China Eastern Airlines is in the process of planning a "material restructuring" of the company, and is looking at ways to lower its gearing ratio.
"[The company is] in the course of planning matters in connection with the material restructuring to the company and proposals for further lowering the gearing ratio of the company, and will consult and discuss the relevant policies and proposals with the relevant departments," the airline says in a statement to the Hong Kong Stock Exchange,
Shares of China Eastern and Shanghai Airlines remained suspended on the Hong Kong and Shanghai stock exchanges amid reports that the carriers were in talks about a merger. China's official news agency Xinhua, quoting a China Eastern spokesman, says that the "restructuring procedures" related to a merger began on 8 June.
Both carriers have received bail-out money to reduce their debt from the government, which is keen to see consolidation in the sector amid rising costs and increasing losses.
Source: Air Transport Intelligence news
