Clear skies forecast as China Eastern-SIA alliance is approved
China Eastern Airlines announced that it has finally won approval to sell a stake to Singapore Airlines, in a deal that analysts said could be of huge benefit to both carriers in the long-term.
By Agencies |
SHANGHAI: China Eastern Airlines on Tuesday announced that it has finally won approval to sell a stake to Singapore Airlines, in a deal that analysts said could be of huge benefit to both carriers in the long-term.
China Eastern spokesman Luo Zhuping said that all Chinese authorities have given the green light on the long-awaited tie-up, and that a press conference would be held at Shanghai's Hongqiao airport on Sunday.
Luo did not provide any financial detail ahead of Sunday but China's state-run press has reported that China Eastern intended to sell a two-percent stake to SIA and Singapore's state-linked investment company Temasek Holdings.
China Eastern will become the second of the major domestic carriers to bring in a foreign investor, following Beijing-based Air China's alliance with Hong Kong's Cathay Pacific Airways last year.
Analysts said the deal would provide a much-needed lifeline to loss-making China Eastern and give the Singaporean carrier a key foothold in China, home to one of the world's biggest and fastest growing aviation markets.
"It is a long-term investment (for SIA) but the rewards are potentially very great," said Peter Harbison, an analyst with the Center for Asia Pacific Aviation, a Sydney-based consulting firm.
Harbison said SIA and Temasek were likely to have one or two seats on the board, meaning they would not have a major role in decision making.
China Eastern spokesman Luo Zhuping said that all Chinese authorities have given the green light on the long-awaited tie-up, and that a press conference would be held at Shanghai's Hongqiao airport on Sunday.
Luo did not provide any financial detail ahead of Sunday but China's state-run press has reported that China Eastern intended to sell a two-percent stake to SIA and Singapore's state-linked investment company Temasek Holdings.
China Eastern will become the second of the major domestic carriers to bring in a foreign investor, following Beijing-based Air China's alliance with Hong Kong's Cathay Pacific Airways last year.
Analysts said the deal would provide a much-needed lifeline to loss-making China Eastern and give the Singaporean carrier a key foothold in China, home to one of the world's biggest and fastest growing aviation markets.
"It is a long-term investment (for SIA) but the rewards are potentially very great," said Peter Harbison, an analyst with the Center for Asia Pacific Aviation, a Sydney-based consulting firm.
ADVERTISEMENT
Harbison said SIA and Temasek were likely to have one or two seats on the board, meaning they would not have a major role in decision making.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
