UPDATE 1-China Eastern group may get 2 bln yuan aid -paper

Mon Mar 9, 2009 11:23pm EDT

Related Topics

(Adds company official's denial in para 2; background)

SHANGHAI, March 10 (Reuters) - The parent of China Eastern Airlines (0670.HK) (600115.SS) is likely to receive a further capital injection of 2 billion yuan ($292 million) from the government, official media quoted its deputy general manager as saying.

Another official at the parent group, however, rejected the report. China Eastern Air Holding Co Vice President Liu Jiangbo told Reuters on Tuesday that the airline had not received additional government aid and denied media reports on the matter.

The official Shanghai Securities News on Tuesday quoted China Eastern Air Holding deputy general manager Li Jun as saying that the injection, which would bring total government aid to 9 billion yuan, still required approval from the authorities.

It also quoted Luo Zhuping, the listed company's board secretary, as saying there was no timetable for receiving additional aid.

After years of robust growth, China's airlines were hit hard last year by a slump in passenger traffic due to the slowing economy, while volatile fuel prices also hammered profits.

China's three big carriers, which also include China Southern Airlines (600029.SS) (1055.HK) and Air China (601111.SS) (0753.HK), have all warned of losses for 2008.

The China Southern Airlines group has received 3 billion yuan in aid from the government, while Air China Chairman Kong Dong said last week that his airline had also asked the government for a cash injection of at least 3 billion yuan [ID:nPEK304767].

Liu Shaoyong, China Eastern's chairman, said last month that domestic air traffic would remain soft in the first half of this year but would start to see some growth in the second half, while adding that the carrier hoped to receive additional government aid. [ID:nSHA358314] ($1=6.839 Yuan) (Reporting by Rujun Shen, Bella Zeng and Fang Yan; Editing by Edmund Klamann)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Track China's Leaders