Airbus Lands China Southern Deal for up to $6 Billion

China Southern

In 2016, the government-owned airline reached the 700 mark of aircraft owned, making it the largest fleet in Asia and the fourth-largest in the world. China Southern

Skift Take: China Southern shows an enormous appetite for buying aircraft. It may buy about 300 planes by 2020, bringing its total to 1,000. That’s more than American Airlines is expected to own by then.

— Sean O’Neill

China Southern Airlines Co. said it plans to buy 20 widebody aircraft from Airbus SE in a deal worth about $6 billion, according to a filing to the Hong Kong stock exchange Wednesday.

The Guangzhou-based company said it will acquire the A350-900 jets, each with a list price of $298.9 million. Discounts are customary for such large orders.

The state-owned carrier, which recently agreed to sell a sell a minority stake to American Airlines Group Inc., plans to expand its fleet to 1,000 by 2020 from 700 now, according to Chairman Wang Changshun. The carrier has been adding routes to Australia, New Zealand and countries in Southeast Asia as it competes with China Eastern and Air China.

China Southern and its units have ordered more than $15 billion of new aircraft from Boeing Co. and Airbus since 2015 as more people fly in the world’s most populous nation. The International Air Transport Association predicts China will surpass the U.S. to become the world’s biggest air travel market in terms of passengers by 2024.

©2017 Bloomberg L.P.

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Ryan Wolkov

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Author: Ryan Wolkov

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