CHINESE airlines to buy 36 Boeing jets

Thursday, August 9th 2001, 12:00 am
By: News On 6

SHANGHAI, China (AP) _ China has decided to buy 36 Boeing 737 jetliners, though details are still under negotiation, an airline official said Thursday.

Government officials who are negotiating on behalf of five state-owned airlines haven't revealed whether they have agreed to a price, said Daniel D. Y. Song, spokesman for China Eastern Airlines in Shanghai.

The deal would be a welcome boost for Seattle-based Boeing, which has been losing orders due to a slowing U.S. economy. The Wall Street Journal reported this week that it could be worth up to $2 billion.

It also would show renewed vitality in China's airline industry. Carriers have suffered huge losses in recent years due to overcapacity, prompting Beijing last year to order most of them to consolidate into three major companies.

Regulators are said to have ordered carriers to put off buying new aircraft until those consolidation plans were clear.

Boeing's regional headquarters in Hong Kong referred questions to a spokesman who it said was unavailable this week. A spokesman in Seattle, Bob Saling, said Wednesday that discussions with China were still under way on when and how many aircraft it would buy.

The five Chinese airlines still must negotiate with Boeing and each other on delivery dates and other details, Song said.

``We haven't set the schedule yet,'' Song said.

The deal comes amid a thaw in tense Chinese-U.S. ties that suffered after the April 1 midair collision of a U.S. Navy spy plane and Chinese fighter jet.

Since then, China has released three U.S.-linked academics accused of spying and received an upbeat visit by U.S. Secretary of State Colin Powell.

The 162-passenger 737 aircraft is the smallest of Boeing's full-size jetliners. Its list price is $43.5 million to $51.5 million each.

Officials said China Eastern is to buy four 737s, and Shanghai Airlines plans to buy three. The remaining jets are to go to Air China, Southern Airlines and Hainan Airlines, the Journal said. Those carriers declined to comment.

Both Boeing and its European rival, Airbus, have been hit hard as American carriers cut back buying plans in the face of slowing economic growth.

Boeing's customers have pulled out of buying 50 of the 192 new planes ordered this year. The company expects to deliver only 510 to 520 jetliners next year, down from the 530 originally forecast.