Airbus Group SE and Boeing Co. split a $9.9 billion order for wide-body jetliners from China Eastern Airlines Corp. as the nation’s second-largest carrier by passengers looks to expand international routes.
China Eastern ordered 20 Airbus A350-900 planes valued at $5.96 billion based on Jan. 2014 list prices, it said in a filing to the Shanghai stock exchange Thursday. The airline also ordered 15 787-9 Boeing Dreamliners valued at $3.9 billion at July 2014 prices. Carriers typically negotiate discounts on aircraft purchases.
Rapid growth of air travel in Asia is boosting orders for Boeing and Airbus, with China expected to surpass the U.S. as the world’s largest aircraft market in the next two decades. Economic growth is making air travel affordable to more people, prompting carriers there to expand their fleets.
China Eastern currently operates flights to Los Angeles, New York, San Francisco, Toronto and Chicago with 777s and plans to increase frequencies on these routes this year as part of an effort to boost international capacity by about 20 percent.
Bloomberg Business
China Eastern Airlines on Thursday placed an order for 35 wide-body jets from Boeing Co and Airbus Group, as the Shanghai-based carrier continues to build its long-haul fleet amid the country’s outbound travel boom.
Chinese airlines are adding flights to New York, Paris and Sydney from inland cities, while opening new routes to smaller cities in North America, Europe and Australia.
China Eastern, which has an equity tie up with Delta Air Line, aims to increase its market share this year on China-U.S. routes to 17 percent of total seats available, from 11 percent in 2015, according to its president Ma Xunlun.
Last year, 2.56 million Chinese people travelled to the United States, while some 2.1 million Americans came to China, according to the U.S. Department of Commerce and China National Tourism Administration. This year, outbound Chinese people will exceed 3 million, as U.S. government eases its visa policies.
China Eastern, which flies to New York, Los Angeles, Chicago and Hawaii, is attracting more and more transit customers from North Asia and South Eastern Asia who prefer to take China Eastern flights in Shanghai to North America, according to Ma.
Delivery of the 15 B787-9 and 20 A350-900 jets will start from 2018, the Shanghai-based carrier said.
Air China, China Southern Airlines and Hainan Airlines are also placing large aircraft orders. In October, China ordered 130 jets from Airbus during German Chancellor Angela Merkel’s China visit.
China Eastern alone would have more than 800 jets in its fleet by 2020, up from around 561 as of the end of last year, Ma told Reuters in an interview earlier this month.
Reuters
SHANGHAI, April 28, 2016 /PRNewswire/ — Boeing [NYSE: BA] and China Eastern Airlines today finalized an order for 15 787-9 Dreamliners. The order, valued at nearly $4 billion at current list prices, strengthens China Eastern’s expanding long-haul fleet.
“We are very happy to introduce the new 787 Dreamliners into our long-haul fleet,” said China Eastern Airlines Chairman Liu Shaoyong. “The addition of these next-generation, fuel-efficient airplanes will play a key role in supporting China Eastern’s strategy for international expansion, and enable us to realize profits in point-to-point routes across the Pacific Ocean, and between China and Europe.”
China Eastern plans to operate the new 787-9s on routes between China, North America and Europe, bolstering its competitiveness in the international long-haul market.
With growing air traffic demand, the carrier plans to increase frequencies on existing routes from Shanghai to Los Angeles, New York, San Francisco and Toronto, as well as their newly launched destination, Chicago. The routes are currently operated by the airline’s flagship 777-300ER airplane.
“China Eastern has been a long-standing Boeing customer and we are honored that the passenger-preferred 787 Dreamliner will join their world-class fleet,” said Ihssane Mounir, senior vice president, Northeast Asia Sales, Boeing Commercial Airplanes. “The combination of both the 777-300ER and 787-9 will provide the airline with market-leading economics as well as flexibility that will contribute significantly to their success operating long-haul flights to North America.”
The 787 family has proven to be an unmatched market opener, with more than 100 new nonstop routes already in service or announced, as well as an effective tool to increase frequency profitably, often in conjunction with the 777.
For China Eastern, operating both the 777 and 787 will allow the airline to continue growing its international presence with more capacity and cargo payload on key existing frequencies, while also providing the flexibility for further expansion in high-growth markets.
The 787-9 complements and extends the super-efficient 787 family. With the fuselage stretched by 20 feet (6 meters) over the 787-8, the 787-9 can fly more passengers and more cargo farther yet with the same exceptional environmental performance — 20 percent less fuel use and 20 percent fewer emissions than the airplanes they replace.
Headquartered in Shanghai, China Eastern Airlines is one of the three major airlines in mainland China. Flying a fleet of over 560 long-haul and short-haul airplanes with an average age of less than seven years, China Eastern serves nearly 100 million travelers annually and ranks the 7th largest carriers in the world in terms of passenger transportation volume.
More than 60 customers from six continents of the world have placed orders for more than 1,100 787s, making the 787 the fastest selling twin-aisle airplane in Boeing history. With this order, the 787 Dreamliner will have nearly 100 orders and commitments from Chinese customers.
Boeing
China Eastern orders 20x A350-941s and 15x 787-9s
