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December 31, 2009

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Airline group likely to see profit

CHINA Eastern Air Group may achieve its target of "largely reducing losses" this year as its net profit is expected to be 600 million yuan (US$87.85 million), and it set seven key tasks, including a merger with Shanghai Airlines, next year to further enhance its performance.

The group, parent of China Eastern Airlines, is expected to generate 42.4 billion yuan in sales revenue and 600 million yuan in net profit this year, said Liu Shaoyong, general manager of the group.

"However, the company faces tough operations in 2010," said Liu at a staff conference over the weekend.

But if it achieves the profit, it will be a huge improvement for the carrier after its record 14 billion yuan loss last year. It attributes the expected profit to the recovering economy that has boosted air travel demand and also to fuel hedging gains.

For next year, the carrier has emphasized the seven tasks, including completing a merger with rival Shanghai Airlines, serving the 2010 World Expo, enhancing brand image, building an air hub and boosting information technology, as its top priorities.

China Eastern, the country's third-largest carrier, has regulatory approval for the merger which a company official said will be completed in January.

The merger, in which Shanghai Airlines shareholders will exchange one share for 1.3 shares in China Eastern, will help the latter become the country's second-largest carrier by fleet after China Southern Airlines and its share of the aviation market in Shanghai to be more than 50 percent.


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