The saga over the future ownership of China Eastern Airlines is continuing, with the carrier rejecting a proposed partnership with the parent of Air China and saying it still wants Singapore Airlines to take a stake.
Shanghai-based China Eastern's minority shareholders rejected a proposed buy-in by SIA in early January, after Beijing-based Air China's parent China National Aviation said it would make a better offer.
CNAC then wrote to China Eastern in late January with a partnership proposal but weeks of silence followed. Now, China Eastern says it "will not give further consideration to the CNAC proposal", which some industry observers say could lead to the government stepping in to address the standoff.
China Eastern has little trust in CNAC and fears a takeover by Air China. It said in a stock exchange filing at the end of February formally rejecting a tie-up with its rival: "The whole process in which CNAC made its proposal to the company, and the mode of communication adopted by CNAC, have failed to demonstrate to the company that CNAC has sincere intentions to co-operate with the company."
It added: "In the absence of sincerity and planning on the part of CNAC and mutual trust between CNAC and the company, it would be difficult to establish the foundation of co-operation between the two companies, and accordingly, it would also be difficult for the synergy from such co-operation as described in the CNAC proposal to materialise."
Soon after China Eastern issued its statement, CNAC placed advertisements in newspapers saying it hopes China Eastern will reconsider. It insists it has been "highly sincere in seeking a strategic partnership". For its part, SIA says it too hopes its proposed partnership with China Eastern can be revived.
Source: Airline Business
