(Bloomberg, Oct 31, 2006) Shanghai Electric Group Co., China's largest maker of equipment for coal-fired power plants, said it may buy 30 civil aircraft to develop a plane leasing business in the country.

SE Leasing Co. will enter into a memorandum of understanding with AVIC I Commercial Aircraft Co. today, the company said in a statement published in Hong Kong newspapers. The company did not say which types of plane it was considering or how much it would pay for them.

Air China Ltd., China Southern Airline Co. and other carriers in the country are expanding their fleets as economic growth fuel travel demand. The country's commercial aircraft fleet will probably more than triple in size to 3,900 planes by 2025 from 1,030 last year, according to Boeing Co.

China Aviation Industry Corp. I, the country's biggest aircraft maker, is designing the ARJ21, a 70-seat to 90-seat regional jet. The aircraft is due to make its first flight in 2008, a year behind schedule.

AVIC I has 41 orders for the plane from Chinese carriers including Hainan Airlines Co. and Shanghai Airlines Co. Deliveries are due to begin in 2009. The company hasn't signed up any new customers for the plane in more than a year

Shanghai Electric doesn't expect to receive its first aircraft or to commit itself to any major payment obligations over the next three years, it said in the statement.

Source:Bloomberg