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China Southern Airlines Orders 110 Planes Worth $10 Billion from Boeing

Image: China Southern Airlines Orders 110 Planes Worth $10 Billion from Boeing

Thursday, 17 Dec 2015 07:07 AM

China Southern Airlines has ordered 110 planes from Boeing worth more than $10 billion at list prices, the airline said Thursday, as a Chinese boom in air travel defies slowing economic growth.

The carrier, one of China's "Big Three" with the largest fleet by size, will purchase 30 Next-Generation 737 and 50 737 MAX planes valued at $7.24 billion at list prices, it said in a statement to the Shanghai stock exchange.

The company's Xiamen Airlines unit will buy an additional 30 737 MAX models valued at $2.88 billion, it said in a separate statement.

China, the world's second-largest economy, is already Asia's biggest aircraft buyer as a growing middle class takes to the skies in ever-increasing numbers.

Earlier this month, China's budget carrier Spring Airlines announced plans to buy 60 aircraft from Boeing rival Airbus, worth $6.3 billion at list prices.

State-owned China Aviation Supplies Holding Group also signed a deal with Airbus at the end of October, pledging a purchase of 100 A320 aircraft worth $9.7 billion at list prices.

But Thursday's announcement comes at a tumultuous time at China Southern.

The company's chairman, Si Xianmin, was put under investigation by Chinese authorities in November for "severe violations of discipline", a phrase which typically refers to corruption.

His company recorded a 48.4 percent year-on-year fall in net profit to 1.17 billion yuan ($186 million) in the third quarter, according to an earnings report.

The listed unit confirmed the investigation, saying it continued to operate in the "usual and ordinary" course of business in a statement.

The major Boeing order comes despite slowing growth in the Chinese economy, which aviation industry officials fear could hurt air travel.

China logged its worst economic performance since the global financial crisis in the third quarter, with gross domestic product rising just 6.9 percent -- its lowest level in six years.

Chicago-based Boeing has estimated that China will add 6,330 new aircraft worth $950 billion to its commercial fleet by 2034.

And the company is investing on those forecasts, announcing in September it had reached deals with Chinese firms to sell 300 aircraft worth some $38 billion, and will set up a completion centre for its narrow-body 737 airliners in China -- the firm's first outside of the US.

"China's rapidly growing aviation market plays a crucial role in our current and future success," said Boeing chairman Jim McNerney at the time.


© AFP 2017

   
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China Southern Airlines has ordered 110 planes from Boeing worth more than $10 billion at list prices, the airline said Thursday, as a Chinese boom in air travel defies slowing economic growth.The carrier, one of China's Big Three with the largest fleet by size, will...
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2015-07-17
Thursday, 17 Dec 2015 07:07 AM
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