Zhejiang Loong Chinese Airlines Orders 20 Airbus Planes

Image: Zhejiang Loong Chinese Airlines Orders 20 Airbus Planes Airbus CEO Fabrice Bregier with model of the Airbus 320.

Thursday, 26 Sep 2013 08:28 AM

By Clyde Hughes

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China's Zhejiang Loong Airlines announced it was ordering 20 planes from Airbus, after two other firms did the same Wednesday.

Agence France-Presse reported that three Chinese companies made public their intentions known to buy the planes at the Aviation Expo China in Beijing. BOC Aviation, an aircraft-leasing company, reported it ordered 25 planes, and Qingdao Airlines announced it will purchase 23 planes along with Zhejiang Loong Airlines' 20. 

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The deals together are worth more than $6.75 billion.

Zhejiang Loong Airlines, an airline based in the Hongzhou in eastern China, signed a memorandum of understanding for the 20 planes, according to an Airbus news release Wednesday. China's Civil Aviation Administration recently approved the airlines for the passenger flights. 

"The Airbus A320 family aircraft is ideal for start-up airlines with clear advantages in operational reliability, economics, cabin space and its commonality between different types of Airbus aircraft, which will help operators to reduce cost on training and maintenance,” Liu Qihong, chairman of Zhejiang Loong Airlines said in the Airbus release. "I believe the Airbus A320 aircraft will help us to achieve the goal of building intensive domestic and international networks around Hangzhou."

John Leahy, Airbus's chief operating officer for customers, told AFP that the orders are a "vote of confidence in the long-term appeal of our popular A320 family."

The Age reported the deals are a huge boost for the Airbus, which lost its aircraft global sales lead to its American competitor Boeing Co. last year. Airbus estimates it can sell $4.4 trillion in aircrafts over the next 20 years because of potential sales in India and China, along with the growth of low-fare carriers.

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"It seems China is encouraging local investment into the sector as new airlines can help boost domestic consumption and economy," Kelvin Lau, a Hong Kong-based analyst at Daiwa, told The Age. "In the short term, competition on certain routes would become fiercer and the prolonged problems of airspace congestion and pilot shortage may get worse."

At least one analyst said he doubted the long term viability of the Chinese market.

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