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China Eastern to buy 50 Airbus airliners
Published on: 2010-12-31
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HONG KONG — China Eastern Airlines said Thursday it had agreed with Europe-based Airbus to buy 50 A320 airliners with a list price of 3.22 billion dollars, in the latest sign of the country's aviation boom.

China Eastern said in an announcement to the Hong Kong stock exchange the aircraft would be delivered in stages from 2012 to 2015 and would expand its capacity by 11.24 percent including the fleet of its Shanghai Airlines subsidiary.

The airline did not disclose the price of its acquisition but said the Airbus consortium had granted it "significant price concessions... which will mainly affect the depreciation of the aircraft in the operation cost of the company."

The announcement marks the latest in a line of large deals by some of the bigger players in China's burgeoning aviation market.

Last week Shandong Airlines said it planned to buy 15 Boeing passenger planes worth up to 1.2 billion dollars, to be delivered between 2014 and 2015.

In November, Air China said it had agreed to buy 20 passenger planes from Airbus in deal worth 4.49 billion dollars. Half the planes would be A330s and the other half were to be A350 series aircraft, the company said.

Also in November, China Southern Airlines said it had agreed to buy 36 planes from Airbus for 3.78 billion US dollars.

In September, Hong Kong-based carrier Cathay Pacific said it had confirmed an order for 30 long-range A350 Airbus aircraft with a book price of 7.82 billion dollars -- the biggest single order in the carrier's history.

China's rapidly expanding economy has seen the country's aviation sector grow at a blistering pace over the last few years, with few analysts seeing any likelihood of a slowdown.

Leading aircraft manufacturers are vying for market share as the Chinese demand for civil airplanes booms.

Boeing said in November that it expected China's civil aircraft fleet to more than triple over the next 20 years, with 5,180 planes by 2029 compared with 1,570 last year.

"China is one of the world's fastest growing and dynamic aviation markets, driven by the urbanisation of China, the growth of its economy and an ever increasing personal wealth," Randy Tinseth, vice president of marketing for the Boeing, told a November 18 press briefing in Beijing.

Chinese airlines will need 4,330 new jets valued at 480 billion dollars over the next two decades, compared with global demand of 30,900 units during the period, according to Boeing.

But the head of China's civil aviation administration offered a more bullish forecast last month, saying the country would have up to 5,000 aircraft to transport passengers and cargo by 2015, according to state media.

Airbus and Boeing are also facing a stiff challenge from inside China.

State-backed plane maker Commercial Aircraft Corporation of China in November won orders for 100 of its new C919s from Chinese airlines.

The single-aisle C919 can seat up to 190 passengers and is seen as a potential competitor to the Airbus A320 and the Boeing 737.


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