Shanghai Airlines announced that it will merge with China Eastern Airlines, Bloomberg reported. The deal received government approval on June 6 and will give the merged carrier 50% market share in Shanghai. Specific terms of the deal have not yet been released. As part of the merger, the state-owned parent of China Eastern will invest roughly US$1.02 billion of US$1.3 billion in capital injections it has received from Beijing into buying new shares of China Eastern. China Eastern’s parent has not said what it will do with the remainder. Shanghai Airlines also received an injection, of US$146 million, in February. The new deal comes as a result of both carriers’ continued struggles amid slowing travel demand in China.
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