China Southern receives third capital injection for fleet expansion; will lease 18 aircraft from ALC
Published: June 6, 2012
China Southern Airlines 737-800. By Rob Finlayson
The Chinese government will inject about CNY2 billion ($ 315 million) into China Southern Airlines (CZ) for its fleet expansion, according to an industry insider. It is expected to reduce the carrier’s debt ratio, which was 70.88% at the end of 2011.
The Guangzhou-based carrier suspended trading Tuesday as “the parent company plans to make government capital injection to the carrier,” CZ said in a statement, without revealing the exact figure.
It will be the third time CZ has received a capital injection from Beijing. It received CNY3 billion and CNY1.5 billion in 2008 and 2010, respectively ( ATW Daily News, Feb. 23, 2010 ).
Separately, CZ announced it has entered into 12-year lease agreements with Air Lease Corp. (ALC) for 18 new aircraft, scheduled for delivery in 2013, 2014 and 2015. The aircraft comprise 12 Boeing 737-800s, four Airbus A320-200s and two A321-200s.
Earlier this year, CZ sealed a deal with Boeing for an order of six 777 freighters and 10 777-300ERs, which will be introduced between 2013 and 2016 ( ATW Daily News, Feb. 29 ).
China Eastern Airlines and Air China have also received government capital injections of CNY9 billion and CNY2.5 billion, respectively ( ATW Daily News, March 27 ).