Air China urges China Eastern to review tie-up plan

HONG KONG (Reuters) - The parent of Chinese flag carrier Air China (601111.SS) urged China Eastern Airlines (600115.SS) on Saturday to review its rejection of a proposed tie-up between the two airlines.

In an advertisement in the South China Morning Post newspaper, China National Aviation Corp (CNAC) said it was still keen to realize the proposed alliance.

"CNAC has been highly sincere in seeking a strategic partnership with China Eastern Airlines," it said.

"CNAC hopes that the board of directors of China Eastern Airlines will seriously review and give full consideration to the proposal and hereby invites China Eastern Airlines to discuss with CNAC various matters in detail," the half page advertisement added.

Last month, China Eastern Airlines formally rejected the proposed tie-up with Air China, pledging to instead continue seeking another strategic investor.

The airline said CNAC hadn't made a sincere or considered proposal that would benefit shareholders.

But CNAC said in its statement that its proposal was based on "careful and prudent" calculations which would "effectively improve the financial position of China Eastern Airlines and the operating results of both parties."

CNAC made no mention of any improved offer in the statement.

CNAC earlier said the proposed strategic partnership with China Eastern would involve a cash injection of $1.9 billion and involve a broad tie-up between the two airlines' operations.

CNAC's approach had helped convince a China Eastern shareholders' meeting to reject the proposed sale for $920 million of a 24 percent stake in China Eastern to Singapore Airlines (SIAL.SI) and Singaporean investment firm Temasek

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(Reporting by James Pomfret, Editing by Peter Blackburn)