China Eastern & Shanghai Airlines to Merge

[ginkoka]

SHANGHAI - CHINESE state media have confirmed plans to merge China Eastern Airlines and Shanghai Airlines, creating an aviation company with a dominant position in domestic hub Shanghai.
'Starting June 8, China Eastern and Shanghai Airlines officially began their restructuring procedures,' said Liu Jiangbo, a China Eastern spokesman, according to Xinhua news agency on late Monday.

He declined to provide any further details, according to Xinhua.

Shares in China Eastern Airlines and Shanghai Airlines were suspended Monday amid media reports that the government had ordered the two ailing carriers to merge. They remained suspended Tuesday.

China Eastern said in a statement to the Hong Kong Stock Exchange that it was 'in the course of planning matters in connection with the material restructuring relating to the company,' but gave no further information.

Xinhua cited unnamed analysts as saying the merger would give the new group a 50 per cent market share in Shanghai, the headquarters for the two carriers.

This would help the combined carrier to become more competitive over its major rivals, Air China and China Southern Airlines, according to Xinhua.

Like many carriers, both China Eastern and Shanghai Airlines reported losses last year and were already facing troubles before the worst repercussions of the global financial crisis hit China's economy. -- AFP, AP

[GoldenPigeon]

SHANGHAI - CHINESE state media have confirmed plans to merge China Eastern Airlines and Shanghai Airlines, creating an aviation company with a dominant position in domestic hub Shanghai.
'Starting June 8, China Eastern and Shanghai Airlines officially began their restructuring procedures,' said Liu Jiangbo, a China Eastern spokesman, according to Xinhua news agency on late Monday.

He declined to provide any further details, according to Xinhua.

Shares in China Eastern Airlines and Shanghai Airlines were suspended Monday amid media reports that the government had ordered the two ailing carriers to merge. They remained suspended Tuesday.

China Eastern said in a statement to the Hong Kong Stock Exchange that it was 'in the course of planning matters in connection with the material restructuring relating to the company,' but gave no further information.

Xinhua cited unnamed analysts as saying the merger would give the new group a 50 per cent market share in Shanghai, the headquarters for the two carriers.

This would help the combined carrier to become more competitive over its major rivals, Air China and China Southern Airlines, according to Xinhua.

Like many carriers, both China Eastern and Shanghai Airlines reported losses last year and were already facing troubles before the worst repercussions of the global financial crisis hit China's economy. -- AFP, AP

They should be merge in the first place.
cus MU and shanghai airlines originate from the same country.

[9V-JKL]

I have a few questions: What would the merged airlines be called? Does this mean MU will become a *A member? or the new entity

[khellek]

I have a few questions: What would the merged airlines be called? Does this mean MU will become a *A member? or the new entity

I guess the new entity will be part of *A . Nevertheless, it should be a great news.

[Kiwi]

They should be merge in the first place.
cus MU and shanghai airlines originate from the same country.

I don't follow your logic. Should USA have just one super-sized airline?

[huaiwei]

This must be real bad news for Air China....its hopes of gaining a significant foothold in the Chinese economic capital just evaporated.

[Megatop]

China Eastern sets up merger task force

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[sqdazz]

The way I understand it, Shanghai airlines will be removed from Star Alliance. The new company will have to either re-apply to Star, or another alliance, possibly likely to be SkyTeam

[huaiwei]

This seems to be the first case in which an alliance member gets merged into another company which is a non-member. I wonder if this still involved having to pay penalty charges?

[Kiwi]

This seems to be the first case in which an alliance member gets merged into another company which is a non-member. I wonder if this still involved having to pay penalty charges?

No it isn't - Canadian Pacific was a member of Oneworld when Air Canada (Star Alliance) took it over.

The matter was also discussed when Qantas tried buying Air New Zealand a few years ago. At the time it was mentioned Air NZ would have a significant penalty payment due to leave *A.

[huaiwei]

No it isn't - Canadian Pacific was a member of Oneworld when Air Canada (Star Alliance) took it over.

Oh yes I forgot all about that! Apologies!

[Megatop]

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