China Eastern Airlines to buy 16 Airbus A330 aircraft

Monday, January 4, 2010, 14:58 by Jose Philip

China Eastern Airlines, based in Shanghai, China, has decided to buy a total of 16 Airbus A330 aircraft in order to meet the increasing demand for medium-haul as well as long-haul flights.

In a statement, China Eastern Airlines, the third biggest airline in China, said the total cost of the 16 Airbus A330 planes would come to about 17.75 billion yuan ($2.6 billion), based on the 2007 price catalogue of Airbus Industrie.

Thought the total value of the deal is 17.75 billion yuan based on the listing price in 2007, Airbus Industrie usually grants discounts, China Eastern Airlines said.

The 2-aisle Airbus A330 aircraft will be delivered between 2011 and 2014. Once all the 16 planes are delivered, the capacity of China Eastern Airlines will go up by 15.22%.

China Eastern Airlines will use the 16 Airbus A330 aircraft for medium-haul and long-haul international flights to North America, South America, Europe, and Australia, according to Chinese media reports.

It may be noted that both the Europe-based Airbus Industrie and the United States-based d Boeing Company have been striving to get orders from China, where the demand for aircraft is expected to rise as the country’s economy is continuing to grow.

All other international Chinese airlines except China Eastern Airlines are short-haul carriers, flying to destinations such as South Korea and Japan. With the development of Shanghai into an international hub for transportation hub, China Eastern Airlines and other China-based international carriers have been prompted to provide a larger number of long-distance, international flights.

Aviation analysts in China say that the new Airbus aircraft will help China Eastern Airlines tackle competition from high-speed railway as well as enable the airline to serve Shanghai as an international transfer hub in a better manner after it buys Shanghai Airlines (SAL).

According to Li Jiaxiang, director of the Civil Aviation Administration of China, the high-speed railway service between Wuhan and Guangzhou, launched on

December 26, 2009, has cut down the travel time between the two cities from 10 hours to 3 hours.

In the statement, China Eastern Airlines said it will buy the Airbus A330 planes with loans from the banks. Many commercial banks in China, including the Bank of Construction and the Bank of Communications, have already loaned as much as 106 billion yuan to China Eastern Airlines.

China Eastern Airlines, headquartered at Shanghai Hongqiao International Airport, operates over 80 international and regional routes as well as about 330 domestic routes. Its main base is Shanghai Pudong International Airport.