Bloomberg News

China Eastern Rises to Four-Week High on Budget Airline Outlook

June 11, 2012

China Eastern Airlines Corp. climbed to a four-week high in New York as the country’s second-largest carrier by passengers said its budget joint-venture with Qantas Airways Ltd. (QAN) will begin flights in the first half of 2013.

American depositary shares of China Eastern gained 0.7 percent to $15.45, its highest price since May 16.

The low-cost airline, Jetstar Hong Kong, is expected to obtain a license in late 2012 and begin operations in the first half of next year, said China Eastern Chairman Liu Shaoyong in Beijing. The Shanghai-based company, he added, expects to lower its debt through measures including a capital infusion from the government.

“This joint venture can take advantage of the increasing demand for air transportation addressing a segment of the market that would be attracted to a carrier offering more affordable travel costs,” Kevin Pollack, a fund manager at Paragon Capital LP in New York, said in an e-mail. “There is very limited competition in this space and being one of the earlier entrants could prove to be a huge advantage.”

To contact the reporter on this story: Leon Lazaroff in New York llazaroff@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at Tbarak@bloomberg.net


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