Citing the extended delivery delays in the Boeing 787 programme China Eastern has cancelled orders for 24 of the widebody aircraft, and has opted to convert those positions to 45 737 narrowbodies.
The move drops Boeing's 787 backlog below 800 for the first time, and is the first publicly acknowledged cancellation due to the delays to the programme. Previously, customers had cited economic instability as the reason for cancelling orders.
China Eastern in a statement to the Stock Exchange of Hong Kong said the order for 45 "brand new" 737 aircraft is worth $3.3 billion at list prices, but the company extracted "significant price concessions" from the airframer.
The carrier stated the aircraft will be used primarily to satisfy rising domestic demand and increasing demand on international and regional medium and-short-haul routes.
The order for the 24 widebody aircraft was split between nine 787s for subsidiary Shanghai Airlines and 15 for China Eastern.
The 45 new 737s are expected to be delivered in stages from 2014 to 2016, and will increase the airline's capacity by 8.65% based on 31 December 2010 levels.