Airline Finance News - Asia / Pacific

AirGuide Business, Jan 7, 2008

Jan 7, 2008

US DoT rules on China. Final rights for US carriers to start and add China services in 2009 have been awarded by the American Department of Transportation (DOT). US Airways will be allowed to start China flights between Philadelphia and Beijing, while American, Continental and Northwest will add a new daily flight to their existing services. American will start Chicago-Beijing; Continental will begin Newark New York-Shanghai and Northwest, Detroit-Shanghai. All 2009 services must begin on or about, March 25 next year. Further awards will see Delta Air Lines serve Shanghai from Atlanta and United from San Francisco to Guangzhou this spring. The west coast US city has the largest Chinese-American population in the US, while Guangzhou has the third most populated city in China. Daily flights between the two countries are expected to double during the next five years, as ChinaAos economic boom shows no sign of slowing. Jan 3, 2008

Air China

Air China plans China Eastern Airline counteroffer; new CAAC chief sour on foreign investment. The China Eastern Airlines/Singapore Airlines deal appears increasingly less likely to go through, with Air China stating yesterday that it is planning a counteroffer while a change in CAAC leadership signaled that Beijing may be cooling to the stake sale. Li Jiaxiang, president of Air China parent China National Aviation Holding Co., was promoted to head China's aviation ministry on Dec. 28 and is known to be skeptical about foreign investment in Chinese airlines. Jan 4, 2008

Air China

Air China Chairman Resigns For Regulator Post. Air China said chairman Li Jiaxiang had resigned as chairman with immediate effect to take up a senior post with the General Administration of Civil Aviation of China. Kong Dong, Air China's current vice chairman, would serve as the acting chairman until the board elected a new one, the airline added. Industry sources said last week that Li had been appointed chief of China's civil aviation regulator, but it was not immediately known what would happen to his predecessor, Yang Yuanyuan, or who his replacement at Air China would be. The news comes ahead of a vote on January 8 by China Eastern shareholders -- which include the parent of Air China -- on a deal by Singapore Airlines and Temasek to buy a 24 percent stake in China Eastern for about USD$920 million. Jan 3, 2008

Air China

Air China parent pushes China Eastern to raise share price in sale to Singapore Airlines. Air China parent China National Aviation Holding Co. said Monday that China Eastern Airlines needs to renew discussions with Singapore Airlines on the high-profile stake sale, arguing that the HK$3.80 price set for each of the additional shares tailored for Singapore Air is inadequate. It was the second such statement from CNAC, which said on Dec. 26 that it never promised not to vote to veto the deal at a shareholders' conference scheduled for Jan. 8. CNAC currently is China Eastern's largest circulation shareholder with 12.07%. China Eastern President Li Fenghua admitted last week that the carrier is facing significant pressure from Air China, which he called a "troublemaker." But he insisted that the deal has been sealed and that the share price will not change. Air China has said it is interested in partnering with China Eastern through a cross shareholding as well as establishment of a cargo joint venture. But China Eastern MD Cao Jianxiong rejected the possibility, saying the carrier would rather cooperate with Singapore Airlines. Jan 3, 2008

Air China

Air China Plans China Eastern Buy If Singapore Airlines Deal Flops. Air China parent China National Aviation Corporation said on Thursday it will make a counter offer for rival China Eastern if that carrier's shareholders reject a plan to sell a stake to Singapore Airlines. CNAC, which holds a 3.9 percent stake in China Eastern, said it will vote against Singapore Airlines' proposal to buy a 24 percent stake in China's No. 3 airline for USD$920 million. CNAC, whose Air China is the country's biggest airline, has said Singapore Airline's offer of HKD$3.80 per China Eastern share is too low and has demanded sweetened terms. Jan 3, 2008

Air China

Air China shares were marked down on fears it may have to help bankroll a China National Aviation Corporation counter bid, brokers said. Air China also said on Thursday its chairman Li Jiaxiang was standing down to become head of China's civil aviation regulator. Jan 3, 2008

China Eastern Airlines

China Eastern shareholders are due to vote on the Singapore Airlines deal at a meeting in Hong Kong on January 8. China National Aviation Corporation owns 12 percent of China Eastern's Hong Kong-listed shares. Shares in China Eastern fell 11 percent to HKD$7.16 on Thursday as the planned sale of the stake to Singapore Airlines and Singapore state investment agency Temasek came under fire from CNAC. China Eastern said in a statement on Thursday the price agreed with Singapore Airlines was fair, at about six times end-2006 book value. It said CNAC's claim that Singapore Airlines was buying its stake cheaply was not objective. Jan 3, 2008