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China Southern inks Airbus A330 purchase

By Wang Wen (China Daily)

08:22, December 06, 2012

China Southern Airlines Co Ltd, the largest carrier in Asia by fleet, said on Wednesday that it had signed an acquisition agreement with Airbus SAS to buy 10 A330-300 aircraft.

The acquisition of the wide-body aircraft for medium and long-haul routes, which will be delivered from 2014 to 2016, will "facilitate the internationalization of the company", the carrier said.

According to Airbus, the catalogue price of one Airbus A330-300 aircraft is $188 million.

China Southern said the amount it will pay, partly through financing arrangements with banking institutions and partly in cash, is lower than the catalogue price.

The airline said the new aircraft will help it to optimize its fleet structures and maximize operational efficiency.

The aircraft also will increase the carrier's available ton kilometers by 5.7 percent compared with the figure on Dec 31, 2011, the airline said.

Its acquisition of wide-body aircraft is in accordance with a call made earlier by Li Jun, deputy director of the Civil Aviation Administration of China, for carriers to buy more wide-body aircraft to relieve the pressure from growing demand and limited airspace.

Enhancing international networks is a main strategy of Chinese carriers, and wide-body aircraft are required for them to operate more international routes, business insiders said.

China Southern has been using Airbus A380s on its Guangzhou-Los Angeles route since Oct 12.

The super jumbo has performed very well on the route and its load factor remained above 60 percent in October, according to China Southern.

According to Airbus' global outlook for 2012 to 2031, 6,500 wide-body aircraft will be delivered globally and 46 percent of them will work in Asia.

Boeing Co forecast in September that China will need 1,190 wide-body aircraft over the next 20 years.

China Southern is not the first Chinese carrier to sign an acquisition agreement with Airbus after the European Union announced a one-year freeze on Nov 12 of its emission rules applying to overseas airlines.

China Eastern Airlines Corp Ltd announced on Nov 23 it would buy 60 A320 aircraft, which have a catalogue price of $5.39 billion.

The aircraft will be delivered from 2014 to 2017, China Eastern said.

Airbus reported in March that orders worth $12 billion from China had been suspended due to the EU's Emissions Trading Scheme.

ICBC Financial Leasing Co Ltd, Airbus' first Chinese customer after the ETS issue arose, signed an agreement in August with Airbus for a total of 50 A320s, including 30 A320neo aircraft.

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