AIRSHOW-Chinese lessor orders ARJ-21 jets in $2.3 bln deal

Mon Jul 11, 2016 9:07pm EDT
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By Siva Govindasamy

SINGAPORE, July 12 (Reuters) - China Aircraft Leasing Group (CALC) has bought 30 Comac ARJ-21 regional jets and signed options for 30 more in a deal potentially worth $2.3 billion, the company said in a statement late on Monday.

The planes will be used by an unnamed Indonesian airline in which CALC's parent, Hong Kong-based investment firm Friedmann Pacific Asset Management, plans to invest in, it added.

The 78-90 seater jets would be delivered over the next five years, and Chinese state-owned planemaker Comac would set up maintenance and after-sales offices in Indonesia as part of the deal.

The leasing firm, which ordered 20 of Comac's larger C919 narrowbody planes in 2012, said the latest deal reflected its confidence in China-made aircraft, and allowed it more flexibility to provide leasing options for airlines.

CALC has 70 Airbus and Boeing aircraft and says that it has another 103 Airbus planes on order, allowing it to expand its fleet to 173 aircraft by 2022.

The deal is a boost for the ARJ-21, which is more than 10 years behind its original schedule and had its first commercial flight with Chengdu Airlines in end-June.

It competes with similar small passenger jets produced by Brazil's Embraer SA, Canada's Bombardier Inc and the Russian Sukhoi Superjet.

The ARJ-21 has garnered just over 300 orders, mainly from domestic carriers. General Electric Co's aviation arm supplies the engines, and its leasing firm has ordered five planes with options for 20 more.

It has not received certification from other regulators such as the United States' Federal Aviation Administration, which means that only airlines in China and those that recognise the Chinese certification process can operate the aircraft.

China is keen to establish itself as a global supplier of aircraft, and hopes that its in-development C919 narrowbody jet will compete with the established 737s and A320s. It is also working on a widebody aircraft project with Russia. (Reporting by Siva Govindasamy; Editing by Stephen Coates)