Air China's Board Approves Plan to Buy 100 Aircraft from Airbus

By Joanne Chiu

HONG KONG--The board of Air China Ltd. (0753.HK) has approved a plan to buy 100 aircraft from Airbus, a unit of European Aeronautic Defence & Space Co. (EAD.FR), in a deal that is worth US$9.15 billion in list prices, as the Chinese flag carrier seeks to expand its fleet.

The Beijing-based carrier said in a statement to the Shanghai Stock Exchange that its board Tuesday approved a plan to buy the Airbus aircraft, as well as retire six Airbus 340 jets. It didn't disclose further details.

Company Secretary Rao Xinyu told the Wall Street Journal that the carrier and unit, Shenzhen Airlines Ltd., are discussing the planned purchase with the aircraft maker, which mainly involves the narrow-body Airbus 320 series aircraft.

The Chinese carrier, which has yet reach a final agreement with the aircraft maker, didn't disclose the purchase prices. The average list price of an Airbus 320 aircraft is US$91.5 million, according to Airbus's website, though aircraft purchasers typically get discounts from list prices.

The proposed deal comes after a previous move by the Chinese carrier in March to buy a total of 31 passenger aircraft and freighters from Boeing Co. (BA), with a combined list price of $4.83 billion, as it seeks to expand capacity and improve efficiency.

It also comes after two Chinese carriers--state-run China Eastern Airlines Corp. (0670.HK) and China Southern Airlines Co. (1055.HK)--agreed to buy a total of 70 aircraft from Airbus in late 2012.

Write to Joanne Chiu at [e-mail]

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