China Eastern, China Southern Sign Deal
SHANGHAI(AP)- China Eastern Airlines Corp. has signed an agreement to cooperate with rival carrier China Southern Airlines Co. on ground handling and operations, though the deal does not involve any equity investments, reports said Wednesday.
Shanghai-based China Eastern's public relations office confirmed the two airlines had signed an agreement but would not give any details, saying the two carriers were still preparing an announcement.
The state-run newspaper Shanghai Securities News and other newspapers said Wednesday that the cooperation involved marketing and aircraft purchases as well as ground services.
The reports cited airline executives as saying the deal was unrelated to a proposal by the parent company of China's flag carrier, Air China Ltd., to pay US$1.9 billion (euro1.3 billion) for a 30 percent stake in China Eastern, the subject of an unusually public takeover battle.
China Eastern has rebuffed the plan by Air China's parent, China National Aviation Corp. Group, or CNAC, for a strategic alliance, saying the plan is aimed at eliminating competition by taking it over.
China Eastern has been seeking a strategic investor to help replenish its capital and improve its competitiveness.
Earlier this month, CNAC helped scuttle a bid by Singapore Airlines and its parent, the government investment agency Temasek Holdings Ltd., to buy a 24 percent stake in China Eastern by promising shareholders a higher price.
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