Air China places $6.5bn order for 20 Airbus planes

Air China. (Photo: Twitter/@AirChinaNA)

Beijing,  China’s flag carrier has struck a sale agreement for 20 Airbus aircraft at a cost of around $6.54 billion, the company said on Friday.

In an announcement sent to the Hong Kong stock exchange, Air China said that the planes, of the wide-body A350-900 type, were set to be delivered over several batches between 2020-22, reports Efe news.

“The transaction will expand the overall fleet capacity of the group and optimize its fleet structure,” read the statement.

“The company expects the new Airbus aircraft will deliver more cost-efficient performance and provide more comfortable services to its passengers,” it added.

The purchase was approved at the company board’s 13th meeting of the fifth session, though it is still subject to approval by the relevant government authorities.

The airline said it had obtained, after “arm’s length” negotiations, significant price concessions in the form of credit memoranda that may be used either for the final payment of for purchasing other goods and services from Airbus.

In addition, Air China said it expected that the transaction would have no material impact on its cash flow and business operation.

This order will bring Air China’s total tally of long-haul A350-900s to 30 and is expected to strengthen its fleet’s capacity by nearly 10 per cent.

Airbus at the half-year mark had 11 more cancellations than orders for that model this year; so Air China’s deal, once in the books, will help Airbus into positive territory with the important jet programme, according to Dow Jones.

By the end of 2018, Air China had a fleet of 669 passenger aircraft, of which 329 were manufactured by Airbus, a France-based European multinational, and 335 belonged to Airbus’ chief rival, the US-based Boeing.

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