China Eastern To Sell Two Aircraft To Bolster Cash

China Eastern Airlines said on Monday it would sell two aircraft and lease them back to improve cash flow.

China Eastern has signed sales and leasing contracts with Bank of Communications Finance Leasing for two Airbus A340 jets, the carrier said in a statement to the Shanghai Stock Exchange.

China Eastern will sell the two planes for around their combined book value of CNY590 million yuan (USD$86 million), and will pay about CNY17 million each quarter to lease them back over the next five years.

China Eastern said last month that it may consider scrapping its previous order for nine Boeing 787s if the international travel market remained sluggish.

The Shanghai-based company, which already canceled leasing contracts for seven Boeing 737s, has said it may return to the black this year due to a pick-up in the domestic air travel market.