China Southern Airlines to buy 12 Boeing jets worth about $3 billion

October 12, 2016 9:37 AM EDT
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SINGAPORE (Reuters) - China Southern Airlines <600029.SS><1055.HK>(NYSE: ZNH), the country's largest carrier by fleet size, has signed an agreement with Boeing (NYSE: BA) to buy a dozen B787-9 jets worth $3.3 billion in the latest sign of booming Chinese demand for air travel.

Each of the 12 mid-size jets comes at a catalogue price of $271 million, the Guangzhou-based airline said on Wednesday, adding that the aircraft will be delivered in stages from 2018 to 2020.

"The acquisition will strengthen the construction of Guangzhou hub, thus maximizing the operational efficiency and enhancing the competitiveness of the group," China Southern said in a filing to the Hong Kong stock exchange.

China is the world's fastest-growing aviation market, having expanded rapidly as rising incomes resulting from years of healthy economic growth have boosted demand for internal flights as well as travel abroad for business and leisure.

China Southern's deal follows similar fleet expansion moves by rivals such as Air China <601111.SS><0753.HK> and China Eastern Airlines <600115.SS><0670.HK>(NYSE: CEA).

(Reporting by Lee Chyen Yee and Bengaluru newsroom; Editing by David Goodman)

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