China's private airline company East Star Airlines has signed a purchase agreement to buy ten Airbus A320 planes and to rent another ten from GE Commercial Aviation Service. The total cost will reach RMB12 billion.

This is the largest deal ever made by a domestic Chinese airline company. It also marks an end to Chinese private aviation companies' dependence on renting planes.

East Star Air is the first private aviation company in middle China. It is headquartered in Wuhan with a register capital of RMB870 million. It plans to run business on a trial basis starting May 2006. By that time, it will open routes from Wuhan to 10 cities, including Shenzhen, Nanjing, XI'an, Haikou and Hangzhou.

The first three planes are expected to be delivered for use in the second quarter of next year.