Will Also Lease Back Four 757s

Shanghai Airlines announced Friday it plans to expand its fleet with five new Airbus A321s.

The International Herald Tribune reports the Shanghai-based airline plans to sell four Boeing 757s in its current fleet to aircraft leasing company Aircastle ltd., and then lease them back. The airline will receive a little more than book value on the 757s (about $66 million) from the sale, which Aircastle will then make up on lease charges.

The move -- which the airline says will leverage use of its assets, according to IHT -- was approved by the company's board this week. As ANN reported, Shanghai took delivery of the last 757 assembled in 2004.

Shanghai Airlines will also receive the A321s at a slight discount off list price of $370 million. Delivery of the new planes is expected to start in 2011.

China is expected to see a nine percent increase in air travel in the next year alone, according to industry estimates. The country is forecast to need over 3,000 new jets within 20 years.

FMI: www.airbus.com, www.aircastle.com, www.shanghai-air.com/