China Eastern Airlines (CEA) is expected to receive a further CNY2 billion (US$294 million) capital injection from the Chinese government to help the struggling carrier survive. This follows an earlier CNY7 billion hand-out from Beijing at the end of 2008 but did little to relieve its debt burden of CNY83.7 billion as of 31 March which amounted to a debt ratio of 115 per cent. Industry pundits have speculated the bailout money is meant to pave the way for the long-talked about merger with … [Read more...] about China Eastern looks to another hand-out from Beijing
China Eastern Airlines
China Eastern sold/leased-back six freighters
China Eastern Airlines (CEA) has recently announced that it reached agreement in August of 2007 for the sale and lease back of six Boeing MD-11 freighters to the aircraft leasing unit of General Electric (GE), Dow Jones reported. The Shanghai-based carrier said it sold the six wide-body aircraft to GE Commercial Aviation Services Ltd. for US$36 to $46 million each. As part of the transaction, China Eastern agreed to lease the planes back from the purchaser for up to 38 months from the date of … [Read more...] about China Eastern sold/leased-back six freighters
China Eastern: breakeven 2010, profit 2011
China Eastern Airlines is targeting a breakeven 2010 and a profitable 2011, newly appointed Chiarman Liu Shaoyong said this week, adding that the carrier is open to consolidation and a potential merger with Shanghai Airlines. The carrier hopes to offset the impact of heavy losses for 2008 by selling off its stakes in certain units and cutting orders for new planes, the Wall Street Journal reported. Liu Shaoyang, the company chairman, admitted that the chances of turning a profit this year are … [Read more...] about China Eastern: breakeven 2010, profit 2011
More bad news from China carriers
Air China and Shanghai Airlines joined China Southern Airlines and China Eastern Airlines in announcing that they expect to report losses for 2008. Both carriers cited declining market demand along with the impact of May's Sichuan earthquakes, stricter security measures surrounding the Beijing Olympics, the global financial crisis and the mid-year spike in fuel prices, followed by fuel hedge losses. Air China noted that it suffered a US$993.3 million loss resulting from a writedown in the value … [Read more...] about More bad news from China carriers
Air China expects first loss in 8 years
Air China is expecting to post its first annual loss in eight years due to slumping demand and bad bets on fuel prices, state media reported. The company said in a statement filed with the Hong Kong stock exchange on Friday that it lost US$994.5 million on fuel hedging in 2008. Chinese carriers are banned from hedging purchases on fuel used for domestic flights, which in the past made Air China less vulnerable than its competitors to rising fuel prices. But jet-fuel prices have fallen more than … [Read more...] about Air China expects first loss in 8 years
Cathay loses US$980 million on hedging gamble
Cathay Pacific Airways has joined many of its counterparts in reporting huge fuel-hedging losses, plunging the previously profitable Asian carrier into an expected record loss for last year, the South China Morning Post reported. The loss on Cathay's fuel-hedging contracts as of the end of last month amounted to around US$980.1 million, deepening from the $361.1 million loss estimated to have been incurred at the end of October, according to the third profit warning filed by the airline in … [Read more...] about Cathay loses US$980 million on hedging gamble
