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China Southern Airlines orders 55 B737s

Monday 21/08/2017 - Source: The Star


China Southern Airlines Co. has announced plans to buy 55 Boeing B737 aircraft to meet growing demand and renew its fleet.


The airline, China's largest by fleet size, said in a statement late Monday that it could not disclose how much it was paying for the planes due to confidentiality requirements.

However, it said Boeing is charging the company "significantly lower'' than the catalog price.

The planned order, subject to shareholder approval, involves an unspecified mix of B737-700 and B737-800 aircraft.

At catalog prices, 55 such models would cost between about US$3.1 billion (euro2.3 billion) and US$4.3 billion (euro3.2 billion).

China Southern, based in the city of Guangzhou near Hong Kong, said that it will pay for the planes with a combination of cash and bank loans, and that the aircraft will be delivered from May 2011 to October 2013.

The announcement of the purchase came hours after a China Airlines B737-800 exploded into flames after arriving on Japan's Okinawa island from Taiwan.

All 165 people aboard escaped unhurt, including the pilot. The airline is Taiwanese.

The accident's cause was not immediately clear, but Taiwanese aviation authorities ordered China Airlines and its subsidiary, Mandarin Airlines, to ground their 13 other B737-800s for inspections.

Japanese authorities ordered an inspection of all B737-800s owned by Japanese airlines, as well as some 737-700 models equipped with similar engines.

A Boeing spokesman did not immediately return a reporter's call seeking comment on the timing of the China Southern announcement, which followed a series of plane orders in the past year.

China Southern earlier bought 37 B737-800s, six Boeing B777F freighters and 20 Airbus A320s.

Also Monday, China Southern announced it returned to a net profit in the first half of the year, helped by strong passenger demand and the Chinese yuan's appreciation against the U.S. dollar.

The airline's net profit for the six months ending June 30 was 308 million yuan (US$41 million), compared to a net loss of 854 million yuan (US$113 million) in the same period last year.

Revenue rose to 25.21 billion yuan (US$3.3 billion) from 21.14 billion yuan (US$2.8 billion) a year earlier.

The figures were reported under Chinese accounting rules.

Under international accounting rules, China Southern's first-half net profit totaled 168 million yuan (US$22.1 million), the company said, without providing the year-earlier figure.

The company said it booked a foreign exchange gain of 1.27 billion yuan (US$167 million) in the first half from the yuan's appreciation.

The yuan has risen more than 5 percent against the dollar since the end of last June.


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