Government approval needed for purchase by four dominant airline groupings of at least 10 aircraft each


Leading Chinese airlines are seeking government approval to become launch customers for Boeing's 7E7 with a bulk order that could be for more than 50 aircraft.


Industry sources say Boeing hosted a 7E7 conference in Beijing on 25 May that was well attended by the country's airlines and by representatives of the regulatory Civil Aviation Administration of China (CAAC). It confirmed serious interest in the new twinjet, which was recently launched with a 50-strong order from Japan's All Nippon Airways.


The sources reveal that memoranda of understanding have been signed with Boeing covering a proposed bulk deal involving the country's four dominant airline groups - Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines - and possibly smaller Shanghai Airlines and Xiamen Airlines.


Government approval is now being sought to proceed with a firm order that would be placed on the airlines' behalf by state-run China Aviation Supplies Import & Export Group.


"We are working with the government for an order," confirms an executive with one of the four main airlines, who asks that the carrier is not identified.


Each interested airline wants to order at least 10 aircraft, say the sources, most in the form of the baseline long-range 7E7-8 version, that will seat around 230 people. Although a final number could change, the sources expect a deal to be for around 50 aircraft if it involves the four top airlines and more if it also includes Shanghai and Xiamen.


The sources stress that the paperwork signed with Boeing is non-binding and airline requests need to be approved by the CAAC and many other government departments before a bulk order is placed.


However Boeing is known to be confident that a sizeable Chinese order will come this year - possibly as early as the summer. It revealed in May that formal 7E7 proposals had been submitted to six of the country's carriers, namely the four dominant groups as well as independent Shanghai Airlines and Xiamen Airlines, which is 60%-owned by China Southern.


Air China, China Eastern and China Southern already operate long-haul international services. Hainan has a limited international network covering a handful of points within Asia, but it hopes to be serving long-haul destinations by the time Boeing starts delivering 7E7s in 2008. Shanghai and Xiamen have also been seeking to expand their international operations.



Source: Flight International