01/08/09, 03:10:47 UTC

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Chinese Airline Orders 55 Boeing 737s

chron.com

China Southern Airlines Co. said Monday it plans to buy 55 Boeing 737 aircraft to meet growing demand and to renew its fleet.

China Southern, the country's largest carrier by fleet size, said in a statement that it could not announce how much it was paying for the planes due to confidentiality requirements.

However, it said Boeing is charging the company "significantly lower" than the catalog price.

The planned order, subject to shareholder approval, involves an unspecified mix of 737-700 and 737-800 aircraft.

At catalog prices, 55 such models would cost between about $3.1 billion and $4.3 billion.

Guangzhou-based China Southern said that it will pay for the planes with a combination of cash and bank loans, and that the aircraft will be delivered from May 2011 to October 2013.

The announcement of the purchase came hours after a China Airlines B737-800 exploded into flames after arriving in the Japanese island of Okinawa from Taiwan. All 165 people aboard escaped unhurt, including the pilot. The airline is Taiwanese.

The accident's cause was not immediately clear, but Taiwanese aviation authorities ordered China Airlines and its subsidiary, Mandarin Airlines, to ground their 13 other B737-800s for inspections.

Japanese authorities ordered an inspection of all B737-800s owned by Japanese airlines, as well as some 737-700 models equipped with similar engines.

A Boeing spokesman did not immediately return a reporter's call seeking comment on the timing of the China Southern announcement, which followed a series of plane orders in the past year.

Earlier, China Southern bought another 37 Boeing 737-800s, six Boeing 777F freighters and 20 Airbus A320s.

Also Monday, China Southern announced it returned to profitability in the first half, helped by strong passenger demand and the appreciation of the Chinese yuan currency against the U.S. dollar.

The airline earned 308 million yuan ($41 million) for the six months ending June 30 compared to a net loss of 854 million yuan in the same period last year.

Revenue rose to 25.21 billion yuan ($3.3 billion) from 21.14 billion yuan a year earlier.

The figures were reported under Chinese accounting rules.

Under international accounting rules, China Southern's first-half net profit totaled 168 million yuan ($22.1 million), the company said, without providing the year-earlier figure.

The company said it booked a foreign exchange gain of 1.27 billion yuan ($167 million) in the first half from the yuan's appreciation. The yuan has risen more than 5 percent against the dollar since the end of last June.

 Printable Version  | published Aug 20, 2007