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China Merchants Bank offers 30b yuan in credit to airlines
By Winny Wang |
March 14, 2009, Saturday
|
Print Edition
Print Edition
DOMESTIC carriers will be given a 30-billion-yuan (US$4.39 billion) credit line from China Merchants Bank in the country's latest effort to help the ailing sector survive.
The Civil Aviation Administration of China and the Shenzhen-based lender has formed a strategic cooperation to grant the huge credit line to domestic carriers over five years, the administration said in an online statement dated on Thursday.
The global downturn and waning demand mean overcast skies for the domestic aviation industry, which reported a combined 28-billion-yuan loss last year.
Zhou Chi, chairman of Shanghai Airlines, said yesterday that the carrier still has a chance of making a profit this year if its figures can recover in April and May.
He said that this year will be tough for the carrier, so it will cut salaries and reduce capacity to save costs, but the airline has no plans to lay off employees.
The carrier has cut senior executive salaries by more than 20 percent this year and middle-level managers' wages by 10 percent. Zhou also said that the carrier was in talks with Boeing Co about whether to delay the delivery of a Boeing 787 jet.
Shanghai Airlines has secured a 1-billion-yuan cash injection from its shareholders.
"The injection will replenish our working capital and help us get through the tough period," Zhou said. Referring to a possible merger with China Eastern Airlines, Zhou told reporters that Shanghai Airlines has not been informed about the plan, and the parent companies of the two airlines have not discussed the possibility with them.
Shanghai Airlines said in a preliminary report that its net loss for last year may be double 2007's 435-million-yuan loss.
The Civil Aviation Administration of China and the Shenzhen-based lender has formed a strategic cooperation to grant the huge credit line to domestic carriers over five years, the administration said in an online statement dated on Thursday.
The global downturn and waning demand mean overcast skies for the domestic aviation industry, which reported a combined 28-billion-yuan loss last year.
Zhou Chi, chairman of Shanghai Airlines, said yesterday that the carrier still has a chance of making a profit this year if its figures can recover in April and May.
He said that this year will be tough for the carrier, so it will cut salaries and reduce capacity to save costs, but the airline has no plans to lay off employees.
The carrier has cut senior executive salaries by more than 20 percent this year and middle-level managers' wages by 10 percent. Zhou also said that the carrier was in talks with Boeing Co about whether to delay the delivery of a Boeing 787 jet.
Shanghai Airlines has secured a 1-billion-yuan cash injection from its shareholders.
"The injection will replenish our working capital and help us get through the tough period," Zhou said. Referring to a possible merger with China Eastern Airlines, Zhou told reporters that Shanghai Airlines has not been informed about the plan, and the parent companies of the two airlines have not discussed the possibility with them.
Shanghai Airlines said in a preliminary report that its net loss for last year may be double 2007's 435-million-yuan loss.
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