China Eastern Airlines 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 still slim. The airline’s target is to "substantially stem losses" in 2009 with a view to returning to profitability within three years. China Eastern will sell part of its 40% stake in cargo joint venture Joy Airlines to Aviation Industry Corp, its partner in the venture. The Yunnan provincial government may sink cash into China Eastern’s wholly-owned Yunnan unit. Although nearly 30 aircraft are scheduled for delivery this year under existing contracts with Boeing and Airbus, the airline wants to limit deliveries to 13. Beijing injected US$1.02 billion into China Eastern in December as the full extent of the company’s troubles became clear.
For more on the challenges facing China’s privately controlled airlines, read this article from our February issue.
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