China Southern Airlines to buy 10 Airbus planes $2.27BN

BEIJING: China Southern Airlines announced yesterday it would buy 10 aircraft worth a total $2.27 billion from European aerospace giant Airbus, as a Chinese boom in air travel defies slowing economic growth. The carrier, one of China’s “big three” with the largest fleet by size, will take delivery of the A330-300 medium-to extended-range jets between 2017 and 2019, it said in a statement to the Shanghai stock exchange.

It was the company’s second major purchase this month following a $10 billion order for 110 planes from Boeing. China, the world’s second largest economy, is Asia’s biggest aircraft buyer as a growing middle class takes to the skies in everincreasing numbers. Earlier this month China’s budget carrier Spring Airlines announced plans to buy 60 aircraft from Airbus worth $6.3 billion at list prices. State-owned China Aviation Supplies Holding Group signed a deal with Airbus at the end of October, pledging the purchase of 100 A320 aircraft worth $9.7 billion at list prices. Yesterday’s announcement comes at a tumultuous time at China Southern. Its chairman Si Xianmin was put under investigation by authorities last month for “severe violations of discipline”, a phrase which typically refers to corruption. His company recorded a 48.4 percent year-on-year fall in net profit to 1.17 billion yuan ($186 million) in the third quarter, according to an earnings report.

The latest order comes despite slowing economic growth which aviation industry officials fear could hurt air travel. China logged its worst economic performance since the global financial crisis in the third quarter, with gross domestic product rising just 6.9 percent year-on-year. But Boeing estimates the country will add 6,330 new aircraft worth $950 billion to its commercial fleet by 2034. Airbus passed its 2015 orders target by October on the back of strong demand from China and Singapore. At the time, the company said that it had 6,741 jets on its order book, equivalent to ten years of production. —AFP