China Eastern Airlines will take delivery of the 20 Boeing 777-300ERs in its purchase agreement inked last week between 2014 and 2018.
The aircraft will be paid for in cash in instalments and will be funded through the airline’s working capital, bank loans and other available sources of financing, says the carrier in a statement on the Hong Kong Stock Exchange.
“The Boeing aircraft will primarily be used to satisfy the increasing demand for international long haul passenger air transportation routes, to increase the company’s capacity in such routes, and to enhance the international routes network of the company,” it adds.
The carrier will also dispose of five Airbus A340-600 simultaneously because of the aircraft’s “high operation costs” and “relatively weak route competitiveness”.
It added that the average age of the A340s is 8.3 years and mainly serves long-haul international routes from Shanghai to New York and Los Angeles.
The Airbus aircraft are expected to be delivered to Boeing in stages from 2014 to 2015, depending on the delivery dates of each 777.
Boeing last week announced that the SkyTeam carrier has committed to order 20 777-300ERs in a deal valued at $5.97 billion at list price. China Eastern needs approval from the Chinese government before the 777 order is added to Boeing’s backlog.
The commitment comes shortly after the carrier announced a decision to convert orders for 24 Boeing 787s into a deal for 45 Boeing 737s.