Chicago: Air China, the nation's biggest carrier by market value, agreed to buy two Boeing 747-8 aircraft in the planemaker's first sale of the models this year.Air China also will purchase one wide-body 777-300 plane, 20 single-aisle 737-800 jets and eight 777 freighters, according to a statement.
The planes have a combined catalogue value of $4.8 billion and Boeing granted "significant price concessions" through credit agreements, the airline said in the statement.
Boeing, based in Chicago, hasn't sold more than five 747-8 aircraft a year since Deutsche Lufthansa AG purchased 19 of the planes in 2006, and concern that persistently weak demand could prompt the company to curtail production has been mounting.
Friday's orders may help alleviate some of the pressure, according to Stephen Levenson of Stifel Financial.
"There has been concern that the dearth of orders could mean whitetails on the tarmac or insufficient demand to keep build rates at the current two per month," the New York-based analyst wrote in a note to clients on Friday.
Boeing "has been making a major effort to book more 747-8 orders particularly from carriers in the Asia-Pacific territory that may be best-suited to their use."
That helps to balance the production schedule and backlog, said Levenson, who recommends buying the shares.
The 747-8, 777-300 and 737 aircraft ordered on Friday have a catalogue value of about $2.6 billion, while the 777 freighters command about $2.2 billion. The agreement also includes the right to sell seven older 747 freight models back to Boeing and the option to convert four of the new 737 orders to one additional 777-300 jetliner, Beijing-based Air China said in a press statement issued here. Air China rose 3.5 per cent to HK$6.50 at the close in Hong Kong Stock Exchange on Friday.
Separately, Cathay Pacific Airways said on Friday that it cancelled an order for eight Boeing 777-200 freighters and instead has agreed to buy three 747-8 freighters.
It also has options to purchase five 777-200 freighters and will sell four 747-400 converted freighters to Boeing as part of its fleet restructuring, the carrier said in a filing to Hong Kong's stock exchange.