The parent company of China Eastern Airlines has received another cash injection from the government, the Wall Street Journal reported. The US$293 million bailout for China Eastern Air Holding, which owns 60% of the airline, comes on top of earlier financial assistance totaling more than US$1 billion. Liu Jiangbo, a vice president of the group, said the funds will be used to ease ongoing operational difficulties. Shanghai-based China Eastern saw its first-quarter net income fall by 81% year-on-year to US$5.85 million as a result of weak air travel demand. The company posted a net loss of US$2 billion in 2008, largely due to bad bets on fuel-price hedging. First-quarter losses from the settlement of fuel-hedging contracts came to around US$133 million. Kelvin Lau of Daiwa Securities said it would be difficult for China Eastern to break even this year because of weak travel demand, smaller cargo volumes, and price-cut led competition.
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