Exclusive - Boeing gets $20.7 billion worth of 737 Max commitments from China: sources

Fri Oct 25, 2013 9:11am EDT
 
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By Siva Govindasamy

SINGAPORE (Reuters) - Boeing Co (BA.N: Quote) has secured commitments for around 200 of its 737 Max aircraft, the upgraded variant of its best-selling short-haul planes, from multiple Chinese customers, said two sources familiar with the deals.

The deals are worth a combined $20.7 billion at list prices and must be approved by the Chinese government, a usual practice for aircraft orders in the country, before the customers can be identified, the sources said.

These are the first commitments for the 737 Max from China, the world's fastest-growing airline market. Officials from both Boeing and Airbus EAD.PA, which makes the A320 that competes with the 737, have said China is likely to overtake the United States as the world's largest market over the next 20 years.

The commitments come from a range of customers including state-owned airlines via the national procurement agency, China Aviation Supplies Holding Company, as well as leasing firms associated with the country's banks, the sources said.

China Aviation Supplies could not be immediately reached for comment.

Airlines such as Air China (601111.SS: Quote), China Eastern Airlines (600115.SS: Quote) and China Southern Airlines (600029.SS: Quote) are all operators of the current models of the 737 in the country.

Committing to the aircraft while waiting for the government to approve their fleet growth plans allow the airlines to secure some of the earlier delivery slots for the 737 Max, for which there have been 1,567 orders.

A Boeing spokesman declined to comment on the deal, and would only say, "discussions with customers are confidential."   Continued...

 
A visitor looks at a display of miniature Boeing passenger aircraft at Aviation Expo China 2013 in Beijing September 25, 2013. REUTERS/Kim Kyung-Hoon