Shanghai Sees China Eastern Merger Plan Soon

Shanghai Airlines expects a detailed plan for a long-anticipated merger with China Eastern Airlines to emerge next month, a senior executive at the airline said Tuesday.

Shanghai Airlines Chairman Zhou Chi told a shareholders' meeting that the airline would remain an independent entity and retain its brand after becoming a subsidiary of China Eastern, one of China's three major airlines.

Zhou added that the two airlines and the government were still discussing the merger plan.

Shares in the two money-losing carriers, which have been grappling with weak air travel demand as China's economy slowed, were suspended from trading on June 8 as they neared a deal.

The government has been trying to broker a merger since last year, according to sources familiar with the situation, to bolster the position of the two carriers, which hold more than a 50 percent combined share of Shanghai's air passenger market.

Zhou initially told the meeting, in response to questions, that details of the merger were expected to emerge within a month, but later clarified to say within a month of the suspension of the two companies' shares.

Earlier this month, China Eastern Chairman Liu Shaoyong said the two had reached an agreement in principle on major issues for a merger.