China Eastern Airlines has ordered 20 Airbus SAS A230 aircraft as part of a plan to expand its fleet from 72 to more than 100 by 2005, Bloomberg reported. The company, China’s third largest airline, negotiated a price discount of about 25 per cent, taking advantage of a slump in global demand for aircraft. The planes will be powered by engines made by CFM International, a partnership between General Electric of the US and France’s Snecma. After the purchase, around two-thirds of China Eastern’s fleet will be Airbus planes.
China Eastern’s profit tripled in 2001, partly as a result of tax benefits received from moving its operations to Shanghai’s new Pudong International Airport. Its tax rate fell from 33 to 15 per cent due to the government’s incentives policy for carriers moving to Pudong. The company also benefited from a 15 per cent drop in the value of the Japanese yen against the dollar, which cut its debt repayment costs. Sales revenues increased by 8 per cent over the year to Yn12.2bn.