Chinese airlines buy 43 Boeing jets at HK air show

Associated Press
Visitors tour the Bombardier Global Express XRS corporate jet during the Asian Aerospace Show in Hong Kong Tuesday, March 8, 2011. Canada's Bombardier, Brazil's Embraer, and other makers of smaller jets are also on hand at the air show, underscoring their desire to cash in on opportunities for sales of corporate and private jets. (AP Photo/Kin Cheung)
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Chinese airlines announced a batch of deals to buy airplanes from Boeing and other Western plane makers at a major Asian air show on Tuesday, underlining the rapid expansion of China's aviation market.

Flag carrier Air China and Hong Kong Airlines plan to buy planes from Boeing Co. worth about $10 billion at sticker prices, with Air China becoming the first Chinese airline to order the 747-8 Intercontinental jet. HNA Group, the parent company of Hong Kong Airlines and Hainan Airlines, also signed agreements to buy smaller jets from Gulfstream and Dassault Falcon.

Chicago-based Boeing unveiled its long-range market forecast, predicting that the Asia-Pacific region will overtake North America and Europe as the world's biggest air transport market over the next 20 years. Rival Airbus SAS made a similar prediction on Monday.

"As we look to the future, we look to Asia. Growth in this market will clearly change the landscape of aviation," said Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes.

Boeing forecast that Asia will need 10,320 new airplanes over the next 20 years, or about a third of the world total. Air traffic growth is forecast at 6.8 percent a year, higher than the global average of 5.3 percent.

In a deal announced at the start of the Asian Aerospace Expo and Congress 2011, Air China said it would buy five 747-8 passenger planes — Boeing's newest jumbo jet.

Boeing and Air China didn't say how much the deal was worth. At list prices it would be about $1.6 billion but airlines typically get big discounts.

Air China will use the planes to expand its international routes. The jets can carry 467 passengers and feature a new wing design and upgraded flight deck.

The deal still needs Chinese government approval.

Boeing also signed a preliminary agreement with HNA Group's Hong Kong Airlines for 30 787-9s, six 777 freighters, and two 787-8 VIP jets.

HNA Group which also operates Hainan Airlines, China's fourth biggest airline, also signed preliminary deals to buy five Gulfstream G450 and G550 jets and five Dassault Falcon 7Xs.

The Gulfstream and Dassault deals highlighted the growing market for private and corporate jets in China, which is reckoned to be the world's second biggest after the Middle East.

As China's economy continues to expand strongly, aircraft makers expect greater demand from business executives and the rich for private jets.

For Dassault, "it's uncommon to sell five aircraft in one contract," Jean Michel Jacob, vice-president of international sales, said. It's more common to sell 7X jets, with a list price of $53 million, one by one.

Jacob, who recently relocated to Beijing, said he aims to sell about 100 jets in China over the next 10 years, and forecasts demand for 700 to 900 private and corporate jets in China over the same period.

The three-day show, which is being held at an exhibition center near Hong Kong's airport, doesn't feature flying demonstrations or military hardware and is not open to the public.

But potential buyers, many of them from mainland China, did get a chance to check out 21 jets on display, ranging from a Hawker Beechcraft King Air 350i nine-passenger turboprop to a Boeing Business Jet, capable of seating up to 18 people.

Jets from Canada's Bombardier, Brazil's Embraer and other makers were also on hand, underscoring their desire to cash in on opportunities for sales of corporate and private jets.

"Chinese companies are now investing overseas so they need to travel to parts of Africa, South America, Australia which they wouldn't do in the past," said David Dixon, Bombardier's regional vice president of business aircraft for China and Asia Pacific.

"Traditionally people came to China to get things made. Now China's going overseas to buy and manufacture things, buying companies, so the dynamic is changing hugely."

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