"In addition to financial problems, the challenges facing China Eastern Airlines are a lot " , said Liu Shaoyong yesterday, the Eastern Airlines () Group General Manager, and Eastern Airlines Co., Ltd. chairman.

Although the shareholders at the General Assembly have just adopted the State’s 70 billion capital injection program, Liu still hopes to get more government capital injection.  Correspondingly, the 2008 oil hedge caused China Eastern 6.2 billion Yuan.  China Eastern has not in fact got over from the difficulties.  Liu expresses, in order to "put destiny in their own hands", China Eastern  must accelerate e-commerce.  As for acquisition, "except that the Group intends to buy East Star Airlines, and rest of the movements among the current domestic routes have not be seen."

Capital injection to make up for not only for hedging loss

Nanfang Dushi: How China Eastern to deal with both internal and external problems?

Liu: China Eastern’s goal is to significantly reduced losses in 2009, breakeven in 2010, profits in 2011.  We have initiated some plan to stop bleeding, not to increase capacity while creating 900 new routes, suspending six branches.  But these are only preliminary work.  China Eastern need to continued adjustment between the core market and non-core markets.

We hope to keep tapping our potentials, such as increasing the number of flight seats, so that to increase transport capacity by 13%.  At present, the whole situation is turning toward a better direction, including the country's capital injection, and four banks’ credit line to China Eastern Airlines Group and China Eastern of more than 45 billion yuan.

Be cautious about price war

Nanfang Dushi: The general aviation market this year is very difficult.

Liu: My view is that in 2009 China's domestic aviation market will resume growth, but it is still a relatively difficult year.  The restoration of passenger service will be earlier than the cargo services.  The international market should resume growth in the second half of next year.

Nanfang Dushi:  Airlines, including your old boss Southern Airlines, have recently cut prices to attract customers, including first class.

Liu: I am opposed to monopoly prices, and also opposed to excessive competition.  I hope that air fares and the market are closer, but also affordable.

Nanfang Dushi: I have heard that you would like to cooperate with Alibaba's Jack Ma?

Liu: Such cooperation makes sense, but we should also have our own stuff.  The two sides can achieve further cooperation, but the airline's development must be based on our own initiatives. We should not put our fate on others.

China Eastern  "character" target

Nanfang Dushi: You also said that China Eastern was facing not only financial issues.  China Eastern's brand reputation loss was too great in events like the "back door", etc.

Liu: We put forward a goal:  China Eastern to become what kind of company? To become an "employees love, customers chooses first, shareholders satisfy, society trusts" companies.  In the current difficult circumstances a pay cut for executives, but not for employees is for employee satisfaction.  As a civil aviation company, first of all we think of customers.  China Eastern Airlines are creating some fine routes.  The Beijing-Shanghai route provides hourly flight from 8:00 am to 9:00 pm, and the planes are large, more comfortable. 

Satisfying shareholders is not only getting the country, the major shareholder, satisfied, but also taking into account the minority shareholders.  7 billion capital injection program is approved with high rate, just because of this. 

Recently, we are decomposing our tasks in accordance with the above four target indicators.  None of them is minor.

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