China Eastern Airlines: Plans to purchase 101 aircraft from Airbus

On March 25, China Eastern Airlines Co., Ltd. (“China Eastern”) issued an announcement stating that on that day the company signed an aircraft purchase agreement with Airbus, deciding to buy 101 A320NEO series aircraft from Airbus.

The announcement disclosed that the above-mentioned aircraft are planned to be delivered to the company in batches from 2028 to 2032. The total list price for the aircraft in this purchase is approximately USD 15.802 billion. Based on the RMB to USD midpoint exchange rate announced by the People’s Bank of China on the day the transaction agreement for this deal was signed (USD 1 to RMB 6.8911), it is approximately RMB 108.893 billion.

A320NEO series aircraft Image courtesy of the Airbus official website

Specifically, 9 aircraft are planned for delivery in 2028, 19 in 2029, 30 in 2030, 27 in 2031, and 16 in 2032.

China Eastern estimates that during the delivery period of the aircraft introduced in this transaction, at least 53 A320 series aircraft will exit due to lease expirations or aircraft age factors. Therefore, the 101 aircraft purchased in this transaction will partially serve to replace and upgrade existing aircraft types.

China Eastern said that after multiple rounds of commercial negotiations, the actual transaction price agreed upon by the company and Airbus is significantly lower than the basic list price, resulting in a relatively favorable discount. The company plans to provide funding for this transaction using funds from its own resources, commercial bank loans, proceeds from issuing bonds, and other financing instruments. The consideration for this transaction will be paid in installments, and it is expected not to have a material impact on the company’s cash flow situation and business operations.

The announcement states that the aircraft introduced in this transaction are narrow-body aircraft from Airbus’s latest generation of new engines and Airbus sharklet winglets. They will further enhance the company’s available capacity per aircraft, reduce fuel consumption and unit operating costs, and help the company’s overall fleet maintain advanced capabilities and become younger, thereby improving market competitiveness. They will also help the company and China’s civil aviation achieve the “dual carbon” goals.

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