(May 14 )(Bloomberg) -- China Eastern Airlines Corp., the most indebted of China's big three airlines, aims to raise at least 15 billion yuan ($2.1 billion) for new planes and training to help it compete with Air China Ltd. and Cathay Pacific Airways Ltd.

``If we can get more, it'll be even better,'' China Eastern Chairman Li Fenghua said in a May 8 Bloomberg TV interview at the company's Shanghai headquarters.

Li plans to reach his target by reviving the sale of a stake to Singapore Airlines Ltd., by tapping capital markets and through subsidies from the government, which owns part of the carrier. China Eastern's minority shareholders vetoed a tie-up with Singapore Air in January after the parent of Air China pledged to make a higher offer.

``The government won't sit and watch its own company go bankrupt,'' said Jack Xu, an analyst at Sinopac Securities Co. ``China Eastern will have an opportunity to resubmit the Singapore deal this year.'' He rates the carrier ``outperform.''

China Eastern still aims to raise HK$11.3 billion ($1.5 billion) selling shares to Singapore Airlines, Temasek Holdings Pte, the city-state's sovereign wealth fund, and to its own state-controlled parent, China Eastern Air Holding Co.

``There's no change in our plan to tie up with Singapore Airlines,'' Li said.

Spending Plans

China Eastern will spend 80 percent of the 15 billion yuan on aircraft, with most of the rest going toward staff training, Li said. The fundraising will enable the carrier to cut its debt-to-asset ratio to 80 percent from 94 percent as of 2007.

``We're making a lot of effort to lower our debt ratio,'' Li said. Air China, the country's second-biggest carrier, had a ratio of 64 percent at the end of last year, while larger rival China Southern Airlines Co.'s stood at 82 percent.

China Eastern plans to add 17 Airbus SAS and two Boeing Co. planes this year, according to its annual report. It added 20 planes in 2007, expanding its fleet to 223. China Southern added 23 aircraft last year and Air China got 29 planes.

China Eastern aims to boosts passenger numbers 10 percent per year in the long-term, Li said. This year, the carrier expects to fly 43 million travelers, helped by demand from the Beijing Olympics in August. China's total passenger numbers may increase 14 percent to 210 million travelers, according to the General Administration of Civil Aviation.

Skyteam

To help boost international sales, China Eastern intends to join one of the three major global airline alliances. At present, the carrier is leaning toward joining China Southern in Skyteam, Li said.

``We need to balance our existing partnership,'' he added. The carrier will make a decision with a year, he said.

China Southern and China Eastern have already applied to code share on more than 40 mainly domestic routes, China Southern Chairman Liu Shaoyong said in March. The two airlines expect to generate combined gains of about 1 billion yuan a year through cooperation as it will allow them to cross-sell tickets and cut operating costs, he said.

Joining Skyteam would cement these ties and also allow China Eastern access to more than 16,400 daily flights operated globally by members including Air France-KLM Group and Korean Air Lines Co.

Delayed Alliance

The carrier had planned to join an alliance soon after selling shares to Singapore Airlines, said Board Secretary Luo Zhuping. This was delayed after the sale was blocked. Singapore Airlines, like Air China, is a member of the Star Alliance. Cathay Pacific is in oneworld.

China Eastern returned to profit in 2007 after two straight years of losses, as a stronger yuan cut the value of its U.S. dollar-denominated debts. More than 70 percent of China Eastern's debts are U.S. dollar-denominated. On an operating level, the airline broke even for the first time in three years.

The carrier filled 73.6 percent of its available seats in 2007. Passenger numbers rose 11 percent to 39.2 million, while cargo volume climbed 6.7 percent to 939,700 metric tons. This year, freight may jump 14 percent to 1.07 million tons.

(Editor: Jia Fu)