Boeing lands $4.2 billion jet deal with rapidly expanding Chinese airline

China’s fast-growing Hainan Airlines said it is buying 19 Boeing passenger jetliners in a deal worth $4.2 billion.

The company described its plans in a filing with the Shanghai Stock Exchange, saying it needs more aircraft to meet skyrocketing travel demand among Chinese consumers.

Hainan Airlines, a unit of China's powerful HNA Group, said it would buy 13 Boeing 787 Dreamliners and six Boeing 737 Max 8 jets to help manage its continued “rapid growth” in China’s consumer travel market as middle-class incomes rise.

Hainan said it plans to issue $2.18 billion worth of corporate bonds to help fund the deal.

The Dreamliner deal is a welcome boost for slow Boeing widebody sales. Boeing makes Dreamliners in Everett and builds the smaller 737 jets in Renton.

Boeing declined to provide more information on the deal.

Chinese airlines have expanded their fleets and route networks in recent years as business booms. China will pass the U.S. and become the world’s largest air travel market by 2024, according to an International Air Transport Association forecast.

To meet surging demand, China is building 74 new airports by 2020, increasing the country's total number of airports to around 260, the Civil Aviation Administration of China has reported. At least 30 are already under construction, while another 40 will be built over the next three years.

Hainan Airlines and its owner HNA Group have been among the most aggressive players as it invests in U.S. companies and other foreign airlines in recent years. Earlier this month, Hainan said it applied to Chinese authorities for rights to fly to Zurich, Tehran, Sydney, Australia, and Tijuana, Mexico.

Last year, HNA paid $137 million to acquire eight Puget Sound-area golf courses.

In 2015 and 2016, HNA bought a stake in Azul, Brazil’s third largest airline, and also acquired Swiss airline catering company Gategroup Holding for $1.5 billion, and snapped up stakes in airlines Virgin Australia and TAP, the Portuguese national airline.

HNA's rapid expansion is raising questions in North America, including its increasingly heavy debts and how it is financing all its acquisitions, including a recent report in the New York Times.

(Andrew McIntosh - Puget Sound Business Journal)