"The transaction will expand the overall fleet capacity of the group and optimize the fleet structure," Air China said.
PARIS - Air China said Friday it had ordered 100 Airbus A320 series medium-range single-aisle passenger jets, which carry a catalog price of $8.8 billion.
Air China said in a statement it would acquire 60 of the aircraft for itself and 40 would be bought by its subsidiary Shenzhen Airlines.
"The transaction will expand the overall fleet capacity of the group and optimize the fleet structure," Air China said in a notification to the Hong Kong Stock Exchange where its shares are listed, saying it would add nearly 16% to capacity.
The airline group said it also "expects the Airbus aircraft will deliver more cost efficient performance and provide more comfortable services to passengers."
It said the aircraft were worth $8.8 billion at catalogue prices but that "the Airbus Company has granted to (Air China) significant price concessions..."
The exact amount of the discount remains to be negotiated, Air China said in a notification to the Hong Kong Stock Exchange.
The aircraft are set to be delivered in stages from 2014 to 2020, and that it would fund the purchases from a mix of cash generated from operations, commercial bank loans and other financial instruments.
As part of the transaction, Airbus agreed to buy back six larger A340 series aircraft, added Air China.
Airbus has a factory in China that assembles A320 series aircraft.
Copyright Agence France-Presse, 2013