China Eastern Airlines looks set to get more financial aid from the Chinese Government.
The cash-strapped Shanghai-based carrier announced earlier this month that it was getting a 3 billion yuan ($437 million) cash injection from the Government through its unlisted state-owned parent company. It said at the time that it would be selling new shares to its parent, which would increase its stake to 68.2% from 59.7%.
Since then there have been reports in China that China Eastern may seek more aid and the airline says now in a stock exchange filing that its parent company "intends to make material adjustments" to the previously announced share purchase plan. Its shares have been suspended from trading on the Shanghai Stock Exchange until 30 December.
State-run media reports say China Eastern may get a 6 billion yuan cash injection, or twice as much aid as originally promised.
China Eastern, like most Chinese carriers, has been struggling this year as costs have risen and demand has fallen. It is currently being prepared for a possible merger with smaller Shanghai Airlines.
Shanghai Airlines is also seeking financial aid from the Government. Like China Eastern, China Southern Airlines and Hainan Airlines have already been promised aid packages.
Source: Air Transport Intelligence news
