July 28, 2015 / 11:30 AM / 4 years ago

Air China to raise up to 12 bln yuan to fund plane order

BEIJING, July 28 (Reuters) - Air China Ltd said on Tuesday it aims to raise up to 12 billion yuan ($1.93 billion) in a private placement of A-shares to help fund the purchase of 15 Boeing planes and upgrade its direct sales service.

The new B787 Dreamliners, worth 24 billion yuan in list prices, will fly long-haul routes to North America and Europe, Air China said in a stock exchange filing. Delivery of the jets is scheduled to begin from 2016, it added.

Chinese airlines are speeding up their expansion at home and abroad amid rising business travel and a surge in outbound tourism fuelled by an increasingly wealthy middle class in coastal and inland cities.

That has also helped pushed up Boeing and Airbus’ aircraft orders. In September, 2014, Boeing said it expected China to need more than 6,020 in the next 20 year, an 8 percent rise over its 2013’s estimates.

In April, Hainan Airlines announced a 24 billion yuan private placement deal and nearly half of fund raised would be used to buy 37 aircraft.

That was followed by similar initiative by China Eastern Airlines’ to fund the purchase of 28 planes.

The Shanghai-based carrier also plans to work with new investor Delta Air Lines to expand its global footprint. ($1 = 6.2084 Chinese yuan renminbi) (Reporting by Fang Yan and Matthew Miller in Beijing, editing by David Evans)

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