China Eastern Airlines is seeking an exemption from a new government tax on aircraft operating leases to allow it to revive a plan to acquire Airbus A340-600s from International Lease Finance (ILFC).

Industry sources told ATI last week that the tentative deal under which the Shanghai-based carrier would lease four A340-600s had been scrapped and the airline would order more of the type and the smaller -500 directly from Airbus.

China Eastern's original plan was to lease the four A340-600s and purchase four A340-500s from Airbus to replace Boeing MD-11s that are to be converted to freighters. In addition, the carrier was to have taken three A340-600 options from Airbus. Letters of intent were signed, deposits paid and the combined deal was awaiting final CAAC approval.

When the CAAC indicated its opposition to the ILFC part of the deal, the sources said, the carrier immediately expanded its letter of intent with Airbus to cover the purchase of up to eight -500s or -600s.

Source: Flight Daily News