China Eastern Airlines continues to push for a tie-up with Singapore Airlines despite being rebuff ed by its shareholders over the Singapore carrier’s proposal to take a stake in the Chinese carrier.

China Eastern president and chairman Li Fenghua told China Daily that the company was still keen on the Singaporean carrier becoming a partner.

On the sidelines of the Shanghai municipal committee of the Chinese People’s Political Consultative Conference (CPPCC) meeting, Li said the Shanghai-based airline is continuing its cooperation with Singapore Airlines on a commercial level and the two “arediscussing their partnership”.

The remarks come after China Eastern accused a proposal by China National Aviation Corp (CNAC), the parent of its biggest domestic rival Air China, of counter-bidding for its shares, of being “informal” and “not conformingto legal procedures”.

It is the first time China Eastern has made clear its determination to form astrategic partnership with Singaporean

investors since its proposal to sell a 24 per cent stake to Singapore Airlines and Temasek Holdings, the Singapore government’s investment arm, at HK$3.80 (49 cents) per share was rejected at a shareholders’ meeting on Jan 8 on theback of CNAC’s counter-off er.

“(Our partnership with) Singapore Airlines is sure,” Li told China Daily. “Our cooperation on a business level is still going on, and we are in talks. “The next step is to seek a second chance (for the partnership with Singaporean investors), with support from the State Council and the State-owned Assets Supervision and Administration,” Li said.

He declined to disclose whether Singapore Airlines is willing to make an off er higher than that proposed by the CNAC or when the second shareholders’ meeting is scheduled.

China Eastern, the mainland’s third-largest carrier, needs financial resources and management expertise to enhance its competitiveness.

However, its planned partnership with Singaporean investors – talks have been going on for two years – was rejected by an overwhelming majority of shareholders and raised questions whether State-owned assets were being sold too cheaply.

Li said yesterday he had learned a lesson from the last shareholders’meeting and how to adapt to running abusiness in the commercial market.

“We were too simple-minded and relied too much on regular practices,” he said.

“We thought approval by the authorities would resolve all difficulties. But in the capital market, administrative power does not run through.

“Shareholders don’t trust you. They care only about share prices,” he said.

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