Business

Boeing gets $4.6bn order from China's Shandong Airlines

  • 22 April 2014
  • From the section Business
Boeing 737 model on display
Image caption The 737 is Boeing's best-selling plane, with 8,000 jets already delivered

China's Shandong Airlines has said that it has placed an order for 50 Boeing 737 aircraft, worth $4.6bn (£2.7bn) at list prices.

Chinese carriers have been looking to increase their fleets to cater for a growing domestic demand for air travel.

When contacted by the BBC, Boeing said it had received an order from the airline, but refused to confirm the number of planes.

The order still needs to be approved by the Chinese government.

"Boeing is delighted with Shandong Airlines' strong interest in the efficient 737 airplane and we continue to work with them and the Chinese government to determine the best way to meet their requirement," the planemaker said in a statement.

Growing demand

A growing number of airlines are looking to purchase fuel-efficient aircraft, triggering competition among plane makers.

The 100-200 seat narrow-body, or single-aisle, aircraft market is forecast to generate $20 trillion (£12.8tn) worth of sales for plane makers over the next 20 years.

The sector is currently dominated by Airbus's A320 and Boeing's 737 aircraft.

If approved, the latest order from China will be a big win for Boeing which is not only competing with Airbus but also likely to face competition from China's state-owned Commercial Aircraft Corporation of China (Comac).

Comac is also targeting the 100-200 seat plane market with its C919 aircraft.

The firm has already got 400 orders for the C919 - mostly from China - and many analysts expect it to win more orders, especially from domestic carriers.

Profit alert

Also on Tuesday, rival Chinese airline Air China warned that first quarter profits will be up to 65% lower compared with last year as a result of the fall in the yuan's value.

The state-owned airline, which funds much of its aircraft purchases in US dollars, reported a net profit of 249m yuan (£23.7m) in the first quarter of 2013.

Rival China Southern Airlines warned on profits for the same reason last week.

The yuan fell by 2.7% against the US dollar in the first quarter of the year.

"The financial expenses of the company substantially increased as compared with the corresponding period of 2013 due to the exchange losses," Air China said in a statement.

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