Airbus signs deal with East Star
By Lu Haoting (China Daily)
Updated: 2005-11-28 05:36
WUHAN: East Star Airlines, China's fourth registered private airline,
yesterday signed a letter of intent with Airbus to buy 10 A320s and a lease deal
with GE Commercial Aviation Service (GECAS) for another 10 A320s.
The deals are the largest single orders Airbus and GECAS have signed with a
Chinese private airline.
The new airline company is owned by China East Star Group, one of the largest
private enterprises in Hubei Province.
East Star Airlines, based in Wuhan, Hubei Province, received approval for the
operation of its service from the General Administration of Civil Aviation in
June this year and plans to start its flight service in May next year.
The leased A320s will be delivered from the second quarter of next year.
"The A320 family aircraft is undoubtedly the best choice for our new airline
company. Its unmatched low operating costs combined with the high level of
passenger comfort will help the company take off smoothly and successfully,"
said Lan Shili, president of China East Star Group, which is parent of the
Lan declined to comment on the value of the deals. A320s are priced at 60
million yuan (US$7.4 million) each in the catalogue. He said that the 20 A320s
will be delivered over the next five years.
"The private airline business is a new sector in China and we have been
paying close attention to this," said Laurence Barron, president of Airbus
Another two Chinese private carriers, Shanghai-based Spring Airlines and
Chengdu-based United Eagle, currently have one A320 family aircraft in service
each. Spring Airlines leased its second A320 earlier this month. Okay Airways,
based in Tianjin and China's first registered private airline, has leased two
B737s from Korean Air.
"It is very hard for an airline to make a profit if its fleet is too small."
Lan said. "With the fast growth of Wuhan's economy, the city's aviation service
demand is expected to soar."
Lan said his confidence in the new company also comes from the fact that
flights from and to Wuhan, operated by China Eastern and China Southern, are now
flying at almost full capacity.
(China Daily 11/28/2005 page2)