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Consolidation in the Chinese aviation market: China Eastern/Shanghai Airlines merger plan announced


China Eastern Airlines and Shanghai Airlines formally entered into an Absorption Agreement on 10-Jul-09, under which the two carriers will merge through a share swap. Under the agreement, Shanghai Airlines becomes a wholly-owned subsidiary of China Eastern, while retaining its brand and independent operations. [1732 words]

Unlock the following content in this report:


  • Market reacts positively to the news, but will “absorption” really help?
  • More subsidy still needed
  • Details of the merger plan
  • Will the hoped-for synergies pull the two loss-makers back to profit?
  • Cost cutting a key benefit of merger, but key opportunities to be lost

Graphs and data:

  • China domestic capacity (seats) share: Jul-2009
  • China Eastern and Shanghai Airlines Share Price Index: Jan-2009 to Jul-2009
  •  China Eastern/Shanghai Airlines merger: Salient Features
  • China Eastern shareholding structure prior to subscription 
  • China Eastern shareholding structure after completion of subscription
  • China Eastern anticipated shareholding structure after completion of subscription and the full implementation of the Absorption Proposal
  • Select Chinese carriers’ key financial results: Three months ended 31-Mar-09
  • Shanghai Pudong and Shanghai Hongqiao combined capacity (seats) share: Jul-2009
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