China Eastern chooses Airbus

Steve · 04-17-2002, 01:42 PM

SHANGHAI, China (Reuters) -- China Eastern Airlines has signed an agreement to buy 20 Airbus A320 jets in a deal company sources valued at about $800 million.

China's second largest carrier will take delivery of the aircraft beginning 2003, Airbus Industrie said in a statement.

"Selection of the A320s will improve our operating efficiency thanks to the aircraft's commonality with our existing fleet," China Eastern President Liu Shaoyong said in the statement Tuesday.

China Eastern, one of the country's three top airlines with China Southern and Air China, now has 43 Airbus jets. They make up 60 percent of its fleet.

The jets, to be delivered over three years, will be fitted with engines made by CFM International, a joint venture of General Electric Co and France's Snecma.

Order worth about $800 million
"The order for the planes and engines cost about $800 million," the Eastern official told Reuters. The airline had ordered 45 CFM-56 engines, he said.

The catalogue price of an A320 is about $55 million including engines so the $800 million value implies a discount of about 27 percent.

The pricing of airliner deals, however, is rarely clear, especially since they can involve optional extras, such as additional training and support from the manufacturer.

China Eastern last week reported a 209 percent jump in net profits to 541.7 million yuan ($65.4 million) in 2001, largely due to a once-off tax break.

Booming demand at home
Company officials however see higher passenger and cargo traffic this year, helped by the recovering global economy and booming growth at home. Eastern will add two Airbus A319s this year and five A340-600s by 2004, officials have said.

"China's economy is growing at a fast pace and demand in the aviation market keeps rising," Eastern chairman Ye Yigan told reporters after the Airbus signing ceremony on Tuesday.

"China's market is different from overseas as we mainly depend on domestic demand," Ye said. The airline said in a statement most of the 20 new jets will be used to fly domestic and international routes from Shanghai, one of China's three aviation hubs and its financial capital.

China Eastern aims to complete in the first half of this year a government-driven merger with Yunnan Air and China Northwest Air to create a giant group, second largest in China by fleet size.

It has also set up a joint venture with small regional airline Wuhan Air and is in talks to invest in Sichuan Airlines.

China Eastern's Hong Kong-listed shares were up about 1.7 percent at HK$1.20 late Wednesday.

Wingman · 04-17-2002, 03:09 PM

Well, screw them!

Boeing has been bending-over-backwards to the People' Republic of China and look where it got them.

The Chinese Communists are probably just trying to gain more leverage on a future order.

continental sat · 04-17-2002, 03:22 PM

Just another airline making a big mistake!

04-17-2002, 04:22 PM

They already had Airbus aircraft in their fleet, both narrowbody and widebody, so it makes sense that they chose to add more A320s to their fleet. Though I prefer Boeing, this order does make a lot of sense for China Eastern.

continental sat · 04-17-2002, 05:42 PM

ooo I was not aware of that!

04-17-2002, 06:37 PM

No biggie. Incidentally, the operate the following: 9 A319s, 20 A320s, 10 A300-600Rs, 5 A340s, and 7 737-300s, in addition to some MD-11 and MD-90s. Looks like they'll be all Airbus real soon.

JeffR · 04-17-2002, 06:55 PM

Quote:

Originally posted by Wingman"
Well, screw them!

Boeing has been bending-over-backwards to the People' Republic of China and look where it got them.

The Chinese Communists are probably just trying to gain more leverage on a future order.

I guess you didn't even know about the big order placed by the PRC from Boeing at the end of last year that worth over a billion dollars.

So screw what?

JeffR · 04-17-2002, 06:59 PM

Quote:

Originally posted by CAL 757-300:
No biggie. Incidentally, the operate the following: 9 A319s, 20 A320s, 10 A300-600Rs, 5 A340s, and 7 737-300s, in addition to some MD-11 and MD-90s. Looks like they'll be all Airbus real soon.

A portion of the large order placed by the PRC from Boeing last year included several jets for China Eastern. So they may not be going "allbus" in the future.

Darryl · 04-17-2002, 08:03 PM

Not many folks turn down free airplanes, and that includes a cash strapped, atheist part of the world as the PRC.

justin · 04-20-2002, 01:50 AM

For political reasons it has been the policy of the PRC to split foreign purchases between several vendors from different countries, not just in airliners, but in almost all areas. They even made a contract for Tupolev airliners last year. China Eastern tends to favour Airbus, while China Southern favours Boeing, and Air China is mainly Boeing too. As far as Boeing falling over backwards to please China, so do all the people trying to sell equipment there, and I really can,t see the relevance of the atheist bit??

JeffR · 04-20-2002, 02:36 AM

Justin, well said, but save your strokes for other "fruitful" discussions. This thread is just leading into another A vs B bullcrap.

MHO

Scott · 04-20-2002, 04:09 PM

These orders have nothing to do with religion or the absence of thereof. Politics and $ rule, not the heart. If the west can separate fantasy from the concrete, we may avoid a middle-east style confrontation of mythologies. O.K, shields "up", I'm prepared to be nuked!

04-17-2002, 01:42 PM	#1
Steve Master Collector Join Date: Nov 1999 Location: Northern Virginia Posts: 838	China Eastern chooses Airbus SHANGHAI, China (Reuters) -- China Eastern Airlines has signed an agreement to buy 20 Airbus A320 jets in a deal company sources valued at about $800 million. China's second largest carrier will take delivery of the aircraft beginning 2003, Airbus Industrie said in a statement. "Selection of the A320s will improve our operating efficiency thanks to the aircraft's commonality with our existing fleet," China Eastern President Liu Shaoyong said in the statement Tuesday. China Eastern, one of the country's three top airlines with China Southern and Air China, now has 43 Airbus jets. They make up 60 percent of its fleet. The jets, to be delivered over three years, will be fitted with engines made by CFM International, a joint venture of General Electric Co and France's Snecma. Order worth about $800 million "The order for the planes and engines cost about $800 million," the Eastern official told Reuters. The airline had ordered 45 CFM-56 engines, he said. The catalogue price of an A320 is about $55 million including engines so the $800 million value implies a discount of about 27 percent. The pricing of airliner deals, however, is rarely clear, especially since they can involve optional extras, such as additional training and support from the manufacturer. China Eastern last week reported a 209 percent jump in net profits to 541.7 million yuan ($65.4 million) in 2001, largely due to a once-off tax break. Booming demand at home Company officials however see higher passenger and cargo traffic this year, helped by the recovering global economy and booming growth at home. Eastern will add two Airbus A319s this year and five A340-600s by 2004, officials have said. "China's economy is growing at a fast pace and demand in the aviation market keeps rising," Eastern chairman Ye Yigan told reporters after the Airbus signing ceremony on Tuesday. "China's market is different from overseas as we mainly depend on domestic demand," Ye said. The airline said in a statement most of the 20 new jets will be used to fly domestic and international routes from Shanghai, one of China's three aviation hubs and its financial capital. China Eastern aims to complete in the first half of this year a government-driven merger with Yunnan Air and China Northwest Air to create a giant group, second largest in China by fleet size. It has also set up a joint venture with small regional airline Wuhan Air and is in talks to invest in Sichuan Airlines. China Eastern's Hong Kong-listed shares were up about 1.7 percent at HK$1.20 late Wednesday.

04-17-2002, 03:22 PM	#3
continental sat USAF Join Date: Feb 2002 Location: Everywhere Age: 23 Posts: 605	Just another airline making a big mistake! __________________ USAF LoadMaster http://www.diecastaircraftforum.com/...tion-1395.html

04-17-2002, 05:42 PM	#5
continental sat USAF Join Date: Feb 2002 Location: Everywhere Age: 23 Posts: 605	ooo I was not aware of that! __________________ USAF LoadMaster http://www.diecastaircraftforum.com/...tion-1395.html

04-20-2002, 04:09 PM	#12
Scott Insane Collector Join Date: Mar 2000 Location: Escondido, Ca. USA Age: 50 Posts: 2,763	These orders have nothing to do with religion or the absence of thereof. Politics and $ rule, not the heart. If the west can separate fantasy from the concrete, we may avoid a middle-east style confrontation of mythologies. O.K, shields "up", I'm prepared to be nuked! __________________ Fly the Friendly Skies of United uniTED takes wing Feb 12, 2004

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04-17-2002, 03:09 PM	#2
Wingman Registered User Join Date: Aug 2000 Location: Bangor, ME Age: 34 Posts: 429	Well, screw them! Boeing has been bending-over-backwards to the People' Republic of China and look where it got them. The Chinese Communists are probably just trying to gain more leverage on a future order.

04-17-2002, 04:22 PM	#4
CAL 757-300 Guest Posts: n/a	They already had Airbus aircraft in their fleet, both narrowbody and widebody, so it makes sense that they chose to add more A320s to their fleet. Though I prefer Boeing, this order does make a lot of sense for China Eastern.

04-17-2002, 06:37 PM	#6
CAL 757-300 Guest Posts: n/a	No biggie. Incidentally, the operate the following: 9 A319s, 20 A320s, 10 A300-600Rs, 5 A340s, and 7 737-300s, in addition to some MD-11 and MD-90s. Looks like they'll be all Airbus real soon.

04-17-2002, 08:03 PM	#9
Darryl Senior Collector Join Date: Jun 2000 Location: La La Land Posts: 180	Not many folks turn down free airplanes, and that includes a cash strapped, atheist part of the world as the PRC.

04-20-2002, 01:50 AM	#10
justin Insane Collector Join Date: Feb 2000 Posts: 2,005	For political reasons it has been the policy of the PRC to split foreign purchases between several vendors from different countries, not just in airliners, but in almost all areas. They even made a contract for Tupolev airliners last year. China Eastern tends to favour Airbus, while China Southern favours Boeing, and Air China is mainly Boeing too. As far as Boeing falling over backwards to please China, so do all the people trying to sell equipment there, and I really can,t see the relevance of the atheist bit??

04-20-2002, 02:36 AM	#11
JeffR Master Collector Join Date: Jul 2000 Posts: 575	Justin, well said, but save your strokes for other "fruitful" discussions. This thread is just leading into another A vs B bullcrap. MHO