China Eastern Airlines seeks govt approval to become investment firm

[SHANGHAI] China Eastern Airlines said it has applied for government permission to operate as an investment firm - a move that would allow it to reduce its reliance on ticket sales and diversify into other businesses.

Wang Haitao, vice-president of China Eastern's strategic development unit, told financial magazine Yicai its airline business would remain its core business but the change would allow it to explore investment opportunities across the aviation sector.

A spokesman for the airline confirmed the remarks as reported by Yicai.

China's travel boom has brought in large profits for its state-owned airlines but revenue per passenger has begun to fall due to fierce competition and slowing growth in traveller numbers.

China Eastern and rivals, Air China Ltd and China Southern Airlines , also face competition at home from a fast-growing high-speed rail network.

State-owned China Eastern last year sold a 3.55 per cent stake to Delta Air Lines Inc, which became the first US carrier to own part of a Chinese airline.

REUTERS