China Eastern Airlines plans to raise 15 billion yuan ($2.2 billion) through nonpublic issuance of shares to purchase 38 new aircraft and replenish liquidity amid the recent resurgence of local COVID-19 cases.

Shanghai-based China Eastern Airlines said its parent and controlling shareholder, China Eastern Group, plans to subscribe no less than 5 billion yuan in shares. Among the total funds raised, it plans to use 10.5 billion yuan to purchase new aircraft, and 4.5 billion yuan for cash flow purposes, the carrier said in a statement on Tuesday.

The airline intends to buy four domestically developed single-aisle C919 passenger jets and 24 ARJ21-700 aircraft-the first domestically made regional passenger jet. A C919 airliner and an ARJ21-700 jet cost $99 million and $38 million, respectively, according to China Eastern.

In addition, China Eastern plans to buy six wide-body Airbus A350-900 and four wide-body Boeing B787-9 passenger aircraft, each costing about $300 million, according to catalog prices released by the manufacturers.

China Eastern will spend $4.38 billion in total to purchase the 38 aircraft, and the new group of aircraft is expected to be delivered from this year to 2024, the company said. Based on its fleet operation data of the past three years, the new batch of aircraft is expected to help bring in additional annual revenues of 3.97 billion yuan, it added.

"The catalog price of domestically developed jets will be slightly lower than similar types of jets manufactured by Boeing and Airbus. With discounts, the transaction prices are usually lower than catalog prices," said Lin Zhijie, an aviation industry analyst and a columnist at Carnoc, a major civil aviation website in China.

"Besides, Chinese carriers don't have to pay import tariffs when buying domestically built aircraft, and this serves as an important advantage for domestically built aircraft to expand their market and sales in the early stages of operation," Lin said.

China Eastern said the private placement will provide solid guarantees for its business development by improving transportation capacity, capital structure and financial stability. It will also firmly support China's national strategy to develop the industry of domestically built large-scale passenger jets.

By the end of 2021, China Eastern operated 758 passenger jets, with the average age of the jets being 7.7 years, it said.

In March 2021, China Eastern signed a purchase contract with Commercial Aircraft Corp of China, the manufacturer of the C919 and ARJ21, and it officially became the first customer to purchase the first five C919 passenger jets. So far, the C919 has received 815 orders from 28 Chinese and overseas customers.

The ongoing pandemic and rising fuel prices have hampered growth of the global aviation sector, and a number of Chinese airlines have suffered losses for two consecutive years. Alleviating financial pressure through refinancing has become one of the major ways for airlines to survive in this difficult time, analysts said.