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Sunday, April 29, 2012

China Eastern Airlines says to buy 20 Boeing aircraft

 HONG KONG (Dow Jones)--China Eastern Airlines Corp. (0670.HK) said Monday it has agreed to purchase 20 B777-300ER aircraft from Boeing Co. (BA) for US$5.94 billion.

The Shanghai-based airline said the new aircraft, which will be delivered in stages from 2014 to 2018, will help satisfy the increasing demand on international long-haul routes.

"The purchase of the Boeing aircraft will further strengthen the company's competitiveness in the international civil aviation market and increase its operational capacity in international routes of the company," China Eastern said in a statement.

Meanwhile, the company has agreed to sell five Airbus A340-600 aircraft, in a deal worth CNY4.47 billion (US$707 million), it said in the same statement. The sale will help the airline cuts costs.

Boeing said on Friday that China Eastern Airlines had agreed to buy the 20 aircraft, pending Chinese government approval.

The Chinese carrier also said it would sell five Airbus A340-600 aircraft, with an unaudited book value of about 4.47 billion yuan ($708 million), to Boeing.

China Eastern said the A340-600 aircraft, which mainly serve long-haul international routes such as Shanghai-to-New York and Shanghai-to-Los Angeles, had high operation costs and relatively weak route competitiveness.

The Airbus aircraft began service in 2003 and 2004 and had an average usage of about 8.3 years.

China Eastern said the purchase of the Boeing aircraft and disposal of the Airbus planes would lower its unit operation costs and optimize the fleet structure for long-haul air transportation routes.

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