Eight months after shareholders voted down the proposed purchase of 24% of China Eastern Airlines by Singapore Airlines and its parent company, China Eastern wants to revive the deal.
SIA and parent Temasek Holdings agreed in September last year to buy a combined 24% of China Eastern in a deal backed by the Chinese carrier's board and state-controlled parent company. Shareholders voted against it in January, however, after rival Air China's parent said it intended to make a better buy-in offer.
China Eastern has said repeatedly that it is not interested in a partnership with Air China or its parent company, however, and no formal talks have taken place between the groups. An informal buy-in bid by Air China's parent was rejected by China Eastern.
China Eastern's board secretary, Luo Zhuping, now says he hopes discussions will be re-started with SIA soon. Official media quoted him as saying the Shanghai-based carrier "would continue discussions regarding the share sale deal with Singapore airlines after the Olympics in August...and all things will become clear then".
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© China Eastern Airlines |
China Eastern is in the weakest financial state of China's "big three" carriers, the others being Air China and China Southern Airlines, and many analysts see its bid to have SIA as an equity partner as a defensive move to prevent it from being acquired by another Chinese carrier.
Reports surfaced recently that government officials were looking at merging China Eastern with another Shanghai-based carrier, Shanghai Airlines, although the two denied that any talks had taken place.
"We have not considered the merger with Shanghai Airlines, and have not talked about this with other domestic carriers," said Luo. "Merging with domestic carriers is just a resource synergy, but our urgent task at the moment is to improve the services by introducing the world's leading management experience."
SIA says it "will explore other means of developing the relationships", and that it continues to be optimistic about the prospects for China's airline industry.
Singapore Airlines was the winner in the Operations category at this year's Airline Strategy Awards: flightglobal.com/siaaward
Source: Airline Business
