Can China's east Airlines, the flight to the retreat of the restructuring pain-13.9 billion and 1.25 billion of the tragic results?

Absrtact: With the Eastern Airlines on the weekend confirmed at the shareholders ' meeting, the two sides set about "indefinite suspension", has been set up by the Eastern Group general manager Liu-led restructuring of the leadership group, the market looks forward to more than a year of the aviation industry drama finally officially unveiled.　　After a lapse of 1.5, Oriental Airlines Co., Ltd. has once again become the most concerned airline.　　With China Eastern last weekend confirmed at the shareholders ' meeting, the two sides embarked on "indefinite suspension", has set up by the Eastern Group general manager Liu-led restructuring leadership group, the market looks forward to more than a year of the aviation industry drama finally officially unveiled. From "East new Love" to "East Love", from the one you love, I would have been stirred up by the competition. The combination of self-reliance and self-reliance, to a clear attitude led by the State Council SASAC, and the outcome of the "La Lang Match", in two companies are financially difficult, the global aviation industry recession,　　As well as the construction of the Shanghai aviation hub port, such as the complex background of the national strategy, "1+1> 2" effect distance from the Eastern airlines, on how far from the airlines, whether the 2008-year East Airlines, on the airlines recorded a huge loss of 13.9 billion yuan and 1.249 billion yuan of tragic results? "East on Love," the opening of the first Eastern airlines "gossip" to go back to the "East new Love" after the collapse of the months. In September 2008, Cao, the general manager of Eastern Airlines, told the media that the Shanghai Sasac and the State Council SASAC were discussing the possibility of cooperation, with the Shanghai government to inject capital into the East airlines and then push its merger with the airline.　　The merged company will consider further selling part of its shares to Singapore Airlines (Singapore A Irlines Ltd., hereinafter referred to as "Sia"). After more than half a year, the Eastern Airlines, on the air are repeatedly denied in various occasions the reorganization of the two rumors, but the market is that it is "a". December 12 last year, the Communist Party organization of the Central Committee announced the former Southern Airlines chairman Liu transferred to the Eastern Airlines, was interpreted as "with mission assignment."　　Since then, the eastern Airlines on the big loss, Shanghai was designated as an international hub port, the date of the Expo is approaching, all from the side of the implication of the Eastern Airlines on the restructuring is imminent. At the eastern shareholder's meeting last weekend, Liu confirmed that China Eastern Airlines and China Airlines have formed a joint reorganization leading group with its leader, chairman Zhou Chi and general manager Machalen as deputy leader of the group, a total of 7 people, the other 4 people also include from the Eastern Airlines and the 2 senior executives.　　The joint restructuring Leadership group has begun preparatory work to explore, study and negotiate the modalities, path and timetable of reorganization.　　"After the joint reorganization of the leadership team to complete the way and the timetable of the reorganization discussion, we will make the final decision through the board of directors, and then report to the relevant government departments and industry departments before they can release the joint reorganization reports to the society, and I expect to have a formal report within 20 days, Liu said. Here, on June 11, the announcement said that the Securities and Futures Commission had received the approval of the Shanghai Airlines Limited public offering of shares on the same day and approved the company toOne of the shareholders of Jinjiang International (Group) Co., Ltd. (hereinafter referred to as Jinjiang International) private issue about 222 million shares.　　After the completion of the additional shares, Jinjiang International accounted for the total share of the airline will increase from 7.93% to 23.61%, to the company's second largest shareholder.　　This is in line with one of the industry's presumed integration paths, that is, China Eastern shares through the parent company of Shanghai Sasac under the acquisition of Shanghai Joint Investment Co., Ltd. held by the 35.73% shares, plus Jinjiang International Holdings, just close to 60%, to complete the merger of the airline.　　So far "East Love" Official sunshine.　　Financial pressure can not be underestimated however, this is not a good reorganization case, across the obstacles. The most obvious difficulty comes from finance. In 2008, China Eastern Airlines and the Upper airlines respectively appeared as high as 13.9 billion yuan and 1.249 billion yuan of huge losses, East airlines serious insolvency. Since then, China Eastern Airlines, on the airlines received 7 billion and 1 billion yuan capital injection.　　After the completion of the injection, China Eastern's asset-liability ratio will be reduced by 8.36% to 90.13%. In May this year, the Eastern Airlines Group was injected with 2 billion yuan by the state. "The money will be used primarily to resolve the group's difficulties," said Liujiangpo, spokesman for the Eastern Airlines Group. "But it is not easy to inject these 2 billion dollars into a public company," he said.　　Since the 7 billion yuan into the listed companies, China Eastern Airlines holdings of listed companies have been approaching the upper limit of 75%, China Eastern Airlines to the parent company will have difficulties.　　At present, Eastern Airlines also hold the National Development Bank, Bank of China and several banks accumulated bank credit lines have exceeded hundreds of billions of dollars. Both markets remain highly coincident according to international law, the aviation hub port should have a local market share of more than 50% of the base air. Therefore, the purpose of China Eastern Airlines to restructure is to "create a more profitable airline and strengthen Shanghai's position as an international aviation hub."　　"From the current situation, if the Eastern Airlines and the completion of the reorganization, the new company accounted for the Shanghai market share will be expected to reach 50%, the fleet size of more than 300, can make up for the Eastern airlines in the base market pricing power weak defects, but in the business, the East Airlines network complementarity seems to be difficult to complete the route optimization requirements. Kang Jianjun, associate professor of Civil Aviation Management Institute of China, said that the eastern airlines, on the airlines of each other's network overlap more, are doing in Southeast Asia mainly in the Short-distance international routes, the domestic network is to Shanghai as the basis for a fan-shaped extension, which is the test of optimizing the route resources for Eastern Airlines　　Airline insiders also admitted that, from the business, it and the Star Alliance of Air China Network complementarity, the system is also more similar. Liu revealed that, while discussing the reorganization plan, the further cooperation of China Eastern Airlines has already begun.　　Previously, the Eastern airlines and the airlines have already had some routes for code-sharing cooperation. China Eastern Airlines said that the company's focus this year on the hub market, key market share, the formation of market discourse, the construction of Shanghai into a composite hub, Xi ' an and Kunming to build a regional hub. At the market level, China Eastern considers the transport capacity to the core market, keyThe market, the profit big line assemble, strengthens the capacity and the market match, first pulls the international route the capacity to return to the domestic.　　In Shanghai, "cultural differences" is also easy to ignore the two companies in the cultural differences. At an internal company meeting in April this year, Liu attributed one of the reasons for the 14 billion yuan loss last year to "eating too much and gastrointestinal dysfunction". Eastern Airlines in the history of mergers of enterprises, the most frequent, so the history of the heaviest burden. In the recent decade, China Eastern Airlines has integrated the Great Wall aviation, general aviation, Yunnan Airlines, Northwest Airlines, Wuhan Airlines and other airlines, the middle management staff frequent change.　　While on the flight is born in China's civil aviation industry and enterprise separation of the reform wave, belong to the typical "Shanghai culture." And since Liu, Machalen Airborne East, there have been a number of Air China, HNA cadres from the inauguration of the Eastern Airlines. The review of the global travel news that the future of the new Eastern airlines will be gathered from Southern Airlines, Air China, Eastern Airlines, HNA, on the airlines, how to treat each other, the best talent will be a test of Liu and his team of great wisdom of a key point.　　In addition, as the two companies in Shanghai, how to deal with the brand is also an important issue of the reorganization plan. In-Laws unknown because of the eastern and the upper airlines are central and state-owned enterprises, the final holding party is the State Council state-owned and Shanghai Sasac, therefore, after the reorganization of the new East Airlines who is the son-in-law, but also has been a hindrance to the reorganization of the sensitive link opened.　　From the current situation, the new Eastern airlines may belong to the State Council SASAC, "in the details of the programme and future business development, the new Eastern airlines should be compensated for Shanghai," said a shanghai-based brokerage who declined to be named. "If there is to be another government-led restructuring of the airline, it should be a result of strategic thinking based on the great powers of the civil aviation, which is based on how to improve the international competitiveness of China's airlines and airports, rather than based on a regional market, or the development of a city, Or a government-led outcome. The combination of two patients only makes the family ' physical strength ' weaker.　　In the history of successful mergers and acquisitions, most of them occurred in the case of ' strong Union ', ' weak and weak ', and few ' weakly weak joint ' or ' weak and strong ' phenomenon, Kang Jianjun pointed out. Mr Lee's hair at the International Air Transport Association's annual meeting leaves Benzong with more room for imagination. "Singapore Airlines will be able to create a new opportunity for China Eastern Airlines to restart negotiations with the Chinese authorities and Sia," it said. Although chew, chief executive of Sia, later said in an interview with reporters that the talks of mentor were purely personal opinions, Sia would not start the equity talks with Eastern Airlines at present.　　But it is clear that such a path is the same as the first time the September 2008 "East Love" came out. Eastern Airlines has some "desperate" some investment bankers have previously disclosed to reporters that, in view of the financial situation of China Eastern Airlines, it will also introduce funds from other institutions outside the government injection. And Liu in the media interview also said that for the marketLook forward to the restructuring of the domestic and international, we are open to the state of mind, in the policy allows, to ensure that shareholders benefit, China Eastern does not rule out any company with the global cooperation, whether he is a financial investors, brand managers or internal and external, can cooperate.