Skift Take

Although foreign carriers are tapping into China’s thriving outbound market, Air China is perfectly positioned to capture the largest share of its customer base whose cultural nuances it can cater to and understand.

Air China Ltd., Asia’s biggest carrier by market value, plans to add 100 additional Airbus SAS planes as it expands its fleet to meet rising travel demand in the world’s most populous nation.

The airline’s board approved the expansion for Air China and its units, the company said in a statement to the Shanghai Stock Exchange today. It didn’t give a time frame or the type of aircraft it intends to introduce.

Airbus won approval from China last month for orders of 60 planes valued at $8 billion, including 18 A330 wide-bodies that had been put on hold amid Chinese opposition to a European Union proposal for tax carbon emissions. Carriers in China will need 5,260 new planes worth $670 billion through 2031, Boeing Co. forecast in September.

Shares of Air China fell 0.7 percent to HK$6.7 at the close of Hong Kong trading before the announcement. The stock has risen 2.3 percent this year, compared with the benchmark Hang Seng Index’s 1.7 percent gain.

Orders from China are different from those announced by carriers elsewhere, in that a firm order isn’t sufficient to get the plane into the order book because additional confirmation by the government is required.

Air China today said its board also approved the early disposal of 6 A340 planes, a four-engine wide-body jet that Airbus has stopped manufacturing following slack demand. The carrier, which had a fleet of 301 aircraft at the end of December, is due to receive 113 planes in three years through 2015, according to the company.

With assistance from Stephen Tan in Beijing. Editors: Vipin V. Nair and Benedikt Kammel.

To contact the reporter on this story: Jasmine Wang in Hong Kong at [email protected]. To contact the editor responsible for this story: Vipin V. Nair at [email protected].


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Tags: air china, airbus, china

Photo credit: Air China planes lined up at the gates of Beijing Capital International Airport. Julien Gong Min / Flickr

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