China Eastern Airlines has agreed to buy 60 Airbus A320 aircraft.
In a statement to the Hong Kong Stock Exchange, Shanghai-based China Eastern said the new aircraft, which are worth approximately US$5.3 billion at currently list prices, would help it meet rising demand for domestic short- and medium-haul passenger routes. While the purchase is still subject to approval by the airline’s shareholders and Chinese regulators, deliveries of the new single-aisle jets are expected to commence in 2014 and run until 2017.
The new A320s, which China Eastern typically operates with 158 seats in two classes, will replace eight Bombardier CRJs and 10 Embraer E-145 regional jets, which are being sold to Airbus.
The Airbus deals mark the latest phase in Chinese airlines’ short- and medium-haul fleet expansion efforts. According to the latest Boeing forecast, China will need 5,260 new aircraft valued at US$670 billion by 2031, and approximately three quarters are expected to be single-aisle jets like the A320, Boeing 737 or COMAC C919. Aside this latest deal, China Eastern has outstanding orders for 45 B737s and 20 C919s. Air China has ordered 30 A320s, 133 B737s and 20 C919s, while China Southern has agreed deals for 39 A320s, 41 B737s and 20 C919s.
The latest deal also marks a thawing of relations between China and Europe, following the EU’s decision to suspend the inclusion of international airlines in its unpopular Emissions Trading Scheme (ETS). Chinese airlines, including China Eastern, had stopped placing orders for twin-aisle Airbus jets in retaliation. While there was never a suspension of single-aisle orders like the A320, this 60-plane order is the largest Chinese Airbus deal since the ETS truce.
