Boeing said yesterday it had won a commitment from China’s Okay Airways to buy 12 aircraft for $1.3bn, a deal the carrier said showed the nation’s travel sector is robust despite an economic slump.
“The Chinese people are very good at saving... It doesn’t matter if the economy has worsened, they will still travel,” Okay Airways chairman Wang Shusheng told reporters.
“Right now, we are focusing on the region and Singapore is one of the destinations in our consideration,” he added.
Okay Airways, founded in 2004 and China’s first privately owned airline, currently flies to Japan, Thailand and South Korea’s Jeju island as well as domestic routes.
In 2014 it agreed to buy 10 single-aisle Boeing planes worth $980mn. The latest deal is subject to Chinese government approval, the US manufacturer said at the Singapore Airshow where it was announced.
Okay committed to buy eight 737 MAX 8s, three 737 MAX 9s and one next generation 737-900 extended range version, which are all narrow-bodied aircraft.
The Chinese carrier also has the option to order another eight 737 MAX 8s, Boeing said. Wang said the carrier also plans to expand its fleet to include wide-bodied aircraft to fly to more international tourist destinations such as Hawaii and Fiji.
A decision would be made later this year on the wide-body planes, he said.
The airline aims to have 80 aircraft by 2020, with 30% of the fleet expected to be wider aircraft. The Okay Airways purchase is the biggest announced so far at the biennial Singapore airshow, which has seen slim pickings this year amid global economic jitters.
The order is also a boost to the 737 MAX 9, which has been outsold by the A321 neo, its rival narrow-body aircraft made by Europe’s Airbus. Boeing said the purchase commitment marks the first order for the 737 MAX 9 by a Chinese airline. Industry players agreed travel demand in China remains strong despite a recent rout in the country’s stock market and a slowing economy.
“The stock market in China is not China,” Airbus senior executive John Leahy said in Singapore on Tuesday. The other major deal at the show is an order by a US leasing firm from Japan’s Mitsubishi Aircraft Corp for 20 of its new regional passenger plane in a transaction potentially worth over $900mn.
ATR, the European manufacturer of turboprop aircraft, on Tuesday signed a $130mn deal with a Singapore-based firm for five new ATR 72-600 planes.