China Eastern Airlines Agrees To Buy 20 Boeing 777 Aircraft For US$5.94 Bln - Wall Street Journal

--China Eastern Airlines agrees to buy 20 B777-300ER aircraft from Boeing Co.

--The deal, worth US$5.94 billion, will be delivered from 2014-2018

--The Shanghai-based airline also agrees to sell five Airbus A340-600 aircraft for US$707 million

(Adds background on EU carbon emissions in the 5-8th paragraphs.)

By Fiona Law

Of DOW JONES NEWSWIRES

HONG KONG (Dow Jones)--China Eastern Airlines Corp. (0670.HK) said Monday it has agreed to purchase 20 B777-300ER aircraft from Boeing Co. (BA) for US$5.94 billion.

The Shanghai-based airline said the new aircraft, which will be delivered in stages from 2014 to 2018, will help satisfy the increasing demand on international long-haul routes.

"The purchase of the Boeing aircraft will further strengthen the company's competitiveness in the international civil aviation market and increase its operational capacity in international routes of the company," China Eastern said in a statement.

Meanwhile, the company has agreed to sell five Airbus A340-600 aircraft, in a deal worth CNY4.47 billion (US$707 million), it said in the same statement. The sale will help the airline cut costs.

It wasn't immediately clear whether China Eastern Airlines' decision to buy Boeing aircraft is a political move. But it came amid disputes between European Union and Beijing over aircraft emissions.

China is putting on hold orders already agreed with Airbus but not approved by the country's industry overseers, chief executive of Airbus parent EADS Louis Gallois said earlier.

The EU officials have decided to extend levies on emissions of carbon dioxide to the aviation industry this year. Any airline operating at a European airport must have special credits to offset its carbon-dioxide emissions through a program known as the emissions-trading system, or ETS. Airlines have said the system will cost them billions of dollars.

China Eastern Airlines wasn't immediately available for comment Monday due to a holiday.

-By Fiona Law, Dow Jones Newswires; 852-2802-7002; fiona.law@dowjones.com