Airbus wins US$4.2b orders from China startup firms

HONG KONG: Airbus SAS, the world’s second biggest planemaker, won orders for US$4.2bil of single-aisle planes from two Chinese startups amid rising travel and the government’s deregulation of the nation’s civil aviation sector.

Qingdao Airlines, a newly established private carrier, agreed to buy 23 A320s in a deal valued at US$2.26bil, based on Airbus list prices. Zhejiang Loong Airlines, recently approved by the regulator, signed an initial agreement for 20 A320s, valued at US$1.91bil. Airlines usually get discounts from list prices.

The deals are a boost for Toulouse, France-based Airbus as the planemaker expects to deliver more than 100 aircraft this year to customers in China.

Airbus, which lost the global sales lead to Boeing Co last year, has predicted airlines globally will buy planes valued at US$4.4 trillion in the next two decades, driven by demand in India and China and global growth among low-fare carriers.

“It seems China is encouraging local investment into the sector as new airlines can help boost domestic consumption and economy,” said Kelvin Lau, a Hong Kong-based analyst at Daiwa Securities Group Inc.

“In the short term, competition on certain routes would become fiercer and the prolonged problems of airspace congestion and pilot shortage may get worse.” — Bloomberg