China Eastern to buy Boeing aircraft

China Eastern Airlines Corp (東方航空), the country's third-biggest carrier by fleet size, agreed to buy six 737-700 jetliners from Boeing Co worth 2 billion yuan (US$241 million) to meet growing demand for air travel.

The carrier said in a statement to the Shanghai stock exchange that it signed an agreement with the Chicago-based aerospace company yesterday. The new planes, which will increase the Shanghai-based airline's capacity by 4.3 percent, will be delivered by August 2006.

China Eastern, China Southern Airlines Co (南方航空) and the nation's other airlines have benefited as rising urban incomes make air travel affordable to more people. Greater spending power and relaxed visa policies will boost the number of Chinese residents traveling abroad by 13 percent a year to about 100 million in 2020, according to the World Tourism Organization, a UN agency. The projected growth is triple the global rate.

China Eastern's order is the second order this week for Boeing's passenger planes. Japan Airlines Corp, Asia's largest carrier by sales, said on Wednesday it will buy 30 of Boeing's newest aircraft, the 7E7, with options for 20 more.

Boeing fell behind Toulouse, France-based Airbus SAS last year by the number of aircraft deliveries. Air Deccan, India's sole low-cost carrier, said on Dec. 21 it will buy 30 Airbus A320 planes. Last week, AirAsia Bhd, Southeast Asia's largest discount airline, signed a contract valued at US$2.5 billion to buy 40 A320 planes from Airbus.

China Eastern said the new Boeing planes, which will used General Electric Co engines, will be used to replace some of the older aircraft in its fleet. A 737-700 aircraft can seat 126 to 149 passengers with a maximum range of 7,038km. It has a list price of US$50.5 million to US$59 million.

China Eastern now operates 102 planes, of which 67 are made by Airbus and 17 by Boeing. The airline's longer-range aircraft are mainly from Airbus, and its narrow-body planes include the 737 model from Boeing and the A320 from Airbus.

China Eastern has been expanding its fleet this year.