China’s Government has confirmed it is placing a bulk order for 70 Boeing 737s on behalf of eight of the country’s airlines - and that it plans to soon sign orders for another 80 of the type.
The order announcement came today during a visit to Beijing by US president George W Bush. China likes to unveil major purchases of foreign goods during high profile political visits and this deal is in part aimed at easing US concerns over the growing trade imbalance between the two countries.
Late last week industry sources in Hong Kong told Air Transport Intelligence that Boeing had been working for weeks to secure a bulk 737 order during Bush’s 19-21 November visit. The sources said Boeing was hoping the order would be for as many as 150 aircraft. Such deals are highly political in nature and China often decides only on the day of the commitment how many aircraft it will cover.
A Boeing representative says in an email that the 70-aircraft deal is valued at $4 billion and that it is for both 737-700s and -800s. The representative does not say which airlines will be allocated the aircraft, although more than half are thought to be for China Southern Airlines and its Xiamen Airlines subsidiary. China Southern said earlier this year that it was seeking final approval for a 45-aircraft 737-700/800 deal.
The official China Daily newspaper says on its website that other airlines to be allocated aircraft from the bulk order include Air China, China Eastern Airlines, Hainan Airlines, Shandong Airlines, Shanghai Airlines and Shenzhen Airlines. Deliveries will take place between 2006 and 2008.
It also reveals that the Chinese Government “will soon sign another purchase agreement with Boeing for 80 more 737 aircraft”.
As China’s economy is a planned one the country’s carriers must seek many approvals before acquiring aircraft from Boeing or other manufacturers. After final approval is granted state-owned China Aviation Supplies Import & Export Group signs a general terms agreement with a manufacturer, after which the airlines that are allocated aircraft finalise purchase agreements directly.
China’s domestic air transport market has been growing at a rapid rate and many airlines have been seeking approval to order more aircraft from both Airbus and Boeing. The two manufacturers have said they expect many more narrowbody orders from China in the next year or two. Over the past year several Chinese airlines have placed orders for widebody Airbus A330s and Boeing 787s.
Source: Flight International
