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China Eastern Airlines Corp., the country's third-largest carrier by fleet size, said Friday it had agreed to buy six 737-700 aircraft from Boeing Co. worth 2 billion yuan (US$240 million).
The planes, to be delivered by August 2006, would be used for both international and domestic routes, increasing the airline's capacity by 4.3 percent, China Eastern said in a statement.
The engines would be produced by General Electric Co., the Shanghai-based carrier added.
The order would be mostly funded with bank loans, which might push up the airline's debt-asset ratio in the short term but would have no impact on its cash flow and operations, China Eastern said.
The carrier has been on a buying spree this year to meet growing demand for air travel. In October, it agreed to buy 20 A330-300 aircraft from Europe's Airbus SAS. It has also an option to buy 10 more Airbus jetliners.
China Eastern now operates a fleet of 102 planes, including 60 Airbus planes, 17 Boeing 737s and 18 McDonnell Douglas aircraft.
China's strong spending power and relaxed visa policies will boost the number of its residents traveling abroad by 13 percent a year to about 100 million in 2020, based on estimates by the World Tourism Organization, a United Nations agency.
Boeing has forecast China will become the world's second-largest commercial aviation market after the United States within 20 years, flying a 2,800-strong fleet of planes.
To get there, Chinese airlines would require nearly 2,300 new airplanes by 2023, the U.S. aircraft maker said in a outlook report in October.
Boeing has a 62 percent market share in China but Airbus is closing the gap, securing a contract this month with China Aviation Supply Corp. for 23 A319, A320 and A321 commercial jets.
(Shenzhen Daily December 27, 2004)
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