VZCZCXRO1487
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #1143 2900700
ZNR UUUUU ZZH
R 170700Z OCT 07
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 6536
INFO RUEHOO/CHINA POSTS COLLECTIVE
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC

UNCLAS GUANGZHOU 001143 
 
SIPDIS 
 
SENSITIVE 
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STATE FOR EAP/CM SECOR AND YAMAMOTO 
STATE FOR EEB/AN ROBL AND LIMAYE-DAVIS 
STATE FOR EEB/CBA MERMOUD AND THOMPSON 
STATE PASS DOT A/S ANDREW STEINBERG 
STATE PASS DOT DAS SUSAN MCDERMOTT AND GLATZ 
 
E.O. 12958: N/A 
TAGS: EAIR ETRD CH
SUBJECT: Shenzhen Airlines to Buy 100 Boeing Aircraft 
 
 
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¶1. (SBU) Summary: Shenzhen Airlines will soon announce a deal to buy 
100 Boeing Aircraft -- the largest Boeing order for a Chinese 
airline -- according to senior executives. The carrier claims it is 
China's most profitable airline.  It opened a pilot training school 
this year, which will graduate its first students in 2008.  End 
summary. 
 
Buying Boeings 
-------------- 
 
¶2. (SBU) Shenzhen Airlines has just signed a contract to buy 100 
Boeing aircraft, which is the largest Boeing order from China's 
civil aviation industry, according to Shenzhen Airlines President Li 
Kun.  Li told Congenoffs on October 12, 2007, that the airline would 
announce the deal at an appropriate time in the near future.  He 
explained that the airline was purchasing short and mid-range 
aircraft, not aircraft suitable for intercontinental travel. 
Currently, the company has over 40 Boeing planes and about 12 Airbus 
aircrafts.  In 2006, they took delivery of 12 planes -- a record for 
the carrier.  Li said the firm plans to increase its fleet to 100 
aircraft by 2008 and 600 aircraft by 2015. 
 
China's Most Profitable Airline 
------------------------------- 
 
¶3. (SBU) Shenzhen Airlines is China's most profitable carrier, 
explained Liu Hang, the firm's Deputy Party Secretary. Citing data 
from Citibank, Liu said the company's pre-tax earnings were 25.14 
percent of total revenue -- the highest among China's airlines and 
higher than many foreign carriers, including Lufthansa, British 
Airways and Southwest. Shenzhen Airlines' total revenue was RMB 6.07 
billion (about US$800 million) in 2006.  Liu said its revenue goal 
for 2007 is RMB 10 billion (US$1.3 billion), an increase of more 
than 60 percent. 
 
Pilot Training 
-------------- 
 
¶4. (SBU) Liu also briefed Congenoffs on the firm's new pilot 
training school.  He explained that pilot shortage was a problem 
facing the entire aviation industry in China, but Shenzhen Airlines 
was of one of only a few airlines in China to open its own pilot 
training school.  According to Liu, the school enrolled it first 
students this year and currently has 120 students who will graduate 
in 2008.  He said the school planned to admit 240 students next 
year. 
 
GOLDBERG