ATW Daily News

Chinese government to aid China Southern, China Eastern

Tuesday November 18, 2008

Hit hard by the continuous decline of the domestic market, China Southern Airlines parent China Southern Group and China Eastern Airlines parent China Eastern Group are expecting their requests for government aid to be approved.

An industry source requesting anonymity told ATWOnline that Beijing is expected to inject CNY3 billion ($439 million) into each airline, allowing China Eastern to reduce its net debt ratio to 94.7% from 98% and China Southern to reduce its net debt ratio to 80.5% from 83%.

CZ Chairman Liu Shaoyong had made numerous appeals for up to CNY40 billion in financial aid from Beijing (ATWOnline, Nov. 14). The carrier reported an CNY810 million third-quarter loss. CEA posted a CNY2.33 billion loss in the quarter.

Meantime, Air China parent CNAC also reportedly is seeking government capital. CA reported a CNY1.9 billion loss in the third quarter.

by Katie Cantle

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