China’s Shandong Airlines to purchase 50 Boeing 737 worth $4.6bn

China’s Shandong Airlines has placed an order for 50 Boeing 737 aircraft worth $4.6bn (£2.7bn) at list prices. Boeing has not officially confirmed the order, but China is looking to increase its fleet to meet the domestic demand. The Chinese government too has not officially approved the order.

Boeing however said in an official statement that, “Boeing is delighted with Shandong Airlines’ strong interest in the efficient 737 airplane and we continue to work with them and the Chinese government to determine the best way to meet their requirement,” the plane maker said in a statement.

The 100-200 seat narrow-body, or single-aisle, aircraft market is forecast to generate $20 trillion (£12.8tn) worth of sales for plane makers over the next 20 years. Also a growing number of fuel efficient plane makers are reaching out to the growing number of airlines, and the completion is increasing. Airbus’s A320 and Boeing’s 737 aircraft are ruing this sector.

With this win Boeing will not only be competing with Airbus but also with China’s domestic state-owned Commercial Aircraft Corporation of China (Comac). Comac is also targeting the 100-200 seat plane market with its C919 aircraft.

The firm has already got 400 orders for the C919 – mostly from China – and many analysts expect it to win more orders, especially from domestic carriers.

Chinese airline, Air China reported that the first quarter will be 65% lower compared to the last year due to the falling value of yuan. Since the aircraft purchase is mostly done in US. dollars, the state owned aircraft recorded a net profit of 249m yuan (£23.7m) in the first quarter of 2013. Rival China Southern Airlines warned on profits for the same reason last week.

According to a statement of Air China the yuan fell by 2.7% against the US dollar in the first quarter of the year. The financial expenses have grown higher compared to this time in 2013 due to the loss in exchange price.