Chinese airlines to raise capital

China Eastern Airlines (CEA.NYSE, 600115.SH, 0670.HKG) and China Southern Airlines (ZNH.NYSE, 600029.SH, 1055.HKG) have announced plans to raise capital to invest in new aircraft and repay loans, just months after Air China (601111.SH, 0753.HKG) announced it would issue RMB1.05 billion (US$164.9 million) of Class A shares to its controlling shareholder in order to raise working capital and pay down debt, The Wall Street Journal reported. Chinese airlines have come under pressure from rising fuel costs and slowing economic growth, even as China’s civil aviation administration orders them to expand. China Eastern said Wednesday it plans to sell up to RMB8.8 billion (US$1.38 billion) worth of bonds with maturities of up to 10 years, while China Southern Airlines said Monday that it aims to raise up to RMB2 billion (US$314 million) through a private placement of A-shares with its controlling shareholder, China Southern Air Holding Co.