China Eastern Airlines Corp (CEA) plans to boost aircraft capacity this year, unfazed by the slowdown in regional airline demand. Its plans are in stark contrast to those of another H share, China Southern Airlines, which says it will slash capacity by leasing out excess aircraft. CEA president Li Zhongming yesterday said the airline would add four MD-90 jetliners to its fleet this year and lease a further five Airbus-320s to replace five F-100 jets. It was also applying to the state to replace three Airbus-340 aircraft scheduled for delivery this year and next with 10 Airbus-320s, which were more suitable for domestic short-haul services. 'The company is expanding capacity in accordance with its own operations,' he said. He said the firm differed from China Southern, which had a fleet double that of CEA's, whose business was almost equally divided among domestic, regional and international routes. China Southern operated mainly in the domestic market. However, he said despite the increase in CEA's fleet size, the capacity would only increase slightly. Mr Li refused to predict the trend of domestic air fares amid keen competition. Since the end of March, fares had recovered because of peak season. Last year, CEA suffered a decrease in passenger load factor to 64.2 per cent from 65.5 per cent because of excess capacity. The regional financial crisis and currency depreciations knocked 100 million yuan (about HK$93.06 million) off its Asian revenues last year. But CEA had no plan to close any of its routes in the region, Mr Li said. He said it was less affected by the turmoil in view of the diversified revenues from domestic, regional and international routes, which accounted for 40 per cent, 23 per cent and almost 37 per cent, respectively, last year. He said the asset injection of China General Aviation by its parent - Eastern Air Group - into the listed firm would be completed this year. In the first quarter, hours flown by CEA's fleet rose 20.37 per cent. Cargo carried increased 15.3 per cent and the number of passengers rose 16 per cent, while total traffic was up 20.14 per cent. Mr Li said CEA planned to achieve 9 to 10 per cent traffic growth in the domestic market this year. Deputy chief accountant Xia Yi said CEA's gearing had dropped to 72 per cent compared with 82 per cent before it was listed in Hong Kong last year.