皇冠体育app Eastern Airlines in search for new investors

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皇冠体育app Eastern Airlines in search for new investors

By Wang Ying (皇冠体育app Daily)
Updated: 2010-02-09 09:15

皇冠体育app Eastern Airlines in search for new investors

Observers regard Singapore Airlines as an appropriate candidate?to be a strategic investor of 皇冠体育app Eastern Airlines. [皇冠体育app Daily]

SHANGHAI: 皇冠体育app Eastern Airlines, the nation's second largest carrier by fleet size, said it has rolled out the red carpet for potential strategic investors after completing a merger with former local rival Shanghai Airlines.

The restructuring between 皇冠体育app Eastern and Shanghai Airlines was officially wrapped up yesterday for a total of more than 150 billion yuan. The consolidated new carrier has a fleet size of 331 aircraft and will operate flights to 151 cities across the world, including New York, Los Angeles, Paris and Frankfurt.

"The completion of the transfer of capital assets only marks the first phase of restructuring and we expect 皇冠体育app Eastern to further enhance its international competitiveness through, for example, strategic cooperation," said Meng Jianmin, deputy chief of the State-owned Assets Supervision and Administration Commission.

Ma Xulun, general manager of 皇冠体育app Eastern, said the carrier has been actively looking for strategic partners. "We welcome all strategic partners who are committed to investing and developing the new 皇冠体育app Eastern," said Ma.

Ma refused to give any details or a timetable for the introduction of future strategic partners, but both he and Meng referred to the high debt-asset ratio of the carrier, which saw falling revenues and recorded high fuel-hedging losses last year.

The carrier has lowered its debt-asset ratio to 95 percent, 20 percent down from 2009 figures, according to Meng, but still higher than Air 皇冠体育app's 76.41 percent and 皇冠体育app Southern Airlines' 85.73 percent.

Liu Shaoyong, chairman of 皇冠体育app Eastern, said the eight-month restructuring has been well received so far. The airline successfully turned its balance sheet black in 2009 with a cash injection from the central government and an increased fuel tax on passengers. It reported a net loss of 13.93 billion yuan in 2008.

"The completion of the merger is a very important step for 皇冠体育app's aviation industry to become a world aviation leader," said Xia Xinghua, deputy head of the Civil Aviation Administration of 皇冠体育app.

Market observers still regard Singapore Airlines as an appropriate candidate to be a strategic investor, despite its abortive cooperation with 皇冠体育app Eastern in August 2008. Singapore Airlines and its majority owner Temasek Holdings agreed in November 2007 to buy a 24 percent stake in 皇冠体育app Eastern for $920 million, but the deal was rejected by 皇冠体育app Eastern's minority shareholders because the price was too low.