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December 29, 2009

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Airline set to buy 16 A330 jets

CHINA Eastern Airlines will buy 16 Airbus A330 aircraft in a deal expected to be worth as much as 17.75 billion yuan (US$2.6 billion).

The planes will be delivered between 2011 and 2014 and will help the airline boost its capacity on international routes, it said in a statement to the Shanghai Stock Exchange yesterday.

The deal's value is worth 17.75 billion yuan based on the jet's listing price in 2007, but Airbus normally grants discounts, the statement said.

"The planes will meet the market demand for middle- and long-distance routes in the following years and enhance China Eastern's competitiveness in these markets," said the Shanghai-based carrier, which will merge with smaller rival Shanghai Airlines. They will fly on routes linking China with Europe, the United States and Australia.

The airline is investing in new planes to boost its international route capacity as the advent of high-speed train travel in the domestic market will hurt its bottom line, an analyst said.

"High-speed railways have started to impact the domestic aviation market, so it's necessarily for carriers to develop international routes," said Li Shurong, an analyst at Shenyin and Wanguo Securities Co.


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