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Deal to buy 20 A320 jets sealed

CHINA Eastern Airlines has signed a US$1.45-billion agreement with Airbus for 20 A320 aircraft to meet increasing demand in the domestic short to middle range routes.

The planes will be delivered from 2011 to 2013, the airline said in a statement to the Shanghai Stock Exchange yesterday.

The carrier did not disclose how much it had agreed to pay but said it was less than the list price of US$1.45 billion.

"The aircraft are purchased on the basis of the assessment that the company will have steady and organic growth over the next few years when the global economy recovers," the country's third-largest carrier by fleet said.

It also believes the air transport market in China will develop better in the next few years, so the aircraft purchase is timely as they meet increasing demand in the short and middle range routes. They will also help improve its network coverage and profitability.

"The 20 jets will enable the carrier to better cope with domestic air travel demand," said Li Lei, an analyst at China Securities Co.

A spokesman of Airbus China said the 20 jets are part of a bulk order of 110 aircraft ordered by the Chinese government in 2007.

The funds for the purchase will provided by banks that China Eastern has formed strategic cooperation with.

The Shanghai-based carrier has obtained credit lines totaling 76 billion yuan from the Agricultural Bank of China, Shanghai Pudong Development Bank, the Bank of Communications, China Construction Bank and China Development Bank in the past half year.


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