China Eastern Airlines is looking closer at bringing in a foreign airline as a minority shareholder.

The Shanghai-based carrier has for some time been in talks with potential investors in the hope that it can forge a commercial alliance with a foreign airline group. Last year Singapore Airlines was identified as a possible buyer and while China Eastern confirms it is still in talks with SIA, it reveals that negotiations are also taking place with other groups.

"To extend opportunities for commercial collaboration and enhance the company's competitiveness, the company has been approached by and is negotiating for collaboration with a number of potential strategic investors, including Singapore Airlines, with a view to introduce strategic investors at an appropriate time," it says.

China Eastern is the only one of China's top three airline groups not to have brought in a foreign investor as a partner or committed to joining a multi­lateral alliance. Analysts say it needs to sign a partner from abroad or risk being overtaken by fast-growing airline groups, such as Hainan Airlines and Shanghai Airlines.

Flag carrier Air China has committed to joining the Star Alliance and has links with Hong Kong's Cathay Pacific Airways, despite the fact that Cathay is a founding member of oneworld. Shanghai Airlines also plans to join Star.

Guangzhou-based China Southern has committed to joining SkyTeam and expects to take up membership later this year. Meanwhile, it is already discussing a deal with SkyTeam founder Air France. It says it "has entered negotiations with Air France in relation to a proposed joint venture in the cargo business", but it is not revealing details.

Many Chinese airlines have been seeking partners outside the mainland to grow their cargo operations. Air China has been in talks with Cathay to establish a joint-venture cargo airline in Shanghai, while Shenzhen Airlines last year launched Jade Cargo International with Lufthansa Cargo and a German bank.


Source: Airline Business