China-Made Jetliner C919 Secures New Order from Urumqi Air
On April 27th, Hainan Airlines announced that its subsidiary Urumqi Air intends to buy 30 C919 aircraft from The Commercial Aircraft Corporation of China (COMAC). This purchase follows COMAC’s confirmation of an order for 300 C919 aircraft during last year’s Zhuhai Airshow.
Urumqi Air, Suparna Airlines, Hainan Airlines and COMAC signed a core terms list according to an announcement. Following this, Urumqi Air and COMAC will negotiate separately to sign a purchase agreement for C919 aircraft and agree on specific delivery arrangements. COMAC will meet Urumqi Air’s demand for aircraft delivery as much as possible based on actual production capacity. As one of the first batch users of C919 aircraft, Urumqi Air can enjoy preferential policies. Additionally, COMAC will provide support in financing matching, aircraft value assessment, aviation materials and tool equipment guaranteeing, maintenance operations technology performance, etc.
Based on COMAC’s 2018 data, the C919 large passenger aircraft had received orders from 28 customers, totaling 815 confirmed and intended orders. During the Zhuhai Airshow in November 2022, seven leasing companies placed confirmed orders for a total of 300 planes. According to an aviation industry media outlet’s report, many of these new orders were previously intention orders that have now been converted into confirmed ones with deposits.
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Hainan Airlines’ announcement stated that the list of core terms signed is a framework agreement, indicating preliminary intentions to purchase aircraft. However, the specific details of implementation will be determined upon signing a separate aircraft purchase agreement.
COMAC’s customer list includes China Eastern Airlines, Air China, China Southern Airlines, and Sichuan Airlines. However, only China Eastern Airlines has signed the first batch purchase contract with COMAC to introduce five aircraft and disclosed the introduction schedule in their annual report. The delivery schedule for Air China and China Southern Airlines is further away as they have not yet signed a purchase agreement with COMAC for C919.
In May of last year, China Eastern Airlines revealed the unit price of the C919 aircraft for the first time. The quoted price for a single C919 was $99 million. Urumqi Air plans to introduce 30 C919s, which would amount to a total cost of approximately $2.97 billion based on this calculation. However, it is important to note that manufacturers may offer discounts during actual transactions.
Urumqi Air is the sole local airline in Xinjiang, operating 16 B737-800 aircraft as of March 2023. Its total assets amounted to 1.925 billion yuan ($278 million) by the end of 2022, while its net assets were -1.888 billion yuan.
