Farnborough Air Show

Boeing Reinforces Chinese Connection with $8B in Deals

 - July 12, 2016, 12:05 AM
Boeing’s 787 Dreamliner is part of a new order from Shenzhen-based Donhai Airlines, which also includes 25 737 Max 8 airframes.

Chinese airlines gave Boeing a running start in the race for orders at this year’s Farnborough show, where the U.S. aerospace giant announced more than $8 billion in business from three customers on Monday. The most lucrative deal came from Shenzhen-based Donhai Airlines, which signed a letter of intent to buy twenty-five 737 Max 8s and five 787-9 Dreamliners in a bid to fulfill a plan to convert its business model from cargo to passenger services.

“Donghai Airlines has undergone steady development over the past 10 years since the beginning of our freighter operation in 2006,” said Donghai chairman Wong Cho-Bau. “Under China’s ‘One Belt, One Road’ initiative, we will accelerate our fleet expansion plan to satisfy the rapidly growing air travel market and help build our home base Shenzhen as the transportation hub in southern China.”

Another major Chinese Boeing operator—China Southern subsidiary Xiamen Airlines—further fortified Boeing’s Asian product base with a memorandum of understanding covering up to thirty 737 Max 200s valued at up to $3.39 billion at current list prices. Now operating an all-Boeing fleet of more than 140 airplanes, including six 787 Dreamliners, 130 Next Generation 737s and four 757s, Xiamen plans to expand its fleet to 200 airplanes by the end of the decade. Already a customer for the 737 Max, Xiamen sees the Max 200 as a good fit for its low-cost subsidiaries, including Jiangxi Airlines and Hebei Airlines. o

Boeing said it will work closely with its Chinese partners to close final agreements, which require the approval of Xiamen’s and China Southern’s boards of directors and the Chinese government.

Finally, on Monday, Boeing revealed the identity of 737-800NG customer Standard Chartered Bank, which has placed a firm order for 10 of the narrowbodies worth $960 million at list prices. Carrying a portfolio consisting of more than 110 aircraft on operating lease, Standard Chartered expects to take delivery of the 10 new Boeings through 2018, helping it meet near-term demand in Northeast Asia in particular.