China Eastern Air Holding Company (Group), the mother company of China Eastern Airlines, the country's number two airline by market value, has signed a strategic cooperation agreement with Shanghai Pudong District Government to build Asia's largest aviation city in Zhuqiao town.
The agreement includes the development of an international cargo hub, which will form part of Zhuqiao aviation city.
Local press reports say that China Eastern Group would introduce a series of projects including aircraft equipment design and manufacturing, high-end air logistics, maintenance and staff training. In addition, the airline will also transfer some of its businesses to the district, such as travel services, medical services, in-flight catering and advertising.
In another development, China Eastern said in a statement to the Shanghai Stock Exchange that it plans to acquire 15 Airbus A330s for about US$3.6 billion to meet booming demand for air travel. Airbus is scheduled to deliver seven A330s in 2017 and a further eight in 2018.
Profits keep soaring
China Eastern last week posted a net profit of 3.56 billion yuan for the year's first six months, against a profit of 12 million yuan for the same period last year. Revenue grew 3.9 per cent to 44.31 billion yuan as throughput, measured in revenue-tonne-kilometres, jumped 10.3 per cent - of which passenger traffic surged 12.5 per cent and freight throughput rose 5.3 per cent.
The company plans to add 45 aircraft and retire 24 in the second half, add 72 and retire 26 next year, and add 45 and retire 17 in 2017.
China Eastern's board also approved a proposal to end its participation in low-cost airline Jetstar Hong Kong, which was originally aimed to be the city's fifth airline. It said it will discuss a settlement of three-year-old joint venture with partners Qantas Airways and Shun Tak Holdings, following the ruling by Hong Kong's Air Transport Licensing Authority in June that Jetstar Hong Kong did not qualify as a local carrier.
Nol van Fenema