[photopress:air_china_eastern_1_2_3.jpg,full,alignright]According to the Wall Street Journal China Eastern Airlines, the least solvent of China’s three major state-owned carriers, plans to take out US$337 million in new loans to pay for additional aircraft for its fleet. Which seems likely as it is massively extending its fleet.
It then goes on that China Eastern’s financial difficulties have continued as strategic investment bids from both Singapore Airlines and Air China parent China National Aviation Holding Co have stalled.
In February the Shanghai-based carrier reportedly missed debt payments totaling US$535 million, according to a person familiar with the situation.
It depends how familiar that person is.
China Eastern Airline officially reports it netted a $83.71 million (RMB586 million) profit in 2007. So missing debt payments, on the face of it, seems unlikely.
True, this is after posting a $0.43 million (RMB2.992 billion) loss in 2006,
The Shanghai Securities Journal reported the airline’s passenger revenue from domestic (excluding Hong Kong) grew 19% year-on-year to $3.42 billion (RMB23.908 billion), while international passenger revenues grew 20% to $1.76 billion (RMB12.308 billion).
Revenues from its routes to and from Hong Kong fell 13% to $0.34 billion (RMB2.355 billion), due largely to increasing competition for the lucrative market.
Cargo accounted for the remainder of revenues.
Fuel costs surged 11.69% year-on-year to $2.16 billion (RMB15.117 billion), accounting for 40.9% of operating costs. The company has forecast that it will carry 42.95 million passengers and 1.07 million tons of cargo this year. It will also buy eight A320 aircraft, five A321s, one A330-200, three A330-300s, one B737-700 and one B737-800.
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Source: China Perpective