China Southern places order to buy 38 Boeing aircraft

-A Monitor Report 01 Nov, 2017  |    -      +
Shanghai : China's largest airline by passenger numbers_ China Southern Airlines has signed a deal to buy 38 aircraft from US plane maker Boeing Co with a combined price tag of $5.65 billion.

The airline has placed an order for eight Boeing B777-300ERs and 30 B737-800s in an effort to facilitate its expansion at Beijing's new airport, which is scheduled to open in 2019. The deal, which is worth US$5.7 billion at list prices, is contingent on regulatory approval.

These aircraft are scheduled to be delivered between 2019 and 2020; five B777-300ERs and 12 737-800s will be delivered in 2019 and the rest will be delivered in 2020. The Guangzhou-based carrier noted the ...

The carrier said the deal would help its "two hub" strategy with plans for a presence at a second major airport being built in Beijing as well as its hub in southern Guangzhou. It added this would "boost the firm's competitiveness in the market".

The new Beijing airport is scheduled to open in October 2019. It will relieve pressure on Beijing's existing international airport, currently the world's second largest by passenger volume.

Two of China's three major airlines, China Southern and China Eastern Airlines Corp, will relocate to the airport on completion, accounting for roughly four-fifths of the new airport's total traffic.

China Southern said the actual price it would end up paying for the Boeing aircraft was still under negotiation, but that it would likely be substantially lower than the listed price as is customary for major airlines.

In April, China Southern signed a deal worth nearly US$6 billion to buy 20 aircraft from Boeing's European rival, Airbus SE.

Airbus has lagged Boeing in net orders in the first nine months of the year, with 271 at the end of September versus 498 for its US rival.

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