by Staff Writers
Hong Kong, China (AFP) Dec 5, 2012
China Southern Airlines, the country's largest airline by fleet size, said Wednesday it will buy 10 Airbus A330-300 aircraft in a deal worth $1.88 billion at list price to boost its capacity.
The airline said the acquisition will "facilitate the strategic change and the internationalisation of the company", the firm said in a statement to the Hong Kong stock exchange where it is listed.
"The Airbus aircraft will be delivered in stages to the company during the period commencing from 2014 to 2016," the airline said, adding that the acquisition will be financed through internal resources and bank loans.
The airline said the purchase will enhance its "competitiveness" and increase the carrier's available tonne kilometre -- a measurement for airline capacity -- by 5.7 percent, when the new aircraft are delivered.
China Southern Airlines did not announce the actual price it was paying for the 10 mid-sized passenger aircraft, which are worth a total of $1.88 billion at list price, but said it received "certain price concessions" from Airbus.
Airlines usually get discounts from planemakers for large orders.
The deal came two weeks after rival China Eastern Airlines, a smaller Shanghai-based carrier, ordered 60 Airbus A320 in a deal worth $5.39 billion to satisfy the country's booming domestic travel demand.
The two deals came less than a month after the European Union caved in to critics on its contested carbon tax on air travel by freezing for a year a plan to force non-EU airlines to pay for carbon emissions.
China and India had been at the forefront in opposing the scheme. The two countries had barred their airlines from complying with the EU carbon fee.
Air travel demand in China has increased in line with the country's decades of surging economic growth that have made it the world's second-biggest economy and seen its increasingly wealthy consumers take to the skies.
An industry body said in November that China will need 4,960 commercial planes over the next 20 years at a total of $563 billion, as demand for air travel is expected to soar.
Guangzhou-based China Southern Airlines in February ordered 10 extended-range versions of the twin-engine Boeing 777 in a deal valued at nearly $3 billion.
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