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China Eastern Airlines

China Eastern plans to announce membership in an alliance next month


BEIJING — China Eastern Airlines Corp. Chairman Liu Shaoyong said Sunday he expects the company's passenger volume to grow more than 20% in 2010, after the airline carried 44 million passengers in 2009, up 18.3% from the previous year.

The Shanghai-based airline, the only one of China's top three carriers that hasn't yet joined a major airline alliance, also plans to announce its membership in an alliance next month, Mr. Liu told reporters on the sidelines of the National People's Congress. He didn't elaborate.

The airline has said it is in talks with all three major airline alliances—Star Alliance, Oneworld and SkyTeam.

Of China's two other major airlines, Air China Ltd. is a member of Star Alliance and China Southern Airlines Co. is a member of SkyTeam.

China Eastern said in an earlier statement its passenger volume rose 9% in January from a year earlier to 3.5 million.

Passenger volume in China's aviation industry is expected to rise 13% this year to 260 million passengers, the state-run China Daily reported in January, citing a report from the Civil Aviation Administration of China.

China Eastern isn't in talks with Singapore Airlines Ltd. for a strategic investment, Mr. Liu said, though the Chinese airline said in February it is actively seeking a strategic investor.

A deal to sell a 24% stake to SIA's parent company, Temasek Holdings Pte. Ltd., was blocked by Air China two years ago.

In a speech to NPC delegates, Mr. Liu urged the State Council, China's cabinet, to help the development of the civil aviation industry by better coordinating responsibilities between airlines and railway companies, for more efficient use of resources.

Analysts say high-speed rail will hurt Chinese airlines, cutting into demand as railway lines expand.

Mr. Liu also urged the government to speed up reform of China's airspace management to avoid delays and increase freedom in route planning. Currently, about 20% of China's airspace comes under the purview of civil aviation, compared with more than 80% in the U.S., Mr. Liu said. China's military controls the majority of the country's airspace.

China Eastern plans to announce membership in an alliance next month
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