margins and long cycles "?

, after US President Trump ended his visit to China in May this year, the results announced to the media for the first time were not tariffs, artificial intelligence (AI), chip or rare earth cooperation, but a Boeing aircraft order. Trump said that China has agreed to buy 200 Boeing passenger planes, and if the cooperation goes well, the order may even be expanded to 750. The announcement has attracted attention because China has actively promoted the development of the domestic large passenger aircraft C919 in recent years, on the other hand, it has continued to purchase passenger aircraft from European aircraft manufacturer Airbus (Airbus). Since the outbreak of the trade war in 2017 and the two successive Boeing 737 MAX air disasters, China has hardly purchased new Boeing airliners. Now re-order, no doubt released an unusual signal.

buy Boeing?

for airlines, buying planes has never been a one-time deal. A Boeing 737 or Airbus A320 officially sells for about $110,000,000 to $130,000,000. But the real money is not selling aircraft, but the next 20 to 30 years of repair, maintenance, parts supply and technical support.

aviation industry therefore spread a classic metaphor, "razor and blade" (Razor and Blade). The aircraft is like a razor body, which can be sold at a discount or even at a low profit. What really continues to make money is the parts, repairs and services that need to be replaced for decades, just like the blades that are constantly being bought back. Although there are third-party repairers in the market, key components such as engine blades and landing gear are still highly dependent on the original supply. Therefore, China's purchase of Boeing is not only to add 200 new aircraft, but also to ensure that the Boeing fleet, which is still in service, can continue to receive parts, maintenance and technical support in the coming decades. Another important reason is to avoid over-reliance on a single supplier. If all future large passenger aircraft purchases are concentrated on Airbus, Airbus will have greater dominance in price, delivery schedule, and future negotiations. Maintaining Boeing as another major supplier helps keep the market competitive and reduces supply chain risk. In fact, this is not a strategy unique to China. Singapore Airlines and most of the world's major airlines are purchasing Boeing and Airbus aircraft at the same time to spread risks and retain more purchasing flexibility.

aircraft is a difficult business to make money?

surprisingly, aircraft manufacturing is not a lucrative business. As of April 2026, Boeing and Airbus have accumulated 16,683 undelivered orders. At the current production rate, new orders may even have to wait about 12 years for delivery. After more than a decade of orders, it sounds like a sure-fire business. The reality is just the opposite. Aircraft manufacturing is an industry with high investment, long research and development, and low fault tolerance. Every part, every certification, and every test requires a huge cost. Because if there is an accident, it involves human life. Plus, orders are often more than ten years away from signing to delivery. During this period, raw material and labor costs will continue to rise, but the price of aircraft is usually basically determined at the time of signing, and it is difficult for manufacturers to fully pass on costs, so profits are easily eroded by inflation.

Boeing is the most obvious example, with a loss of $11.8 billion in 2024. Even if the group as a whole returns to profitability in 2025, the department responsible for the manufacture of civil airliners continues to lose money. Its rival, Airbus, has a net profit margin of about 6 to 7 per cent, well below the 20 to 30 per cent or more of technology companies such as Apple and Microsoft. This data proves that selling planes is far from making money by selling software or mobile phones.

Why did Trump help Boeing pull orders for "losing money?

if Boeing's earning power is not outstanding, why does Trump attach so much importance to it? The reason is that Boeing sells more than just airplanes. Behind a Boeing airliner, more than 10,000 suppliers are involved in 50 states in the United States. It involves countless components such as engines, electronic systems, fuselage structure, landing gear, etc., so it depends on the participation of suppliers all over the world. So for Trump, the 200 aircraft not only represent billions of dollars in orders, but also support a huge manufacturing supply chain and tens of thousands of jobs. So the order is an economic outcome and a political report card that Trump can present to voters. Today, the airplane is not only a means of transportation, but also not only a commodity. It also represents manufacturing capacity, national industrial strength, and international political influence. China needs a stable aviation supply chain. The United States hopes to maintain manufacturing and employment, and Boeing orders are just a bargaining chip that both parties can accept.