CHINA Airlines has agreed to lease a Boeing 747-400 from Singapore Airlines (SIA) to replace the jumbo jet that crashed at Kai Tak into Victoria Harbour in November. The Taiwanese flag-carrier said it had sized up the various alternatives and decided it would be better to lease rather than buy a replacement for the US$140 million wrecked jet. An agreement has been signed with SIA to lease the aircraft for two years, with an option to extend the lease for another year. China Airlines spokesman Lodge Lo said insurance compensation had been paid out which meant the airline had the means to buy a replacement aircraft, but he said reasonably soft conditions in the leasing market made this the more attractive alternative. This has come as good news for SIA which has been having growing problems maintaining its fast turnover of aircraft. SIA - which prides itself on its exceptionally young, well-maintained fleet - has been experiencing increasing difficulties in the worldwide aviation slump selling surplus aircraft it has replaced. Because of a lack of ready buyers, it had to start leasing aircraft as a stop-gap until market conditions on the sales market firmed. SIA has three passenger aircraft for lease this year - two B747-200s and one B747-300. With the leasing of the B747-400 to China Airlines, the surplus B747-300 will be taken back into SIA's fleet. The two remaining B747-200s have been leased to Garuda Indonesia for two months from the start of April, for Haj flights to Jeddah. SIA said it was holding discussions with potential candidates to lease or sell its two B747-200s after they returned from Garuda. It is believed SIA is also looking at leasing another two B747-200's to Australia's Ansett Airlines, which is looking to turn international this year with flights to Japan and Hong Kong. Mr Lo did not reveal how much China Airlines received in compensation from insurers following the November accident at Kai Tak. The wrecked remains of the crashed aircraft have been sold to Hong Kong Aircraft Engineering Co (HAECO) to be broken up for scrap once the Civil Aviation Department has completed its accident report. Andrew Herdman, managing director of HAECO, would not reveal how much his company paid for the write-off other than saying it was now worth not more than a few million dollars. International aviation authorities have ruled that much of the jet's air frame be broken up for scrap given that it spent three weeks floating in the sea off the end of the runway. This was to prevent potential hazardous parts re-emerging in the supply chain on aircraft elsewhere in places like Africa or South America as had been the case following other accidents. Mr Herdman said the four engines were total write-offs after being submerged. All undamaged equipment, from flight instruments to toilets, would be assessed, serviced and, where possible, used again. However, Mr Herdman said all parts from the jet would be tagged with their history so buyers would know where they came from. Some parts, like the avionics, were already being removed but were being placed in quarantine until the accident investigation report was completed, which could take a couple of months. HAECO had considered retaining some of the salvaged parts for itself or for Cathay Pacific. HAECO could perhaps reconstruct a flight cabin for pilot training or part of the fuselage for cabin crew training, he said.