Taiwan’s China Airlines splits $11.9 billion aircraft deal between Boeing and Airbus

TAIPEI (Reuters) -Taiwan’s China Airlines will split an order for its long-haul fleet renewal between Boeing (NYSE:BA) and European rival Airbus and buy freighters from the U.S. planemaker in a closely watched deal worth almost $12 billion.

Taiwan’s largest carrier had been considering the 777X, of which the 777-9 is a variant, and A350-1000 as replacements for its fleet of 10 Boeing 777-300ERs and to provide capacity for future growth, sources have told Reuters previously.

China Airlines said on Thursday that it would buy 10 Boeing 777-9 aircraft and 10 Airbus A350-1000s as well as four 777-8 freighter aircraft for $11.9 billion, with deliveries for the new aircraft starting from 2029.

“China Airlines has been actively planning its fleet size and is steadily expanding its presence in the global passenger and cargo markets,” it said in a statement.

The A350s will be powered by Rolls-Royce (OTC:RYCEY) engines while the 777-9s will be powered by GE engines, it added.

Multibillion-dollar deals for new aircraft often have to take political as well as business considerations into account – especially in the case of Taiwan, given its international situation and pressure it faces to give in to China’s sovereignty claims, which are rejected by the democratically elected government in Taipei.

The United States is Taiwan’s most important international backer and arms supplier despite a lack of formal diplomatic ties, and China Airlines’ majority owner is the Taiwan government.

China Airlines Chairman Hsieh Shih-chien said in October that the carrier was not facing any political pressure on the decision about its long-haul fleet.

China Airlines shares closed 1% down on Thursday, in line with the broader index.