Hainan Airlines will take 20 of the 45 current-production Airbus A330s that the Chinese government has ordered, in return for Airbus setting up a completion center in China.

China Aviation Supplies—the agency that buys aircraft in bulk for Chinese airlines—has also allocated 15 of the aircraft to China Eastern, five to Tibet Airlines and five to Sichuan Airlines, industry sources said.

Such decisions are made under the influence of the Civil Aviation Administration of China (CAAC), to which China Aviation Supplies is attached. An airline’s keenness to buy aircraft may be only one factor in its receiving an allocation.

Engines for the 45 A330s have not been selected. All the carriers that are receiving an allocation, except Tibet Airlines, already operate the A330s—they use only the Rolls-Royce Trent 700 engine. Incumbency may not offer much advantage to Rolls-Royce in such a political deal, however.

All the aircraft will be A330-200s or A330-300s, lacking the new Rolls-Royce Trent 7000 engine and other improvements of the forthcoming A330-800 and A330-900 models.

Before the order was concluded, Hainan Airlines was already expected to receive the largest allocation. Hainan Airlines is China’s fourth-largest carrier NS has been unusually active in opening new routes, including long, thin ones for which A330-200s are most suited. According to Aviation Week data, Hainan Airlines currently operates 20 A330s, with three more on order before counting its allocation from the bulk acquisition. Some may join the fleets of Hainan Airlines’ subsidiaries and affiliates.

China Eastern, which has 43 in-service A330s, has probably received an allocation because, among the central government’s three big airlines, it is most in need of additional widebody capacity. China Southern and Air China may get aircraft from a second batch of 30 A330-200s or A330-300s, for which China Aviation Supplies has so far signed only a memorandum of understanding.

Aviation Week first reported in January 2014 that Airbus was offering to build an A330 completion center in China as a lure for a large order of A330s. At that time, a contract for 200 was considered possible. China eventually proved unwilling to take so many, but Airbus confirmed on July 2, that it would set up the facility at Tianjin. Beginning in 2017, Airbus will send flyable but incomplete A330s to the plant for installation of cabins, painting, testing and delivery.

In general, Chinese airlines do not have much interest in acquiring additional current-production A330s, industry sources have said. It seems they are getting so many mostly because the government wanted the completion center for the promotion of the aerospace industry. Airbus says it is confident an order for the second batch of 30 A330s will be confirmed very soon.

The head of Airbus’s commercial aircraft operation in China, Eric Chen, told reporters at Aviation Expo China in Beijing on Sept. 16 that Chinese airlines certainly did want the A330s.

Sichuan Airlines does, at least. Industry sources said in December that the carrier was negotiating for 10 or more A330s of the initial series, though it was expecting an unusually low price. With four A330-200s and four A330-300s in service, Sichuan Airlines is opening long, thin routes at the behest of local authorities to promote municipal economies, and Chengdu’s in particular.

Air China subsidiary Tibet Airlines operates only A320-family aircraft, but has five A330-200s on order. The low thrust loading available on that short version of the A330 is probably an advantage for the carrier, since its base, Lhasa Gonggar Airport, is about 3,500 meters (11,500 ft.) above sea level.

Many western and southwestern Chinese airports are also high, though few are as high as Lhasa. The Chinese airlines have not regarded the General Electric CF6-80E1, one of three engines available on the first series of A330s, as adequate for those airports, industry sources have said. The great majority of Chinese A330s have Trent 700s, though Pratt & Whitney PW4000s are also used.

Aircraft deliveries under the bulk contract will begin in 2016, and extend until at least 2018, allowing Airbus to continue supplying 20-25 A330s to China annually, as it has been doing in recent years, Chen said. The calculation evidently includes the 30 so far unconfirmed aircraft.

Source: China Allocates Airbus A330s To Four Airlines