Air China, HNA pre-order 53 aircraft worth US$10.6b

PUBLISHED : Wednesday, 09 March, 2011, 12:00am
UPDATED : Wednesday, 09 March, 2011, 12:00am

Air China and HNA Group, parent of Hong Kong Airlines and Hainan Airlines, signed preliminary agreements yesterday to buy 53 passenger and freight aircraft - most from Boeing, with others from Dassault Falcon and Gulfstream.

Prices were not disclosed, but the planes are worth about US$10.6 billion at list prices, although the airlines are likely to get big discounts. No details were provided about when these initial pacts would be finalised into concrete orders, and aviation sources indicated it could be months before final contracts were signed.

If the deals are confirmed, Air China would become the third airline, and the first in China, to order the Boeing 747-8 Intercontinental airliner, and Hong Kong Airlines would become the second China carrier to order the Boeing 787-900. Air China ordered 15 of them in 2005.

Under the terms of the deals, signed on the opening day of the Asian Aerospace show at Chek Lap Kok airport, Air China plans to order five Boeing 747-8s. HNA signalled its intention to order 30 Boeing 787-900s, two Boeing 787-800s, six Boeing 777 freighters, five Dassault Falcon 7X business jets and five Gulfstream G450 corporate jets. The 787-900s will be ordered through Hong Kong Airlines.

Speaking ahead of the signing ceremony, Tan Xiangdong, managing director of Hainan Airlines, gave no indication which airline would operate the 777s. But the 787-800s would be fitted with corporate jet interiors and, with the Gulfstreams and Falcons, would be operated by HNA's executive jet companies, Beijing Capital Airlines and Deer Jet.

'We've been waiting for the 787 aircraft for a while,' Tan said. He said that for the corporate jets 'our clients in China are very diversified. Our business is very well orientated to people who prefer different types of aircraft.'

There was confusion about the inking of a similar preliminary agreement between Airbus and HNA for what aviation sources said was 10 wide-bodied aircraft. The aircraft manufacturer was billed with the other three plane builders as being part of the signing ceremony ahead of the event, but its name was missing from the billboard used as the backdrop to the ceremony.

One source said Airbus pulled out because it was annoyed that it was signing its agreement on the same stage as the other manufacturers.

Asked if Airbus withdrew after being upset, an Airbus spokeswoman at the firm's headquarters in Toulouse, France, said: 'Not at all. Not at all. Not at all.' She said the invitation to the ceremony was 'sent without our approval'.

The 787-900 is a longer-range version of the 787-800 and will be capable of carrying 250 to 290 passengers up to 15,750 kilometres. It will allow a significant expansion of Hong Kong Airlines' route network. The 747-8, which can carry 400 to 500 people, is 12 per cent cheaper to operate and has 16 per cent better fuel economy than the 747-400, the fourth edition of Boeing's jumbo jet. Some 33 passenger 747-8s have been ordered.

Randy Tinseth, vice-president of marketing for Boeing, said the first delivery of the aircraft, to German airline Lufthansa, would take place in the fourth quarter of this year.

Boeing said the Air China 747 deal 'requires Chinese government approval', and it was 'working with Hong Kong Airlines to finalise the agreement' to buy the 38 Boeing aircraft.