China Eastern-Shanghai merger wins shareholder approval

Posted 12/10/2009

China Eastern Airlines' acquisition of Shanghai Airlines was approved by both carriers' shareholders Friday.

CEA Board Secretary Luo Zhuping reiterated Friday that the merger will be completed by year end. The transaction already has been approved by CAAC (ATWOnline, Aug. 31) and all other relevant government authorities except the China Securities Regulatory Commission, which has not yet issued a ruling but is not expected to reject the deal.

CEA is acquiring SAL through a share swap in which each SAL share is exchanged for 1.3 CEA shares. SAL is expected to become a wholly owned subsidiary of CEA but will keep its brand.

Both carriers have started the merger process, laying the groundwork to promote "Express Air Service" denoting the high number of frequencies that will be offered on the 22 routes both operate during their winter and spring schedules.

CEA also is continuing to push forward on internal reform. "We have gone through the most difficult time and overcome the crisis, but we are still in great difficulty as our debt ratio remains high and the international [passenger] market and cargo market have not recovered," Chairman Liu Shaoyong told reporters following Friday's shareholder conference. Liu revealed that CEA will decide which global alliance to join at year end. It is widely speculated that it will join Skyteam, though SAL is a member of Star Alliance.

by Katie Cantle

Originally published 13 Oct 2009 at: http://feeds.atwonline.com/~r/AtwDailyNews/~3/3Fd8HLTb8B8/story.html