China Eastern Airlines has signed a deal to buy 10 A320 passenger jets from
Airbus to meet domestic demand for short-and medium-distance passenger
The cost would be below the market price of 4.64 billion yuan (US$618
million), said the company in a statement on its website.
The purchase would be paid in US dollars mainly with loans from commercial
banks, and analysts said it would have no effect on the carrier's daily cash
flow and its short-term operations.
The aircraft would be delivered between March 2011 and May 2012, according to
Air China and China Southern Airlines announced earlier this month that they
had agreed to buy 23 and 45 passenger jets respectively to improve operating
China Eastern said the company's profit totaled 263 million yuan in the first
six months after suffering losses for two consecutive years, on the back of
better performance and income generated from the rising yuan.
It carried 18.33 million passengers and 422,800 tons of cargo in the first
half, up 9.17 percent and 0.81 percent respectively.
As one of the three largest carriers in China along with Air China and China
Southern Airlines, China Eastern Airlines registered losses of 467 million yuan
in 2005 and 2.78 billion yuan in 2006.
Under the fierce competition from other domestic and foreign airlines, the
China Eastern's market share in Shanghai, its major market, has dropped below 40
Li Fenghua, chairman of the airline, was optimistic about the company's
future performance, and said it was working hard to fulfill the goal of more
than 200 million yuan in profits this year.
The company is in talks with Singapore Airlines, which is looking to become a
Trading of the company's stocks has been suspended since May 22, and its
stock price closed at 9.6 yuan before suspension.