Air China has opted for the Next Generation Boeing 737 to meet its long-standing requirement for a new narrow-body jet airliner, as part of a $1.5 million China Aviation Supplies (CASC) order for 30 new Boeing aircraft expected to be announced at the end of October.

CASC will dispatch a team to Seattle to finalise the purchase, ahead of Chinese President Jiang Zemin's visit to the USA on 28 October (Flight International, 10-16 September). The deal will consist of five Boeing 777-200s, five 757-200s and a mix of 20 737s, plus options on a further 20.

The most significant purchase is understood to include five 737-700/800s for Air China. Airbus Industrie had been hoping to capitalise on the flag carrier's recent purchase of three A340-300s and secure a follow-on deal for A321s. The airline requires another 15 737-700/800s, which may make up the bulk of CASC's options.

Air China, in addition, will receive another five 777s, which it has held on option since ordering an initial five -200s earlier in the year. The 757 order is divided between three for Xinjiang Airlines and an additional two for China Southwest Airlines.

Local industry sources say that the remaining 15 firm 737 orders will be distributed among the smaller provincial carriers, with China Xinhua Airlines, Xiamen Airlines and Yunnan Airlines each being tipped to get two 700/800s. A further two to three 737-300/400s will each go China General Aviation, Hainan Airlines and Shandong Airlines.

The first deliveries are expected to begin 18 months from October. Despite Boeing attempts to distance the order from state visits, China wants to announce the order during Jiang's trip to the USA, to gain the maximum political leverage. The options are unlikely to be firmed up until US President Bill Clinton pays a return visit to China in early 1998.

In a separate deal, Boeing has announced that Shanghai Airlines will lease a new 737-700 from international Lease Finance from early 1998 and is set to become the first Chinese carrier to operate the type. As an interim measure, the airline has leased a used 737-300.

Airbus, in the meantime, has officially confirmed that China Southwest is to receive three previously ordered CASC A340-300s with which it plans to launch its first international service from Chengdu to Tokyo, in Japan, and to use them on services to Lhasa in Tibet.

The carrier is also being targeted to take eight remaining unallocated Airbus A321s from CASC's May order for 30 A320/A321s.

Source: Flight International