China Eastern parks 10% of fleet
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China’s third largest carrier, China Eastern Airlines, is taking about a tenth of its fleet out of service as the global economic slowdown strikes a further blow to the aviation industry.
Bloomberg has reported that the airline has grounded more than 20 planes as it cuts unprofitable routes. China Eastern’s Board Secretary, Luo Zhuping, said that a management team had also been formed to monitor further cost cutting measures.
According to the report, China Eastern has 15 times more debt than equity, and Jack Xu, an analyst at Sinopac Securities Co. in Shanghai, believes the situation for the carrier is dire.
“China Eastern has to try everything it can to stave off bankruptcy,” Xu told Bloomberg. “It’s undoubtedly the weakest among Chinese carriers,” he added.
The Shanghai-based carrier had a fleet of 225 planes at end of June, operating 398 routes. According to Luo, the parked planes are at small airports in secondary Chinese cities.
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