China Eastern Airlines to buy 25 Airbus A330neo jets for US$9.4 billion
An Airbus A330neo performs at the 53rd International Paris Air Show at Le Bourget Airport near Paris, France on Jun 19, 2019. (File photo: Reuters/Pascal Rossignol)
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HONG KONG: China Eastern Airlines said on Friday (Jun 26) that it plans to buy 25 A330neo jets from Airbus for a catalogue price of about $9.35 billion, as the Chinese carrier expands its widebody fleet to serve more international routes.
The aircraft are scheduled to be delivered in batches from 2029 to 2033, China Eastern said in a filing to the Shanghai Stock Exchange, adding that the two companies signed the purchase agreement in Shanghai earlier in the day.
China Eastern said in the filing that the catalogue price of US$9.35 billion is based on Airbus’s January 2025 list prices and the actual transaction price would be lower, with the airline securing a discount more favourable than in previous purchases from the European planemaker. Large discounts are standard practice when airlines place sizeable orders with planemakers.
The Shanghai-based airline said the widebody jets would primarily be deployed from Shanghai Pudong Airport to expand intercontinental destinations and increase flight frequencies, bolstering the hub’s role as a transfer centre for long-haul routes.
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The deal comes months after China Eastern in March signed a separate agreement with Airbus to purchase 101 A320neo aircraft at a list price of about US$15.8 billion, as major Chinese airlines point to a renewed focus on international expansion as a key growth driver.
It also comes as Airbus steps up efforts to expand its share in the world’s second-largest aviation market, where it expects passenger traffic to grow by around 5 per cent annually over the next two decades.
Reuters has reported the European planemaker has been in on-off negotiations in recent years to secure a huge order of up to 500 jets in China – a type of package often tied to state visits – but no deal was announced when French President Emmanuel Macron visited China in December.
The A330neo is an upgraded fuel-efficient version of the previous-generation Airbus A330 long-haul jet, featuring high-aspect-ratio wings and improved aerodynamics. It is powered by Rolls-Royce Trent 7000 engines.
China Eastern expects at least 10 of its older A330 jets to be retired on age grounds during the delivery period, meaning the new planes will partly serve as replacements.
The deal would be funded through a mix of the carrier’s own capital, bank loans, bond issuances and other financing instruments. China Eastern said the phased payment structure was not expected to have a material impact on its cash flow or operations.
In a separate filing, China Eastern said one offshore unit would issue an overseas bond worth up to 2.8 billion yuan (US$411.89 million), without specifying the use of proceeds.
Source: Reuters/nh
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