China Southern Airlines has suspended its planned auction of ten Boeing 787-8 aircraft from its fleet, citing the escalating trade war between the United States and China.
The U.S. recently imposed tariffs of up to 145% on certain Chinese imports and as high as 245% on some categories. In retaliation, China introduced a 125% tariff on U.S.-made goods, including aircraft. As part of the response, Beijing instructed domestic airlines to halt purchases of new American-made aircraft.
The auction, initially set with a starting price of $550 million, was intended to help China Southern transition from the lower-capacity, less efficient 787-8s to the more modern and larger Boeing 787-9s. While the Shanghai Stock Exchange cited “external events affecting the transaction” as the reason for the cancellation, the underlying cause is clearly the ongoing trade tensions.
This development adds major uncertainty to China Southern’s fleet renewal plans. Letting go of the 787-8s without the ability to replace them with newer aircraft introduces significant operational risk. Currently, the airline has 17 Boeing 787-9s in service, with additional orders in place, though the recent restrictions may hinder their delivery.
The suspension also impacts Boeing, whose stock has fallen amid the news. With China being one of the largest aviation markets in the world, it is now becoming increasingly difficult for Boeing to maintain a foothold there.
China Southern’s decision to retain its 787-8s is seen as a strategic move toward maintaining operational stability over fleet modernization.
