China Southern Airlines is set to add two B777 freighters to its fleet after converting two B777-300ER aircraft from its original 2017 purchase agreement. The two freighters are set for delivery in 2020.
The carrier says in its Stock Exchange filing that: “The Directors (including the independent non-executive Directors) consider that the Revised Acquisition is in line with the Company’s fleet planning, which helps to flexibly respond to changes in the passenger and freight markets and to better address the Company’s market demand, and in turn enhances the Company’s market competitiveness.”
Under the revised purchase agreement, China Southern will now purchase six B777-300ER, two B777F and 30 B737-8 aircraft, as opposed to eight B777-300ER and 30 B737-8 aircraft as originally agreed upon with Boeing. The carrier made the announcement in a Hong Kong Stock Exchange filing after the close of business on 28 February.
China Southern notes that the list price (airframe and engine) of each of the B777F aircraft is about USD 314 million and the catalogue price of each of the B777-300ER aircraft is priced about USD 317.7 million.
“The aggregate actual consideration for the Revised Boeing Aircraft, which is payable in cash and determined after an arm’s length negotiation between the parties, is significantly lower than the catalogue price as provided by Boeing because of the substantial price concessions granted by Boeing,” the carrier adds.
The Guangzhou Baiyun International Airport- (CAN) based carrier currently operates a fleet of two B747-400F and 12 B777F aircraft alongside the belly capacity of some 595 aircraft (with orders for 264 more).