[photopress:airChina_Eastern.jpg,full,alignright]China Eastern Airlines, the nation’s third-largest carrier, said it may lose RMB405 million ($58 million) of sales this year after being ordered to scrap flights that were disrupted by a labor dispute.
The Shanghai-based airline said in a statement to the city’s stock exchange that two routes in the southern Chinese province of Yunnan will be halted May 4. The number of its flights on six Yunnan routes were cut by between two and six daily.
The government took away routes from the carrier after its pilots aborted flights to protest working conditions. This will do nothing to add to their popularity with the management.
The pilots were able to take such cavalier action because the country is facing a shortage of pilots which will only increase.
Yu Jianjun, an analyst at Huatai Securities Co. in Nanjing said, ‘Aggressive fleet expansion is the reason for all these problems. The nation’s civil aviation industry is running at high risk and debts because everyone is regarding market share as first priority.”
China Eastern’s routes in the southern province will be given to four rivals including Air China.
Board Secretary Luo Zhuping said in a Shanghai interview the airline will seek government permission to resume as soon as possible the routes that were taken away after pilots aborted flights to protest working conditions.
The country’s passenger numbers may increase 14% this year, helped by leisure travel and demand for flights to attend the Beijing Olympic Games.
According to the General Administration of Civil Aviation China’s airlines may fly 210 million passengers in 2008.
Source: Bloomberg
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