China Eastern Airlines orders 101 Airbus aircraft, with a total value exceeding 100 billion yuan

Securities Times reporter Zang Xiaosong

On March 25, China Eastern Airlines (600115) signed a purchase agreement with Airbus (hereinafter referred to as “Airbus”) in Shanghai to purchase 101 A320NEO series aircraft from Airbus. The total catalog price of the purchased aircraft is approximately $15.802 billion (about 108.893 billion yuan). China Eastern Airlines stated that after multiple rounds of commercial negotiations, the actual price of the aircraft transaction negotiated with Airbus is significantly lower than the basic catalog price, achieving a favorable discount.

China Eastern Airlines stated that the aircraft being introduced this time is Airbus’s latest generation of narrow-body models, which will help the company supplement its narrow-body capacity, optimize fleet structure, reduce fuel consumption and unit costs, optimize route networks, and enhance passenger flying experience, effectively supporting the company’s strategic layout of “flying farther, flying internationally, and flying to emerging markets,” assisting the company in achieving its “dual carbon” goals.

The total catalog price of the 101 A320NEO series aircraft to be purchased is approximately $15.802 billion (Airbus’s January 2024 catalog price). The aforementioned catalog price includes the fuselage, engines, etc., and is adjusted according to the delivery schedule based on a formula.

“Airbus has granted the company a significant price discount, and the actual price of these aircraft is significantly lower than the aforementioned catalog price. The company confirms that the price discount obtained in this transaction is fair and reasonable, and it is better than the prices received in previous purchases of aircraft from Airbus,” emphasized China Eastern Airlines. The company plans to fund this transaction through its own funds, commercial bank loans, bond issuance, and other financing tools. The transaction price is to be paid in installments and is expected not to have a significant impact on the company’s cash flow and business operations.

The series of aircraft being purchased is scheduled to be delivered to the company in batches from 2028 to 2032, including 9 aircraft planned for delivery in 2028, 19 in 2029, 30 in 2030, 27 in 2031, and 16 in 2032. The company estimates that during the delivery period of the introduced aircraft (2028-2032), at least 53 A320 series aircraft will exit operations due to lease expirations or age factors, so the 101 aircraft being purchased will partially play a role in replacing and updating the existing models.