China Eastern Airlines: rebranding, strategic revival, new 777 deliveries and an investor hunt

It is not often that a lick of paint is so momentous. When China Eastern Airlines - China's second largest carrier and the world's eighth largest by seats - unveiled its new livery, it marked an important step. The details of the branding are the minor part; the major fact is that in China's slow-moving legacy environment of national carriers where the state has a heavy hand, China Eastern was able to implement change. Competitors, still wearing their old coats, are jealous. This is China Eastern's first re-branding since its establishment over 20 years ago, and the first major one among China's airlines.

The branding itself is the visible signal of strategic change. A more material one is due to arrive with the 24-Sep-2014 delivery of the first of China Eastern's 20 777s for long-haul growth, mainly to North America. China Eastern's lagging performance has made its Shanghai hub vulnerable, albeit one of China's most important. Further, China Eastern is the first - and so far only - state carrier to launch an LCC. Even more disruptive, in its low key way, is China Eastern's discussion of finding a strategic investor.

The strategy may be relatively fresh but it needs time (perhaps years) to incubate. China Eastern has some way to go before becoming fully commercial; for example, its 1H2014 financial results included domestic load factor gains at the expense of yield - while operating profit was boosted by state subsidies.