SHANGHAI, Feb 11 (Reuters) - Air China (0753.HK) has agreed to buy 20 A320 aircraft from Airbus (EAD.PA) with a list value of $1.63 billion.
The aircraft will be delivered between 2011 to 2014 and will be supplied at a significant discount by Airbus, Air China said in a statement on Thursday to the Shanghai stock exchange.
"The transaction will mainly support hubs-building in Chengdu and expand the fleet capacity of the company in southwestern China while supplementing, to an appropriate extent, the flights in eastern China," according to the statement.
Air China, the country's flagship carrier, said the new aircraft will increase its fleet's tonne-kilometre capacity by 5 percent from its Dec 31 level.
It will finance the acquisition through cash generated from its operations and commercial bank loans.
China Southern Airlines (1055.HK) also said last month it had agreed to buy 20 Airbus A320 aircraft with a list value of $1.54 billion.
Air China and other Chinese carriers are expected to handle a total of 260 million passengers this year, up about 13 percent from 2009, an aviation official was quoted as saying last month.
China's airlines, which also include China Eastern Airlines (0670.HK), returned to profitability in 2009 on government cash aid and a fast recovery of domestic air travel, after losing billions of dollars the year before.
