Airbus Announces Chinese (CALC) Deal for 100 New Aircraft

Airbus has announced a preliminary contract to provide the China Aircraft Leasing Company (CALC) with 100 A320 airplanes, in a package worth around $10.2 billion.

The A320neo (new engine option), is the most modern version of the aircraft, which boasts fuel savings of 20 percent per seat compared to the ceo (current engine option) version. © AP Photo/ Frederic Lancelot

“When a leading leasing company, CALC, serving customers in the world’s fastest growing, dynamic aviation market, orders more of our popular A320 Family aircraft, we take that as a strong signal of the continuing long-term success of our best-selling product line,”  said Airbus Customers COO John Leahy  in a media release the French manufacturer released today.

The offer is for three different types of Airbus planes, and brings the full total quantity of Airbus planes delivered or slated for delivery to CALC to 140. The newest batch of 100 includes 74 A320neo, 16 A320ceo and 10 A321ceo planes.

The A320neo (new engine option), is probably the most modern version of the aircraft, which boasts fuel savings of 20 percent per seat set alongside the ceo (current engine option) version. The plane is among the fastest-ever selling lines of aircraft, with Airbus having already received 3,257 orders from 60 customers at the time of August 2014.

The brand new plane completed its first test flight on September 25 in 2010, and is anticipated to enter into service for initially with Qatar Airways in the last quarter of 2015, following a 3,000 hour flight test program.

The short to medium-range narrow-body A320ceo planes, which has seat from 150 to 180 passengers, are a choice of passenger air travel; it first flew in 1987. The bigger A321ceo can seat 185 to 220 passengers, and made its first flight in 1993.

The order from China reflects increasing demand from Asia, the fastest-growing airplane market. In 2009 Airbus established an assembly facility in Tianjin, China, its first outside Europe. The business even offers European assembly plants in Hamburg and Toulouse, and has plans to open a brand new production facility in Alabama in 2015.
Economic growth in Asia is spurring greater demand for air travel, with figures from the International Air Transport Association showing it’d the largest year on year escalation in passenger traffic in comparison to other regions. The top of aircraft trading at CALC, Jens Dunker, told Bloomberg that global demand can also be surging.

“Airlines are now prepared to wait six to eight years for an aircraft. Some 80 percent of current-generation planes need to be replaced by new aircraft in the coming years.”

The announcement follows CALC’s July listing on the Hong Kong stock exchange, which makes it the very first plane leasing company to do so. The Wall Street Journal reported that the organization was seeking to boost funds with the goal of doubling its fleet to 64 by the end of 2016. Their Chief Executive Mike Poon told the paper that along with the requirement to replace older aircraft in Europe, a proliferation of budget carriers in Asia was driving the market.