China Eastern Expects Recovery In Second Half

February 3, 2009

China's airline market is expected to remain soft in the first half of the year but there will be signs of recovery in the second half, China Eastern Airlines' chairman said on Tuesday.

Liu Shaoyong, chairman of China Eastern, said the airline aimed to cut its losses significantly this year.

He was speaking to reporters on the sidelines of a shareholders' meeting.

After years of robust growth, China's airlines are facing strong headwinds from falling passenger demand, intensifying competition and more cost pressures as the economy slows from the impact of the global financial crisis.

China Eastern said last month it expected to report a "significant" loss for 2008 because of slumping traffic demand and higher fuel prices during much of the year.

The government was also discussing the possibility of brokering a merger of Shanghai-based China Eastern and its smaller rival Shanghai Airlines to create a dominant player in China's financial hub, sources familiar with the matter had said.

But Liu said China Eastern and Shanghai Airlines had never held talks regarding equity ties.