[photopress:singaporeairlinesg.707.jpg,full,alignright]China Eastern Airlines, the nation’s third-largest carrier, has said talks on selling a stake to investors, possibly including Singapore Airlines, are continuing.
The Shanghai-based airline said a ‘concrete’ agreement has not yet been reached and its shares will remain suspended until a further announcement is published.
A deal is essential and probably inevitable. China Eastern was the nation’s only listed carrier to make a loss last year. It needs to reduce debt and fend off competition from Cathay Pacific Airways and Air China. SIA could help it do that.
And the deal would give Singapore Airlines, Asia’s most profitable carrier, more access to a market forecast to grow fivefold by 2025.
Singapore Airlines may pay as much as $930 million for a stake in China Eastern to expand the carrier’s reach. It would be a bargain for both sides.
Source: Shanghai Daily