In its latest bid to boost its business in the international aviation market, aircraft major The Boeing Company BA has inked a deal to sell a dozen of its 787-9 Dreamliner jets to China Southern Airlines Co. Ltd ZNH. As per Reuters, each of these mid-sized commercial jets, priced at $271 million, will be delivered in stages from 2018 to 2020.
Last week, Boeing declared mixed third-quarter 2016 delivery report of airplanes, including a drop in commercial numbers. The announcement surely comes as a sigh of relief for this largest domestic aircraft manufacturer’s investors.
Benefits of the Deal
For a total value of $3.2 billion, Boeing has finalized the order agreement of delivering 12 of its 787-9 Dreamliners to China Southern Airlines, which is also the launch customer of its 787 family of jets in China. China Southern already operates 10 787-8 Dreamliners, along with a handful of Boeing’s 777, 747, 757 and 737s, among its fleet of 700 aircraft.
Apart from boosting Boeing’s oversees business, this new deal also aims at strengthening capacity and services of China Southern’s expanding long-haul fleet. Management at the airlines also showed their enthusiasm with respect to this deal based on the fact that the 787 jets, already in commercial use, have contributed significantly to the overseas success of the airlines.
The airline expects to have a fleet of 1,000 aircraft, with passenger traffic surpassing 160 million annually by 2020, toward which this deal is a significant footstep.
Qualities of the 787-9 Fleet
Boeing’s 787-9 Dreamliner jet represents one of the latest models of the company’s family of superefficient 787 jets, offering more seats and cargo capability than its previous versions. With the fuselage stretched by 6 meters (20 feet) over the 787-8 model, the 787-9 comes with 20% less fuel use and 20% fewer emissions than other aircraft of similar size.
Leveraging the visionary design of the 787-8, the 787-9 jet promises to offer passenger-pleasing features such as large windows, large stow bins, modern LED lighting, higher humidity, a lower cabin altitude, cleaner air and a smoother ride.
In this context we would like to remind investors that, despite facing several issues from the very beginning of its inception, the 787 family of jets has remained one of the crucial centerpieces of Boeing’s commercial aircraft business line. Per the company’s second quarter 2016 results, Boeing has made notable progress on the 787 program, including successfully transitioning to the 12 per month rate, increasing deliveries of the 787-9, reducing production flow times and lowering unit cost while introducing the 787-10 into the production system.
China Southern Airlines, the largest carrier in the nation by fleet size, has been a long-standing customer of Boeing. Boeing’s 787 fleet has empowered the airlines to launch six new non-stop global routes. We expect the deal for 787-9s to open up more number of global routes for China Southern, thereby encouraging it to buy more of Boeing’s aircraft and bringing in more revenue for the aircraft major.
Moreover the fact that China’s aviation industry has been witnessing a rapid evolution in recent times and is currently home to Asia’s largest business-jet fleet, this deal comes as a boon for Boeing, which might motivate other airlines in Asia to purchase its aircraft.
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