China Airlines announces $12 billion fleet renewal deal with Boeing, Airbus

Investing.com -- Taiwan's China Airlines has announced a nearly $12 billion deal to renew its long-haul fleet, splitting the order between American aircraft manufacturer Boeing (NYSE:BA ) and its European competitor Airbus. The airline is also set to purchase freighter aircraft from Boeing as part of the deal.

The largest carrier in Taiwan had been evaluating the Boeing 777X and Airbus A350-1000 as potential replacements for its current fleet of 10 Boeing 777-300ERs, with the goal to facilitate future growth.

On Thursday, China Airlines confirmed it would purchase 10 Boeing 777-9 aircraft, 10 Airbus A350-1000s, and four 777-8 freighter aircraft. The new aircraft are scheduled for delivery starting from 2029.

In a statement, China Airlines highlighted its active planning for fleet size and its steady expansion in global passenger and cargo markets. The airline also specified that the A350s will be powered by Rolls-Royce (OTC:RYCEY ) engines, while the 777-9s will be equipped with GE engines.

The decision of such large-scale aircraft purchases often involves political considerations in addition to business factors. This is especially true for Taiwan, due to its international situation and the pressure it faces regarding China's sovereignty claims, which are rejected by Taiwan's democratically elected government.

The United States, despite not having formal diplomatic ties, remains Taiwan's most important international supporter and arms supplier.

The Taiwan government is the majority owner of China Airlines. In October, the airline's Chairman, Hsieh Shih-chien, asserted that the carrier was not under any political pressure regarding its decision about the long-haul fleet.

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Source: Investing.com