China Eastern Airlines to buy 60 A320 aircraft

November 23, 2012 - 2:20:04 pm
HONG KONG, China: China Eastern Airlines said on Friday it will buy 60 Airbus A320 aircraft in a deal worth $5.39 billion to meet booming domestic travel demand.


"The Airbus aircraft will primarily be used to satisfy the increasing demand for domestic medium and short-haul passenger air transportation routes," the airline said in a statement to the Hong Kong stock exchange.


"The purchase of the Airbus aircraft will further strengthen the company's competitiveness in the domestic civil aviation market and increase its operational capacity in domestic routes of the company."


The Shanghai-based China Eastern Airlines, one of the country's three major carriers, said the new aircraft will be delivered in stages from 2014 to 2017.


The company said the purchase will be funded through bank loans. The deal is subjected to shareholder and regulatory approvals.


The Hong Kong-listed shares of China Eastern closed up 1.88 percent before the announcement at HKD$2.71. The benchmark Hang Seng Index ended up 0.79 percent.


US airline manufacturer Boeing said in April this year that China Eastern will buy 20 Boeing 777-300 extended-range aircraft, in a deal worth nearly $6 billion at list prices.


China Eastern saw its first-half net profit plunge 65 percent year-on-year to 806.9 million yuan ($126.87 million) in August, mainly due to high fuel costs.


It also warned of challenges in the second half including the slowing Chinese economy, which the company said will "possibly hinder the future development of the group". (AFP)