China Southern Airlines and Boeing announced (28-Feb-2012) an agreement for 10 777-300ERs, as the airline plans to expand its capacity to meet growing demand in the Asia Pacific and China. The aircraft are scheduled for delivery between 2013 and 2016 and are worth around USD3 billion at list prices, although the carrier will pay a "significantly lower" figure than the list price. The carrier said it will pay for the purchase through internal resources and commercial bank loans. The fleet additions will increase capacity (ATKs) of the group by 7.9% from 31-Dec-2011 levels (without taking into account the adjustment to be made by the company according to market conditions and age of the aircraft fleet). The agreement still requires Chinese Government approval. Once approval is attained, the order will be posted to Boeing's Orders & Deliveries Website. [more - original PR - Boeing] [more - original PR - China Southern Airlines]
China Southern announces agreement with Boeing for 10 777-300ERs
You may also be interested in the following articles...
China Southern Airlines deflects yield pressure concerns. Long haul focus shifts to North America
China Southern Airlines may be Asia's largest airline, but it has one of the smallest long haul networks. China Southern has shifted growth to international markets, which represented only 17% of capacity in 2009 but doubled to 34% in 2016. Its long haul plank has been Australia and New Zealand, funnelling traffic from around China down to its southern hub at Guangzhou. China Southern has met its objectives for Australia/NZ and now turns its focus to the market that has preoccupied most other Northeast Asian airlines: North America.
China Southern plans to increase flights from five daily to 11 daily, about the size that ANA is today – and larger than Air China and China Eastern. Although China Southern can build on the principle of using Guangzhou as a North-South hub, North America is a radically different proposition. Guangzhou's southern positioning limits exposure to the Chinese market that China Southern knows best. China Southern will need to target connections to Southeast Asia and India, which have only been a small component of Air China and China Eastern's network.
Northeast Asia's outlook remains bright – and perhaps more so than before
A few years ago amidst the economic downturn it was Northeast Asia – with its main Chinese market – that was a strategic bright spot for aviation.