Boeing Co. reached an agreement to sell 20 long-range 777 jets, the planemaker’s most-profitable model, to China Eastern Airlines Corp. in a deal with a list value of about $6 billion.
China Eastern’s board approved the purchase along with the sale of five Airbus SAS A340 four-engine planes, according to a filing today with the Hong Kong Stock Exchange. Both transactions are subject to ratification by shareholders, said China Eastern, the country’s second-biggest airline.
Chinese airlines have become large customers for Boeing and Airbus as the nation’s economic growth spurs travel demand. The country will probably order 5,000 planes in the 20 years ending 2030, according to a forecast from Chicago-based Boeing.
The 777 deal requires approval from the Chinese government, and the planemaker won’t post it as an order until regulators act, said Miles Kotay, a Boeing spokesman. China Eastern didn’t release terms on the acquisition of the 20 twin-engine planes, and airlines typically buy at a discount to list prices.
Boeing rose 0.4 percent to $77.27 at 4 p.m. in New York trading. The shares have advanced 5.3 percent this year, trailing a 12 percent gain in the Standard & Poor’s 500 Index.
A340 Production Ended
China Eastern’s fleet number 377 planes at the end of 2011, split mostly between Boeing and Airbus jets, according to the carrier’s annual report.
The airline is planning to sell the five A340s after Airbus said in November it ended production of the model. The aircraft, which started service in 1993, was the shortest-lived program for the world’s largest maker of commercial aircraft as customers preferred Boeing’s twin-engine 777.
Rising fuel prices have reduced the attractiveness of four-engine aircraft, such as the A340 and Boeing’s 747 jumbo jets.
The twin-aisle 777 carries 400 passengers in a typical two-class setup and can seat as many as 440, Boeing said on its website, and has the range to nonstop routes such as London to Los Angeles. Last year’s net orders for the 777 totaled 200, up from 76 in 2010 and the most since at least 2003.
The 777 entered service in 1995, and was the company’s most advanced aircraft until last year’s commercial debut of the 787 Dreamliner. The 777-300ER variant has become the most popular type and is powered solely by General Electric Co.’s GE90 engines.
Boeing’s biggest customers, including Emirates Airline and British Airways Plc, are pushing the planemaker to announce a successor to the 777-300 as they plan for the replacement of older planes by the end of this decade.