Boeing Strikes $10B Deal With China Southern Airlines, Affiliate For 110 Planes

China Southern Airlines Co. and its affiliate, Xiamen Airlines, said Thursday that they will buy 110 planes from Boeing Co., in a deal worth over $10 billion. The deal will add to the fleet of China Southern, Asia’s largest carrier by the number of passengers, as the country is set to become the biggest travel market in the world in 20 years.

China Southern is scheduled to buy 30 737NG and 50 737MAX models, valued at $8.38 billion at current list prices, Boeing said in a statement Thursday. China Southern also said, according to Bloomberg, that the deal was in line with the company’s 13th five-year plan that starts next year.

In a separate listing, cited by Bloomberg, China Southern affiliate Xiamen Airlines also ordered 30 737MAX planes for about $2.88 billion before discounts and will take delivery between 2018 and 2021. The airlines plans convert the last nine 737NG planes, for which another 40-plane deal was signed in August 2012, to 737MAX.

"China Southern's commitment is a solid endorsement of the popularity of the Next-Generation 737 and 737 MAX," Ihssane Mounir, senior vice president, Northeast Asia Sales, Boeing Commercial Airplanes, said in the statement, adding: "We share an enduring partnership with China Southern and we are excited to see that the 737 airplanes will play an important role in their continued success."

In September, Chinese President Xi Jinping signed a $38 billion deal for 300 Boeing planes when he visited its Washington factory during an official trip to the country. Boeing said at the time that the deal was mainly for its 737 models and had added that the company was also set to build a 737 completion center in China, along with the Commercial Aircraft Corp. of China Ltd., also known as Comac, Bloomberg reported. However, it was not clear if the latest deal was part of that agreement.

The Bloomberg report also said that China Southern will sell 13 757s and three 733s back to Boeing, and that the airplane-maker will pay about $1.9 million for them. The airline said that its capacity will increase by 11.7 percent as it also plans to take the delivery of 737NG planes between 2017 and 2018, and 737MAX jets from 2017 to 2021.

In August, Boeing had said that the total fleet in China will increase to 7,210 by 2034 from last year’s fleet of 2,570. The airplane-maker also said that China will require 6,330 new planes worth $950 billion in the next 20 years, to meet travel requirements.