OKAIR; 787; 737MAX-10; 737MAX-8; Three Planes Air to Air; Over Mountains; K66674

PARIS – Chinese low-cost carrier (LCC), Okay Airways, announced an order for eight 737 MAX 10 aircraft and seven 737 MAX 8 aircraft Tuesday morning at the Paris Air Show.

China’s first private sector low-cost carrier also announced by a memorandum of understanding (MoU) for five 787-9 Dreamliners as part of its long-term fleet strategy and expansion.

Okay Airways is one of the myriad Chinese low-cost carriers based in secondary cities. Its headquarter is Tianjin’s Binhai International Airport, where it operates 20-25 daily flights to 22 destinations.

It also has a hub at Changsha International Airport, with other 20-25 daily flights to 24 destinations. But as is par for the course for Chinese carriers, it also operates a ton of point-to-point routes between major metro areas.

Its fleet currently consists of 22 planes, including 17 Boeing 737-800s, 4 737-900ERs, and 1 737-300F. It has 1 737-800 and 5 737-900ERs on order and previously had 14 737 MAX 8s and 3 737 MAX 9s on order.

With the new purchase, its 737 MAX order book grows to 32 frames in all, while overall it has 67 planes on order. The 787 Dreamliner represents its first investment in widebody aircraft with 5. And Okay also has an order for 30 of the Chinese-built Xian MA700 turboprop and is a launch customer for the type.

“We are committed to investing in our aircraft fleet in order to keep growing ahead of the market and enhancing our customers’ flying experience,” said Wang Shusheng, chairman of Okay Airways. “These new airplanes are expected to deliver extraordinary efficiency, reliability and passenger comfort in their segment market, making them very compelling for us in our fleet growth and network expansion.”

“We are very pleased to welcome Okay as a launch customer of the 737 MAX 10 and a new customer of the 787-9 Dreamliner,” said Ray Conner, Vice Chairman of The Boeing Company. “We also appreciate Okay’s reaffirmation of additional 737 MAX 8s, which represents the heart of the single-aisle market. We value our longstanding partnership and look forward to delivering these airplanes to support their ambitious growth plans.”

Okay’s order is further validation for Boeing’s stretched 737 MAX 10, which we expect to find great success in the Chinese market due to demand growth and infrastructure/ATC constraints.

Okay Airways’ hubs at Tianjin and Changsha are not particularly constrained, but they are massive hubs in a numerical sense. In 2016, Changsha handled 21.3 million passengers (roughly as many as Salt Lake City) while Tianjin handled 16.9 million (about as many as Dallas Love Field).

Both airports are also likely hubs for further long haul route development, which is where the 787-9s come into play. Tianjin has a couple of long haul flights to Auckland, London Gatwick, and Moscow Sheremetyevo, as well as several regional international flights.

All of its long-haul flights are currently offered by Hainan Airlines subsidiary Tianjin Airlines with the Airbus A330-200. Tianjin actually has strong potential for long haul flying, however, as it is only an hour and twenty minutes by road from Beijing.

Beijing Capital International Airport is tapped out in terms of available slots, so airlines could look to Tianjin as an alternative to serve China’s capital. Changsha also has only a few long-haul flights to Los Angeles, Melbourne, and Sydney from Hainan Airlines again, as well as to Frankfurt from China Southern. Both of Okay Airways’ hubs are ripe for long haul growth.