Air China subsidiary to lease 10 Boeing jets in deals worth about US$400 million

Shandong Airlines, a subsidiary of flagship carrier Air China, has announced plans to lease 10 Boeing 737 aircraft, signalling China’s continued demand for the American jets as it looks to refresh an ageing fleet.

The airline will pay a total fee of 2.88 billion yuan (US$405 million), with the aircraft to be delivered in batches over the coming two years, according to a notice Air China issued to the Shanghai Stock Exchange on Thursday.

The deals include 10-year leases for three Boeing 737-800 jets, 11-year leases for three more aircraft of the same model, and 12-year leases for four Boeing 737 Max planes.

The announcement comes weeks ahead of US President Donald Trump’s planned trip to China, where he is expected to discuss trade issues with Chinese President Xi Jinping. The trip was originally scheduled to take place next week, but Washington now says it has been postponed until mid-May due to the US-Israel war on Iran.

China has placed large orders for Boeing aircraft as part of trade deals with the United States in the past, with Beijing agreeing to buy 300 jets from the US aviation giant during Trump’s last state visit to China in 2017. The purchases were often seen as a useful tool to help reduce America’s large bilateral trade deficit with China.

But procurement has become more uncertain in recent years due to several factors, including rising US-China trade tensions and safety issues affecting Boeing aircraft.

South China Morning Post