On 12 July 2009, China Eastern Airlines Corporation Ltd. (China Eastern) offered Shanghai Airlines Company (Shanghai Airlines) a share swap deal worth approximately RMB9 bn, and announced a detailed merger plan. The company will also raise approximately RMB6.4 bn. The merger of the two entities will create one of China’s largest airline companies with a market share of approximately 50% in Shanghai. Given China Eastern’s consistent losses over the recent period…

On 08 June 2009, news emerged of a merger between China Eastern Airlines Corporation Ltd. (China Eastern) and Shanghai Airlines Company, in a government-backed initiative to improve the competitiveness of its domestic carriers after the companies reported heavy losses in FY 2008. In light of this, and China Eastern's expectations that it will continue to post losses in FY 2009, we believe a merger is…

China Eastern Airlines Corporation Ltd. (CEA) reported a significant decline in its 1Q 09 earnings. Although the target price no longer supports a SELL we are reiterating the rating, given the company’s poor performance and anticipated sluggish demand for air travel in light of current economic conditions, augmented by the possible negative impact of the swine flu outbreak. We will reassess our target price and rating in our next update report....