China Eastern Airlines has confirmed an order for 20 A320s.
Its commitment is part of a 160-aircraft order placed by the Chinese government in 2007. The order, according to China Eastern Airlines, is valued at less than the catalog price of $ 1.45 billion and will be financed through bank loans that will ‘exert no effect on daily cash flow and operation.’
This is somewhat important. China Eastern has a record-high loss of RMB15.26 billion ($2.23 billion) in 2008 and has received a total of RMB46 billion in credit from domestic banks for its aircraft purchases, as well as a RMB9 billion capital injection from the government.
The airline was profitable in the first quarter although some analysts think this will be very difficult to maintain.
ATW Daily News reports deliveries should take place in 2011-13.
China Eastern Airlines stated the aircraft are expected to ‘meet the increasing domestic market demand in the next few years.’ Liu Shaoyong, chairman of the airlines, has predicted that domestic demand will recover fully this year, with the international market rebounding in 2010. Not everyone is as sanguine for the future.