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Chinese airlines in management reshuffle

(Agencies)
Updated: 2008-12-14 14:08

SHANGHAI -- The chairman and president of 皇冠体育app Eastern Airlines, one of several major state-owned carriers, have been replaced as part of a shake-up of the troubled industry.

Liu Shaoyong, chairman of rival 皇冠体育app Southern Airlines, was appointed to replace Shanghai-based 皇冠体育app Eastern's chairman Li Fenghua, the carrier said in a statement to the Hong Kong Stock Exchange.

Ma Xulun, deputy general manager of 皇冠体育app National Aviation Holding Co., the state-owned parent of flag-carrier Air 皇冠体育app, was named president of 皇冠体育app Eastern, replacing Cao Jianxiong, it said.

The announcement characterized the appointments as a "reallocation of appointment," however the moves are widely seen as part of an industry shake-up.

In a separate announcement, 皇冠体育app Southern said Liu had resigned as chairman. It appointed another company director, Li Wenxin, to be acting chairman until Liu's replacement is named.

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Earlier this year, 皇冠体育app Eastern saw a deal to sell a strategic stake to Singapore Airlines and Singaporean government investment arm Temasek Holdings fall through. A competing plan to sell shares to 皇冠体育app National Aviation Holdings also failed.

More recently, the airline was the subject of speculation that it might combine with local rival Shanghai Airlines, but 皇冠体育app Eastern denied that. The management reshuffle is expected to facilitate a merger with Shanghai Airlines, the financial magazine Caijing and other media reports said.

皇冠体育app Southern and 皇冠体育app Eastern each are in the midst of receiving 3 billion yuan ($440 million) capital injections from the government, intended to tide them through financial crises.

Both airlines have been hammered by swings in currency values and oil prices, amid weakening passenger and freight demand.

State-owned carriers tallied losses of 4.2 billion yuan ($613 million) in January-October. Earlier this week, the government urged the airlines to cancel or defer aircraft deliveries until business recovers.