China Eastern may resume Singapore Air talks
31 July 2008
China Eastern Airlines might resume talks on selling a stake to Singapore Airlines after the Beijing Olympics, state media reported. Shares in China Eastern jumped Wednesday after the report came out. "We will discuss this issue after the Olympics, and all things will become clear then," Luo Zhuping, board secretary for China Eastern, was quoted as saying. He said Singapore Airlines could help his airline improve its service and financial status. A Singapore Airlines spokesman said the two airlines were in contact. China Eastern is among the many airlines suffering from high fuel prices. China Daily quoted Luo as saying that the airline's ratio of liabilities to assets is 95%. The company's shareholders rejected an earlier proposal by Singapore Airlines and the Singaporean government investment arm Temasek Holdings to purchase a 24% stake for US$0.49 per share. State-owned China National Aviation Holding Co, the parent company of Beijing's flag carrier Air China, had offered more money. Luo denied recent reports that government regulators were considering merging China Eastern and smaller rival Shanghai Airlines.