southern would ever buy one.

“It’s our nation’s national strategy to develop our own aircraft,” China Southern Chairman Si Xianmin told reporters last week in New York, as Asia’s largest carrier launched Guangzhou-New York service. “I am fully confident of this aircraft.

Read More: Americans Still Hate Bag Fees and Most Lack a Preferred Airline: Poll

“I don’t think it will be a strange thing for Chinese airlines to use made-in -China aircraft,” Si said, through a translator. However, asked whether China Southern will order the Comac C919 narrowbody, Si responded: “It’s not out of assembly so I cannot tell you yet.”

An April report by the Rand Corporation cited the ABCD list as showing that China Southern has ordered five C919s and has options on an additional 15 -- the same order structure that China Eastern (CEA) has. Because Comac, the Commercial Aircraft Corporation of China, has not set pricing, these need not be considered as formal orders.

U.S. experts said Si is treading the line between following the Chinese government’s policy and running a profitable airline.

“There are things you have to say because the authorities make you say them,” said Richard Aboulafia, aerospace analyst at the Teal Group. “That is what [Si] was doing in the interview.

“But airlines do what they want,” Aboulafia said. “They have to make money and survive.”

Read More: Alaska Air Counters Delta Assault with Secret Weapon: Unified Employees

In May, China Southern said it had placed an order with Airbus for 80 narrowbody aircraft, including 50 A320neo airplanes and 30 A320s, with deliveries between 2016 and 2020. Airbus has been assembling narrowbody aircraft in China since it opened a Tianjin assembly plant in 2008. In March, China President Xi Jinping and Airbus agreed to extend the plant’s contract with Airbus through 2026. Airbus has a 51% stake in the plant.

Aboulafia said the decision to build the A320neo in Tianjin represents a crushing blow for the C919. ”There was a chance that political pressure to take the C191 would build, but now Airbus builds in China,” he said. “If you are trying to do the right thing and take aircraft built in China, you can do that now.”

China Southern’s fleet of 466 aircraft includes 259 Airbus jets and 188 Boeing (BA) jets. China Southern is the only Chinese airline flying both the A380 and the 787.

Si told reporters that taking delivery of the airline’s first two Boeing 777 300ERs enabled China Southern to fly Guangzhou-JFK New York, because the aircraft had the range to fly the 8,014-mile route.

In premarket trading about an hour before the opening bell, Boeing shares were up 53 cents to $121. Boeing is down 12% year-to-date. Also in premarket trading, China Southern shares were up 25 cents to $17.50. China Southern is down 13% year-to-date.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs