Britain’s Farnborough International Airshow is one of the world’s venues for major aviation deals, and Boeing has just confirmed three big sales there, two to Chinese airlines and one, the most mysterious, to an unidentified customer operating though a bank.
The combined orders are worth USD 8.35 billion (AUD 11 billon) at list prices, although list prices are unlikely to be what was paid.
Boeing and Xiamen Airlines announced a Memorandum of Understanding for the purchase of up to 30 737 MAX 200 aircraft, valued at up to USD 3.39 billion at current list prices. The deal was announced yesterday at the 2016 Farnborough International Airshow.
The airline, which is already a 737 MAX customer, sees the MAX 200 as a fit for its low cost subsidiaries, including Jiangxi Airlines and Hebei Airlines.
Both parties “will work closely to finalize the agreement”, a statement said. That requires the approval of Xiamen Airlines’ board and the China Southern Airlines Group board, as well as the Chinese Government.
Xiamen Airlines, a stated-owned subsidiary of China Southern Airlines, currently operates an all-Boeing fleet of more than 140 planes including six 787 Dreamliners, 130 Next-Generation 737s and four 757s. The carrier plans to grow its operational fleet to 200 planes by the end of the decade and looks to expand regionally with the new 737 MAX.
Meanwhile, Boeing and Donghai Airlines announced that airline’s intent to purchase 25 737 MAX 8s and five 787-9 Dreamliners. The agreement is valued at more than USD 4 billion at current list prices.
Shenzhen-based Donghai Airlines previously ordered 15 Next-Generation 737-800s and 10 737 MAX 8s in 2013. Donghai continues to fulfil its strategic plan to convert its business model from cargo services to passenger services.
Donghai Airlines started freighter operations in 2006. The carrier expanded to offer passenger services in 2014. Donghai Airlines currently has a fleet of 11 Boeing 737-800s serving for more than 10 cities across China. With extended air route network, the Shenzhen-based carrier is attempting to build a modern medium-scale airline.
Finally, the bank. The bank is no mystery but the purchaser is. Boeing and Standard Chartered Bank announced an order for 10 Next-Generation 737-800s. The order, valued at USD 960 million at current list prices, was attributed to “an unidentified customer on the Boeing Orders and Deliveries website”.
Speaking at Farnborough, Kieran Corr, head of aviation finance at Standard Chartered, said: “We are excited about adding these new Boeing aircraft to our fleet. Our current portfolio consists of over 110 aircraft on operating lease to airline clients globally. We are committed to continuing to grow and diversify our client base over the next couple of years.
“We are a leading international banking group, with around 84,000 employees and a 150-year history in some of the world’s most dynamic markets. We bank the people and companies driving investment, trade and the creation of wealth across Asia, Africa and the Middle East.
“Our Aviation Finance business is a leading provider of cost-efficient, lease-based and asset-based financing solutions with specialist teams in Dublin, London, Hong Kong and Singapore. Solutions include: Sale and Leasebacks; Aircraft finance leases; Islamic finance leases; Capital market solutions; Fuel and interest rate hedging products; and export credit advisory.”
Edited by Peter Needham