Chinese budget carrier Spring Airlines (春秋航空) said it plans to buy 21 Airbus A320 planes for 12.45 billion yuan (US$2.01 billion), citing growth in both international and domestic air travel.
The Shanghai-listed company intends to fund the purchase in part through a private placement of shares to raise 4.5 billion yuan, according to a statement to the exchange on Monday.
The single-aisle A320 has a list price of US$97 million, according to Airbus SAS.
“Demand in China’s domestic and international aviation market is steadily increasing,” Spring Airlines said in the statement. “The company intends to reasonably expand the scale of its fleet to increase its air transport capacity.”
Spring Airlines, headquartered in Shanghai, was founded in 2005 and now flies more than 90 domestic and international routes, according to its Web site.
Spring’s shares, which had been suspended since June 26 owing to a rout on China’s stock market, closed up 3.21 percent yesterday, reversing a 10 percent plunge in early trading. The company’s net profit for the first quarter this year jumped 46.43 percent year-on-year to 254.32 million yuan.
China, the world’s second-largest economy, is already Asia’s biggest aircraft buyer as a growing middle class takes to the skies in ever-increasing numbers.
Last year, US aircraft giant Boeing Co forecast Chinese carriers would need nearly 6,000 new planes valued at US$780 billion over the next 20 years, accounting for about 16 percent of world demand and nearly half of Asia’s.
However, China hopes part of its vast aircraft market would go to a homegrown passenger plane — the 168-seat C919 — in a challenge to the global dominance of Boeing and Airbus.
Chinese economic growth is slowing and expected to soften further in coming years — a trend industry officials say could put a dent in air travel.
China’s GDP expanded 7.4 percent last year, the slowest since 1990. The nation’s GDP grew 7 percent year-on-year in the second quarter, matching the 7 percent expansion in the first three months of this year.
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