Boeing won its biggest order from a Chinese carrier as China Eastern Airlines agreed to buy 80 737 jets.
The order is valued at $7.4 billion at list prices, but airlines get large discounts on big orders so the real price is likely around $4 billion, according to data from aircraft valuation firm Avitas.
China Eastern, the nation’s third-largest airline, will buy a mix of 737-800 and upgraded Max models, to be delivered starting in 2016, the company said in a statement to the Shanghai stock exchange Friday. The carrier is also selling 15 older 737-300s and five 757s back to the plane maker, according to the statement.
The order is a leg up for the world’s largest aircraft maker in its competition with Toulouse, France-based Airbus Group in the market for single-aisle jets, the workhorse of the global airline fleet. More than 50 percent of the commercial jetliners operating in China are Boeing planes, according to the company’s website.
Chinese carriers are bringing in more orders for Chicago-based Boeing and Airbus as growth in the world’s second-largest economy enables more people to fly. That expansion has China on pace to become the world’s biggest aircraft market, making purchasing planes inevitable.
At least 13 Chinese airlines, double the existing number, will have a fleet of 100 aircraft each by the end of the decade, market researcher CAPA Centre for Aviation said last month.
China Eastern, based in Shanghai, will fund the purchase with business operations, bank loans and other finances, according to the statement.
In January, Boeing said it delivered a record 143 jets to China last year and expects to hand over a similar number of aircraft in 2014. In February, China said it will further lower the criteria for setting up a budget airline in the country and will study tax breaks for low-cost carriers.