LONDON — Shenzhen-based Donghai Airlines announced its intent to buy 25 Boeing 737 MAX 8 and 5 Boeing 787-9 aircraft at the Farnborough Airshow today.
The deal, still subject to government approval, is worth more than $4 billion at current list prices ($1.8-$2.6 billion applying our standard discount range) and follows on after an order for 15 737-800s and 10 737 MAX 8s placed back in 2013.
Donghai Airlines’ home base of Shenzhen is a city of 10.8 million people nestled in the Pearl River Delta, the most populous conurbation in the world with a population of more than 130 million people.
The Pearl River Delta has long been a manufacturing and export hub, and Donghai’s initial business model from its founding in 2002 as East Pacific Airlines till 2013 was exclusively focused on cargo.
“Donghai Airlines has undergone steady development over the past 10 years since the beginning of our freighter operations in 2006,” said Mr. Wong Cho-Bau, Chairman, Donghai Airlines. “Under China’s One Belt One Road initiative, we will accelerate our fleet expansion plan to satisfy the rapidly growing air travel market and help build our home base Shenzhen as the transportation hub in southern China.
“We’re committed to introducing new next-generation airplanes that deliver the industry-leading fuel efficiency and passenger comfort in their segment market as a key effort to fulfill the plan.”
Over the last decade and a half, Shenzhen has developed into China’s answer to Silicon Valley, and its emergence as a tech hub has caused air travel demand to boom.
Accordingly, Donghai launched passenger service two years ago (it now operates 11 Boeing 737-800s serving ) and has major growth ambitions. Shenzhen is well served with domestic connectivity from its namesake airline (Shenzhen Airlines) but development of international connectivity has lagged behind nearby Guangzhou, which had previously been established as the international hub for the Pearl River Delta.
With its fleet of 787-9s, Donghai may be poised to adjust the traditional balance of power between the two airports with long haul service at Shenzhen.