China Eastern Airlines Corp., one of the nation’s top three carriers, is raising as much as $2.2 billion from a sale of shares to help fund purchases of aircraft and engines as
the company expands its fleet to meet surging demand for
The state-owned airline proposes to sell as many as 1.62 billion shares on the mainland to investors including the Juneyao Group, collecting
$1.8 billion and a further placement of up to $452 million of stock in Hong Kong, according to a filing to the Shanghai stock exchange.
Chinese carriers have been adding new routes and destinations to serve an aviation market the International Air Transport Association estimates will surpass the US as the world’s biggest by as early as 2022. They had a combined fleet of about 3,200 planes at the end of 2017, compared with a little less than 2,000 five years earlier, according to data from the Civil Aviation Administration of China.
Proceeds from the sale will be used to finance the purchase of 18 planes worth
$1.5 billion, including narrow-body jet such as Boeing Co.’s 737s and Airbus SE’s A320s and wide-body jets such as the 787 Dreamliners and A350s.
The Shanghai-based airline, in which Delta Air Lines has a small stake last year announced buying a 10 percent stake in Air France-KLM Group to build a network of partners to widen its global reach.