(Yicai Global) Sept. 23 -- China’s Xiamen Airlines is diversifying its fleet with a USD4.9 billion order before discount for the popular Airbus A320neo, an upgrade to the European plane maker’s best-selling A320 series.

Xiamen Airlines has inked a deal to buy 40 of the narrow-body passenger planes for delivery from 2024 to 2027, China Southern Airlines, which owns 60 percent of the buyer, said in a statement yesterday.

The agreement is the second big China order for Airbus in the second half of this year. In July, Airbus said it had penned contracts to supply 292 A320neo jets to four Chinese airlines, including China Southern.

Founded in 1984, all of the planes Xiamen Airlines owns were made by Boeing, with a tally of nearly 210 as of June 30. China Southern’s board approved a plan almost a year ago for its affiliate to lease 15 A321neo aircraft.

Xiamen Airlines plans to fund the A321neo purchase from revenue, bank loans, and by other means. The deal is not expected to have a significant impact on the airline’s cash flow and operations as it will be paid in instalments, China Southern added.

Shares of China Southern [SHA: 600029] lost 0.6 percent to end at CNY6.40 (US 90 cents) each today, while the broader Shanghai market shed 0.7 percent.

Editor: Emmi Laine, Xiao Yi