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China Southern Airlines unit buys six Boeing 787s

by Staff Writers
Hong Kong (AFP) May 11, 2011
China Southern Airlines said its Xiamen Airlines unit has bought six 787 Dreamliners from Boeing, as the country's carriers boost their fleets to meet soaring demand.

The order, worth around $1.1 billion at list prices, will provide a fillip to Boeing, whose Dreamliner was heralded as the first of a new generation of fuel efficient planes but has been beset by production and delivery delays.

It is also further evidence of the pace at which airlines in China are having to move to keep up with demand in a fast-growing market and comes on the heels of a 17-fold increase in profit for China Southern.

The planes are due to be delivered between 2014 and 2015, and will boost Xiamen Airlines' fleet, which already stands at 71 Boeing jets on 150 domestic and regional routes, according to its website.

Boeing has struggled to fulfil the early promise of the mid-sized Dreamliner, whose heavy reliance on composite material and diverse manufacturing sites have complicated production.

The company first promised to begin deliveries to the 787's launch customer -- Japan's All Nippon Airways -- in 2008 but that has now been delayed until later this year.

The deal comes less than two months after China Southern, which owns 60 percent of Xiamen Airline, said its 2010 profit rocketed as demand for air travel booms in China with the carrier's passenger numbers rising 15.4 percent to 76.46 million.

A total of 267 million air passenger trips were recorded in the country in 2010, up 15.8 percent from the previous year, official figures showed, reflecting growing prosperity among the country's booming middle class.

China Southern has been ramping up its own fleet to meet that demand, saying in November that it had agreed to buy 36 planes from Airbus for $3.78 billion, while rival Air China said in March it would buy five of Boeing's new 747-8 passenger planes with a combined list price of $1.54 billion.

Also in March, Boeing said Hong Kong Airlines had placed a preliminary order for 38 planes worth up to $8.5 billion at list prices.

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

The head of China's civil aviation administration has said China will have about 5,000 aircraft transporting passengers and cargo by 2015, almost double the number presently being used.

China Southern did not reveal the actual price of the planes in the deal, but said in a statement it would be paying an amount "significantly lower" than the list price.

"The aggregate consideration for the acquisition will be partly payable by cash... and partly by financing arrangements with banking institutions," China Southern added.

Hong Kong-listed shares in China Southern closed about 2.6 percent lower at HK$4.14 (53 US cents) on Wednesday.

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Korean Air to spend $1.58 billion on passenger jets
Seoul (AFP) May 3, 2011
South Korea's flag carrier Korean Air said Tuesday it would buy a total of seven passenger planes from Airbus and Boeing for nearly $1.58 billion. The airline said the planes - five Airbus A330-200s and two Boeing B777-300ERs - would cost 1.685 trillion won ($1.577 billion) and be bought between May 2011 and September 2015. Airbus, the airliner manufacturing subsidiary of European aer ... read more

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