Boeing Co (NYSE:BA) Receives A $1.3 Billion Order From China’s Okay Airways
Chinese airline company Okay Airways has issued an airplane order worth $1.3 billion to Boeing Co (NYSE:BA).
Okay Airways is a privately operated Chinese airline company. Its order to Boeing is for 12 planes including one 737-900ER extended range aircraft, three 737 MAX 9 jets and eight 737 Max-8 planes. This is the first time that a Chinese airline firm has ordered the 737 MAX 9. The two firms struck the deal during a meeting held at the Singapore Airshow.
Boeing’s vice president of marketing Randy Tinseth reported that the deal puts the company at a very good position and marks a good beginning of the year for the plane maker particularly for its 737 program. He added that the company has not faced any cancelations for the long term or the short term. He attributed the good trend to the growing customer base to the increasing traffic which means airlines are able to buy new planes.
Mr. Tinseth also pointed out that the company has been facing a lot of competition from Airbus and a few other players in the airplane making industry. Nonetheless, Boeing is comfortable with the pricing in the market because it is in line with the company’s expectations. He further pointed out that the heavy competition was one of the main reasons for the company’s decision a month ago, to slash jobs.
Boeing also revealed that the deal with Okay Airways also includes an option for eight more 737 max planes. The $1.3 billion deal is however not part of its deal with China in 2015 to supply the country with 300 planes valued at $38 million. Okay Airlines currently has 18 airlines and plans to expand its fleet to 80 aircrafts by 2020.
According to Boeing’s chairman Wang Shusheng, Okay Airways plans to buy wide-body aircrafts that will make up 30% of the firm’s overall capacity over the next five years. The will also fall in line with the company’s plan to travel longer routes.