New | China Eastern close to adding widebody aircraft to fleet

China Eastern Airlines is close to introducing new widebody aircraft to its fleet, possibly the Airbus A350-900 or Boeing B787-9, as its North American routes have turned profitable for the first time, chairman Liu Shaoyong told the South China Morning Post in an exclusive interview.

Speaking on the sidelines of the International Air Transport Association’s annual general meeting in Miami, Liu said the rise of Chinese outbound travel - which exceeded 100 million passengers for the first time last year - is the biggest theme reshaping Chinese airlines’ revenue mix and China Eastern’s strategy.

While mainland airlines have been aggressively expanding their international long-haul businesses, they have struggled to make money on those routes for lack of high-yield passengers to cover the high operating costs. Liu said a combination of strong traffic, lower fuel prices and lower operating cost with the deployment of its new long-range Boeing 777-300ER has put China Eastern’s North American routes - which includes New York, Los Angeles, San Francisco, Hawaii, Vancouver, and Toronto - in the black so far this year.

“We have been flying international long-haul for more than 20 years. There have been profits reported in certain months by certain routes, but for the entire North America market to turn in profits, this is the first time,” he said, adding it came earlier than expected in a plan to make North America a “core profit generator” in three years’ time.

While Liu would not give out numbers for individual markets, China Eastern in April reported net profit of 1.5 billion yuan for the first quarter of 2015 compared with a net loss of 247 million yuan in the same period last year, as all mainland airlines’ financials soared in 2015 on weak oil prices and stable currency rates in spite of China’s slowing economy.

Liu said China Eastern is looking at next generation widebody jets to replenish its fleet after all of its 20 Boeing 777-300ER jumbo jets ordered would have arrived by 2018.