Monday, April 21, 2014

Hot Dog, Its Shandong Down for Fifty Max and NG from 2016-2020

Just when the order book has a stagnation, and a press writing about thin orders for the first part of 2014; up pops this little press cork about Shandong Airlines from China, boosting its fleet with fifty: 16 NG's and 34 Max Aircraft until 2020.

Airline to buy 50 jets
Xinhua-Global Times | 2014-4-22 0:13:02
By Xinhua - Global Times

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China's Shandong Airlines signed a contract on Monday with the US-based Boeing Company to buy 50 Boeing 737 passenger airplanes.

The airliners, including Boeing's 737 NG and 737 MAX models, will be delivered to Shandong Airlines from 2016 to 2020, said Ma Chongxian, chairman of the company, which is based in Ji'nan, capital of East China's Shandong Province.

Shandong Airlines aims to increase its fleet to over 140 at the end of 2020, which will be a surge of almost 100 percent, Ma said.

Shandong Airlines already operates 74 passenger aircraft, including 67 Boeing 737 airplanes.

Xinhua - Global Times

Boeing is busy booking billions while  the report of the stagnate order book is greatly exagerated. 
2014 marches forward. There are other orders in limbo in the Asia market. Those with ANA promises and others have been reported, but not added to the order book, which is often the case as arangements behind the scenes have not been completed. Boeing will not add orders until the customers consents for a release of the information. Eventually it may end up on Boeing's unidentified customer list for awhile. This Shandong order represents a little more than a months worth of production when analyzing the over-all impact to the production line. Even though they will pace deliveries during the 2016-2020 four year window, it allows all parties a seamless integration of current aircraft with its future Max deliveries.

Using a rule of thumb financial scale with, Booking 80 million for NG's and maybe 100 million for each Max, an unofficial estimate would float around at 4.65 Billion $ US . Without out details on future Max aircraft, and only having some actual NG or Max unit numbers availble it is a safe estimate that Shandong needs that much money during the purchasing time frame mentioned.