UPDATE 2-China's Juneyao in talks with Boeing, Airbus on plane orders - chairman

Thu Mar 6, 2014 11:29pm EST

By Fang Yan and Jonathan Standing

BEIJING, March 6 (Reuters) - China's Juneyao Group, the parent of Juneyao Airlines, is in talks with planemaker Boeing and Airbus about acquiring more than 20 more planes in a deal that may be worth more than $1.8 billion, its chairman said on Thursday.

The aircraft will be used by a low-cost airline Juneyao plans to launch in the second half of the year, Chairman Wang Junjin told Reuters on the sidelines of China's annual parliament session in Beijing.

"We are in talks with both of the planemakers now, we are still evaluating the options," Wang said, adding he would not consider the A320neo, a more fuel-efficient variant of the A320 narrowbody plane which Airbus has been marketing aggressively in China.

Juneyao's budget carrier subsidiary will fly a domestic service from the southern Chinese city of Guangzhou initially and then expand into Southeast Asia in the future, Wang said.

"We are glad if any customers show interest in our airplanes," said Boeing spokesman Wang Yukui. An Airbus China spokesman declined to comment.

Late last month China's aviation authority pledged to promote the country's fledging budget airline industry with supportive policies, a move industry observers say could lead to a boom in low-cost air travel in the world's most populous country.

China's biggest low-cost carrier Spring Airlines, which has a fleet of 40 A320s, is also set to make an order for up to 30 more A320s, according to its chairman Wang Zhenghua.

Juneyao Airlines operates a fleet of 34 Airbus planes and flies on more than 70 domestic routes in China as well as to Taipei, South Korea and some southeast Asian destinations.

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