China Eastern Airlines takes measures for crisis

China Eastern Airlines is trying to stem further losses by cutting costs and coping with the effects of the financial crisis. The company posted significant losses last year.

Liu Shaoyong was appointed as the new chairman of China Eastern Airlines. He said due to many difficulties during the global financial crisis, the airline posted significant losses in 2008.

ChinaEasternAirlinesistryingtostemfurtherlossesby
cuttingcostsandcopingwiththeeffectsofthefinancial
crisis.

Liu Shaoyong, chairman of China Eastern Airlines, says, "the airline posted an asset-liability ratio of over 100 percent in 2008. Its asset was less than its liability."

China Eastern said it will take major moves to reshuffle the company. 256 measures are being formulated to stem losses and cut costs. It will also delay several investment plans. It will take the delivery of only 13 new aircraft this year, less than half of the 29 originally planned.

Meanwhile, the government is injecting 7 billion yuan into China Eastern, up from 3 billion originally planned. The Bank of Communications and Shanghai Pudong Development will each grant 10 billion yuan loans to the airline.

Ma Xulun, president of China Eastern Airlines, says, "six unprofitable branches have been closed. We want to focus our resources on the profitable ones. In addition, we will take firm measures to cut all costs by 15 percent."

The airline is also seeking to optimize its routing. It will focus on routes to Shanghai, Xi'an and Kunming. Domestic passengers are expected to rise by 10 percent in 2009, so China Eastern will more focus on domestic flights and reduce flights on international, long-haul routes.

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