China Eastern Airlines Corp, the nation's third-largest carrier,
said it is in talks to buy 40 Boeing Co 737 planes and has applied
to the government for 40 Airbus SAS A320s to expand its fleet.
The planned purchases may help expand the Shanghai-based
carrier's fleet by 53 percent to 322 aircraft in 2010 from the
current 210, Zhang Jing, a China Eastern spokeswoman, said
yesterday, confirming a Reuters report.
Singapore Airlines Ltd and parent Temasek Holdings Pte plan to
buy a 24-percent stake in China Eastern for HK$7.16 billion (US$918
million), cutting the carrier's debt and easing its "most
difficult" period, Chairman Li Fenghua said last week. The cash
infusion may help the company pay for the planes to compete with
Air China Ltd, according to Bloomberg News.
"Carriers are queuing up to buy planes as demand grows," said Ma
Ying, an analyst at Haitong Securities Co in Shanghai. "China
Eastern's stake sale will enable it to afford the purchases."
The carrier may reduce its liability-to-asset ratio to 80
percent from 95 percent after selling the stake to Singapore Air
and its parent, according to the company.
China's airplane purchases are forecast to reach US$289 billion
over two decades. The nation plans to expand its fleet by 12
percent annually to 1,550 by 2010, from 1,039 at the end of 2006,
according to the aviation regulator, and will triple to 4,000 by
2020.
(Shanghai Daily December 18, 2007)
