Air China To Buy New Aircraft

Air China will look to buy aircraft as they push towards raising USD 842 million or 6 billion yuan in a private share sale as seen on the Shanghai Stock Exchange.

While 4.2 billion yuan will be dedicated towards the next generation of fleet, Air China will look to invest the remainder into boosting its capital.

New Aircraft To Join Air China

17 planes are looking to be purchased using 4.2 billion yuan by Air China. The carrier is currently targeting a crucial period of renewal and growth of its fleet.

A commitment towards Comac will be delivered over two years with the plan to acquire 6 C919s and 11 ARJ21s, the latter more pitched towards regional operations.

At list price value, the deal is worth some USD 1.1 billion. However, as a close customer of Comac, there would have been a substantial discount handed down to the airline.

Typically, all aircraft orders see discounts applied. The list price value is an excellent overall aircraft valuation, but an airline rarely pays the total price. General discounts can vary depending on the relationship, the order and other contributing factors.

Air China will significantly reduce fuel consumption and related costs once these 17 aircraft are delivered by the end of 2025. With these aircraft, the ambition will be to become even more competitive in the short to medium-haul market.

Comac Looks To Grow In The Market

While Comac secures further orders from Air China, the manufacturer, which has emerged significantly in recent times, still struggles to break out of the Asian and especially Chinese market.

Comac says that it has received now over a thousand orders for the C919 with several new variants planned as it looks to extend the range and also the seating capacity in the future.

The ARJ21 is for Comac what they call an ideal aircraft for regional needs and can go up against offerings from more Western manufacturers.

However, the looming concern will be how Comac branches out its customer base and if it will be able too. This will especially be focused on as Boeing rapidly approaches approval of its 737 MAX in China to see delivery recommencement.

Analysing The Air China Fleet

Per data, Air China’s fleet consists of 432 aircraft, with 52 units being listed as parked. However, generally, the fleet is aging.

Data indicates that commitments to the A319, A330, 737, 747F and almost the 777 all see the average age over ten years.

Generally, the A350, 787, A320, and Comac ARJ21 families are the youngest within the fleet. The ambition will be to move towards more of these next-generation fleet types so they can reap the rewards.