China Eastern Airlines is selling 24 spare aircraft engines for $700 million, but plans to lease some of them back at $5.06 million per month, filling its coffers with cash while eliminating direct depreciation expenses. 'Selling some of our fixed assets will help our cash position,' company secretary Luo Zhuping said yesterday. 'The cash can be used for operating purposes or buying other equipment.' According to a company announcement filed with the Hong Kong stock exchange yesterday, China Eastern will show a revenue infusion of $700 million, but an exceptional net gain of just $3.7 million. 'The impact of such engines' depreciation on the company's financial position would, as the directors anticipate, thereby be eliminated and would then not be reflected in the company's accounts,' the company said. However, leasing rates incorporated depreciation expenses - as well as a profit for the leasing company, analysts said. 'There should be a net expense on the profit and loss account at the end of the year,' said Ashley Cheung of South China Research. 'But for a company with heavy debt, it's always good to have more cash on hand.' Mr Cheung also said the airline planned to lease only 17 aircraft engines, not 24, so the leasing expenses would be offset by the savings in depreciation costs. He expects China Eastern to offload some of its debt burden slowly this year with cash flow brought by strong traffic shown in the first quarter. 'Capital expenditure should be [peaking] this year. I don't think there will be any bulk aircraft purchases in the short run,' Mr Cheung said, estimating the airline would earn 400 million yuan this year. China Eastern shares closed 1.96 per cent higher at $1.55 yesterday, after trading was suspended on Monday and Tuesday.