Tue, May 01, 2012 - Page 10 News List

China Eastern set to buy 20 Boeing 777s worth US$6 billion

CONVOLUTED:As part of the deal, which Boeing said still needed Beijing’s approval, the US firm is to buy five Airbus A340s from the airline for delivery later

AP, HONG KONG

China Eastern Airlines Co (中國東方航空) plans to buy 20 Boeing 777 jets worth about US$6 billion, while selling five Airbus A340s to the US plane maker because they are costlier to run, the Shanghai-based airline said yesterday.

The airline said it was selling the Airbus A340-600 airplanes worth US$708 million to Boeing because they have high operating costs and “relatively weak route competitiveness.”

The Airbus jets are about 8.3 years old on average and fly long-haul routes to New York and Los Angeles.

China Eastern said the list price for the 777-300ERs was US$5.94 billion, but it negotiated a discount. Airlines routinely get discounts from aircraft makers and the final selling price for aircraft is rarely disclosed.

Boeing said last week the deal needed the approval of the Chinese government.

The new jets will be delivered in stages from 2014 to 2018. The airline will pay for them using working capital, bank loans and other sources of financing.

The 777 is a twin-engine plane designed for long trips. It can carry 365 passengers up to 7,930 nautical miles (14,686km).

The 777s will be used to meet increasing demand on international long-haul routes, the airline said.

The Airbus A340-600 is a four-engine plane that carries about the same number of passengers and travels the same distance as the 777.

The unaudited book value of the five Airbus jets China Eastern is selling was approximately 4.47 billion yuan (US$708 million) at the end of last month.

They will be delivered to Boeing in stages from 2014 to 2015.

Boeing spokesman Yukui Wang (王汪玉奎) would not comment on the deal to buy China Eastern’s second-hand Airbus jets, but he said the company had in the past bought jets made by other plane makers and then sold them to other companies.

This story has been viewed 2741 times.
TOP top