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China's Shenzhen Airlines to buy 46 Boeing planes

AFP

China's Shenzhen Airlines will buy 46 Boeing 737 planes, in a deal valued at $4.3 billion in list prices, its parent company Air China said in a statement Wednesday.

China is already Asia's biggest aircraft buyer, as a growing middle class takes to the skies in ever-increasing numbers.

The airline, based in the southern city of Shenzhen, will take delivery of the planes from 2016 to 2020, said the statement to the Shanghai stock exchange, where Air China is listed.

Shenzhen Airlines already owns a fleet of more than 100 passenger and cargo aircraft including Boeing 747s and 737s, as well as Airbus 320s and 319s, according to its website.

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The statement did not specify which variants of the single-aisle 737 the airline would purchase, but it said the company expected a discount from list prices.

The price of a jet in the 737 family ranges from $78.3 million to $113.3 million, Bloomberg News reported.

Boeing says its new 737 Max delivers eight percent lower operating costs than its main competitor, according to its website.

Air China, which owns a controlling stake in Shenzhen Airlines, on Wednesday closed down 0.92 percent in Shanghai and 1.59 percent lower in Hong Kong, where it is also listed.

Last year, Boeing forecast Chinese carriers will need nearly 6,000 new planes valued at $780 billion over the next 20 years, accounting for around 16 percent of world demand and nearly half of Asia's.

But China's economy, the world's second-largest, is slowing already and expected to soften further in the coming years -- a trend industry officials say could put a dent in air travel.

China's gross domestic product expanded 7.4 percent last year, the slowest since 1990. Growth weakened further to 7.0 percent in the January-March period, the worst quarterly result in six years.

The country also wants to challenge the global dominance of Boeing and Airbus by ensuring part of its vast aircraft market goes to a homegrown large passenger plane, the 168-seat C919, and a smaller regional jet.

bxs/kgo/cah