(Bloomberg) -- China Aircraft Leasing Group Holdings Ltd. agreed to buy 50 Airbus SE single-aisle airliners with a combined list price of $5.42 billion to help meet surging air travel demand in an aviation market set to surpass the U.S. as the world’s biggest.
The transaction for the A320neo aircraft was done through an amendment to a 2014 purchase agreement, and the European plane maker granted “significant price concessions,” the Hong Kong-based leasing company said in a filing Friday. Deliveries are expected in stages in 2023, said the lessor, which counts Air China Ltd. and ANA Holdings Inc. among its customers.
China Aircraft Leasing is expanding its fleet along with competitors amid a flying boom that would make China the largest air-travel market possibly as soon as around 2022, according to estimates by the International Air Transport Association. Boeing Co. expects China needs 7,240 new planes valued at almost $1.1 trillion in the two decades through 2036, with narrowbody aircraft making up for three quarters.
With the latest agreement, China Aircraft Leasing’s total order book will rise to 252 aircraft -- 202 from Airbus and 50 from Boeing, according to the company. The company has 107 planes in its fleet.
Chinese companies have placed tens of billions of dollars in aircraft orders in the past year. During a visit by Chinese President Xi Jinping to Berlin in July, Airbus said it won a $22 billion order to supply 140 planes to China, including 40 widebody A350s and 100 of its narrowbody A320-series jets.
After a meeting between Xi and U.S. President Donald Trump in Beijing in November, China Aviation Supplies Holding Co. agreed to buy 300 aircraft, including 260 narrowbodies, worth about $37 billion from Boeing. The companies didn’t provide details of the airlines that would take deliveries or say how much of the amount was new orders.
Air China Ltd., China Eastern Airlines Corp., China Southern Airlines Co. -- the three biggest state carriers -- together plan to add more than 600 aircraft through 2020. Air China and China Eastern intend to introduce 167 and 191 aircraft respectively through 2019, while China Southern has plans for almost 300 more planes by 2020, according to the companies’ financial statements.
©2017 Bloomberg L.P.