Growing passenger and cargo demand brings 2b yuan order for six aircraft China Eastern Airlines Corp will spend two billion yuan buying six medium-range Boeing aircraft to help meet growing domestic passenger and cargo demand. The Shanghai-based carrier said in a stock exchange announcement it had signed a deal with the Chicago-based aircraft maker on Thursday to take delivery of the 737-700 jets from January to August 2006. Company secretary Luo Zhuping said the mainland's No3 carrier by capacity would use the new jets to strengthen its network and replace old aircraft. 'Passenger and cargo volume in China has risen more than 10 per cent annually in the past 10 years. The growth momentum will continue,' Mr Luo said yesterday. China Eastern carried 16.45 million passengers in the first 11 months of the year, a jump of 49 per cent year on year. 'The new aircraft are suitable for short-haul operations. We will use them mainly on domestic routes,' Mr Luo said. The airline's strategy was to develop short-haul operations, including routes to Japan and South Korea, because they were big earners for mainland carriers, he said. The highly competitive international operations are not the focus of expansion at present. The single-aisle aircraft, which can carry up to 149 passengers, will expand China Eastern's capacity by 4.3 per cent. Mr Luo said the company would fund the acquisition with bank borrowings. 'We have credit facilities which have not been used. Most money will be paid after the delivery in 2006,' he said. The board of directors had approved the Boeing purchase in 2000 but the plan only received the government's approval recently. In October, China Eastern agreed to buy 20 new aircraft from Boeing's European competitor, Airbus Industrie. The deal, signed during the visit of French President Jacques Chirac, is the first on the mainland for A330-300 aircraft. The airline will pay US$162.9 million to US$170 million per unit. According to a forecast by Boeing, China will buy aircraft worth US$183 billion over the next 20 years.