China Southern to buy 10 A330-300 aircraft

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 aircraft, which are worth a total of $1.88 billion at list price, apart from saying it received "certain price concessions" from Airbus.

Airlines usually get discounts from plane-makers 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.

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.

SOURCE

Competition heating up in China. Orders are coming in flick and fast.