China Eastern Airlines Corp aims to double occupancy rate in
first and business classes on its long-haul international flights -
one of its main cash cows - following its partnership with
Singapore Airlines.
Currently, the Chinese carrier only fills 30 to 40 percent of seats
in first and business class, leaving its long-haul routes - such as
Shanghai to New York - suffering losses of one million yuan
(US$135,000) or more each journey.
"We are lagging far behind even if we offer discounts for business
class," board secretary Luo Zhuping said yesterday. "Something
clear now is our long-haul flights will become more competitive
with better services, products, and management to be brought in
from the Singapore partner."
Luo said he hoped China Eastern's long-haul business class
occupancy rate could reach 70 to 80 percent. Asked when the target
might be met, he said one year was likely. "Once the long-haul
turns profitable, the firm's earnings should definitely be no
problem.
"Our high-end customers are mainly from Chinatown Street, but now
we need more from Wall Street," Luo joked.
China Eastern signed an agreement last Friday which involved
Singapore Airlines and its parent Temasek Holdings buying a
24-percent stake in the Chinese carrier. The deal, announced in
September, has been deemed as a major inroad by Singapore Airlines
to enter the booming Chinese aviation market, via financial hub
Shanghai, where China Eastern is based.
Before the agreement was signed, the parent of Air China and Hong
Kong's Cathay Pacific Airways had considered and rejected plans to
make a counter-offer.
Air China's parent, which owns about 11 percent of China Eastern's
Hong Kong-traded shares, still has chances to block the deal by
uniting other minority shareholders, analysts have said.
The deal needs approval from two-thirds of minority
shareholders.
(Shanghai Daily November 14, 2007)
