Chinese Carriers in Deal to Buy 42 Boeing Jets

SHANGHAI, China – Four Chinese airline companies have agreed to buy 42 Boeing 787 (search) jets for a total $5.04 billion, the official Xinhua News Agency reported Monday.

China's flag carrier Air China Ltd. (search) and China Eastern Airlines Corp. (search) will each buy 15 planes, Shanghai Airlines Co. (search) will buy nine planes, and Xiamen Airline Co. (search) will buy three planes, the report said.

The purchase comes ahead of an expected visit by Chinese President Hu Jintao (search) to the United States in September and is a coup for Chicago-based Boeing over European archrival Airbus SAS.

In January, six Chinese airlines signed an agreement with Boeing (BA) to order 60 of its new fuel-efficient 787 Dreamliners for $7.2 billion. It was not clear why the latest purchase contract did not include Hainan Airlines Co. and China Southern Airlines Co., who were part of the earlier agreement.

Xiamen Air is 60 percent owned by China Southern Airlines (search), which along with Xiamen Air also signed a contract in April to buy 45 Boeing 737s.

Chicago-based Boeing has said the 787s will be priced at between $125 million to $135 million each, though airlines usually negotiate discounts for large orders. The 787 Dreamliner, which is to go into service in 2008, competes with the A350 being developed by Airbus.

To date, Boeing has received 143 firm orders and 109 additional commitments for the long-range 787, including the 60 orders the Chinese airlines placed in January.

Both Boeing and Airbus have boosted sales efforts in China, where airlines have made a series of major aircraft purchases in recent years as they build up fleets to meet soaring demand.

Boeing says it expects China's airlines to spend $183 billion on aircraft over the next two decades as its 1.3 billion increasingly prosperous citizens take to air travel.

On Monday, pending the announcement of the planned purchase, shares in Air China, Shanghai-based China Eastern, and China Southern were suspended from trading in Hong Kong.