Air China announces $6.3B Boeing deal

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Posted 16 July 2008 @ 05:41 pm HKT

BEIJING - Air China Ltd. said Wednesday it plans to buy 45 Boeing Co. aircraft in one of China's biggest airliner purchases.

An Airbus A-380 approaches to land during a flight display at the Farnborough aerospace show, in Farnborough, England, Tuesday July 15, 2008. The world's largest air show opened Monday with several new orders and aerospace executives upbeat about the...

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The order will include 15 Boeing 777 and 30 Boeing 737 aircraft, Beijing-based Air China said on its Web site. It said the list price for the aircraft is $6.3 billion but the final price paid would be lower than that.

Air China said the purchase would increase its fleet capacity by about 35 percent and help to reinforce Beijing's status as a transportation hub.

A Boeing spokeswoman in Beijing, Dai Ni, said she could not confirm that Air China and Boeing had agreed to a sale.

Air travel in China is forecast to grow by 9 percent annually in coming years, driven by a boom that saw the country's economy grow by 10.6 percent in the first quarter.

Air China's first-quarter profits jumped 147 percent, helped by the travel boom and the rise of China's currency, the yuan, against the U.S. dollar. Chinese carriers benefit from a stronger currency because they pay dollars for fuel.

Regulators are reportedly considering plans to restructure China's airlines to make them more efficient and able to compete with bigger, richer foreign carriers.

Air China is trying to establish itself as the dominant carrier amid a struggle by Chinese airlines to modernize. Air China's parent, China National Aviation Holding Co., tried to buy a stake in rival China Eastern Airlines Co. this year but was rebuffed.

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