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China Eastern And Shanghai Air Update  
User currently offlineAA1818 From Trinidad and Tobago, joined Feb 2006, 3435 posts, RR: 4
Posted (5 years 2 months 1 week 6 days 4 hours ago) and read 3232 times:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOeW5yWKDuDI

China Eastern Offers 9 Billion Yuan for Shanghai Air

Quote:
July 13 (Bloomberg) -- China Eastern Airlines Corp., the nation’s most unprofitable carrier, offered about 9 billion yuan ($1.3 billion) for Shanghai Airlines Co. as it seeks to dominate air travel in the country’s financial capital.

What does this mean for the airline landscape in China?
What does this mean for the global alliances?

AA1818


“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
13 replies: All unread, jump to last
 
User currently offlineEddieDude From Mexico, joined Nov 2003, 7584 posts, RR: 43
Reply 1, posted (5 years 2 months 1 week 6 days 3 hours ago) and read 3190 times:

Hi AA1818, you beat me to it.

This archived thread has some interesting opinions: Shanghai Airlines And China Eastern To Combine (by EddieDude Jun 7 2009 in Civil Aviation)

I guess we won't know right away the answers to many questions. I can think of some:

Will the brand "Shanghai Airlines" disappear? Will MU join oneworld or Star Alliance? Will SQ try once again to buy a stake in MU?



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8568 posts, RR: 13
Reply 2, posted (5 years 2 months 1 week 6 days 3 hours ago) and read 3153 times:
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my thoughts on this based on a few articles I have read over the last few weeks - sorry , I dont have the links

Quoting EddieDude (Reply 1):
Will the brand "Shanghai Airlines" disappear?

in the short term at least the intention is to keep Shanghai Airlines as a wholly owned unit of China Eastern keeping its own brand .... long term of course could be quite different .

Quoting EddieDude (Reply 1):
Will MU join oneworld or Star Alliance?

MU have previously indicated an intention to join Skyteam , ATWonline actually said that the agreement was supposed to be signed this month but has been put on hold due to the merger

Quoting EddieDude (Reply 1):
Will SQ try once again to buy a stake in MU?

SQ were pretty annoyed at being stuffed around in their previous attempt to buy 25% of China Eastern - also both parts of this merger have been bleeding money so I think that they will keep well clear this time around



Moderation in all things ... including moderation ;-)
User currently offlineEddieDude From Mexico, joined Nov 2003, 7584 posts, RR: 43
Reply 3, posted (5 years 2 months 1 week 6 days 2 hours ago) and read 3116 times:

Hi Andrew,

How are you mate? How are the Mauritius Islands treating you?

Thanks a lot for your valuable input. I find it quite interesting that MU is in talks to join SkyTeam. If that plan comes to fruition, SkyTeam will become a very China-focused alliance and would effectively block oneworld from having a major Chinese member. I was always under the impression that MU would eventually join oneworld.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineFCKC From France, joined Nov 2004, 2348 posts, RR: 4
Reply 4, posted (5 years 2 months 1 week 6 days ago) and read 3058 times:

It means the first painted A321 Shanghai Al is a pearl , being the first and probably the last to be full cs painted Shanghai Al !

User currently offlineArticulatexpat From Hong Kong, joined Sep 2006, 156 posts, RR: 1
Reply 5, posted (5 years 2 months 1 week 5 days 19 hours ago) and read 2861 times:

When I read about the merger in the news this morning (Reuters, I believe), the article stated that Shanghai Airlines was to keep its identity and operate as a separate, wholly-owned subsidiary. I hope that's the case, if only for selfish reasons. I've had good flights on Shanghai and would like to see them stick around.

User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8568 posts, RR: 13
Reply 6, posted (5 years 2 months 1 week 5 days 19 hours ago) and read 2835 times:
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Quoting EddieDude (Reply 3):

How are you mate? How are the Mauritius Islands treating you? .

fine thanks Eddie , it is a typical Mauritian winter day , sunshine then rain then some more sunshine - the dogs are obviously expecting more rain as they are curled up at my feet !!!




Quoting EddieDude (Reply 3):
Thanks a lot for your valuable input. I find it quite interesting that MU is in talks to join SkyTeam. If that plan comes to fruition, SkyTeam will become a very China-focused alliance and would effectively block oneworld from having a major Chinese member. I was always under the impression that MU would eventually join oneworld.

I have seen a number of suggestions that Hainan could end up in OW , I am sure that in spite of keeping up a brave face and talking about the number of Chinese destinations KA can offer OW are aware that they really will need a China based member in the long term , not just a HKG based airline that happens to serve quite a few Chinese destinations .

Quoting Articulatexpat (Reply 5):
When I read about the merger in the news this morning (Reuters, I believe), the article stated that Shanghai Airlines was to keep its identity and operate as a separate, wholly-owned subsidiary. I hope that's the case

I would like that to be the case as well Marshall , but I am not sure how FM and MU will get the most out of the merger in the longer term if they keep separate identities , I had hoped that CA would take over FM , or , failing that I had hoped that 'the minnow would swallow the whale' and that FM and MU would combine under the Shanghai Airlines brand within Star .

Unfortunately , my suspicion is that keeping the separate brands is only a short term measure and that , if , in a couple of years , MU manage to sort out their own rather sizeable problems they will then absorb FM , eliminate the Shanghai Airlines brand and the whole operation will then be under the MU brand  Sad ...... and even worse it will be in Skyteam  Sad Sad



Moderation in all things ... including moderation ;-)
User currently offlineXiaotung From New Zealand, joined Jan 2006, 840 posts, RR: 0
Reply 7, posted (5 years 2 months 1 week 5 days 18 hours ago) and read 2781 times:



Quoting Kiwiandrew (Reply 6):
I would like that to be the case as well Marshall , but I am not sure how FM and MU will get the most out of the merger in the longer term if they keep separate identities , I had hoped that CA would take over FM , or , failing that I had hoped that 'the minnow would swallow the whale' and that FM and MU would combine under the Shanghai Airlines brand within Star .

Unfortunately , my suspicion is that keeping the separate brands is only a short term measure and that , if , in a couple of years , MU manage to sort out their own rather sizeable problems they will then absorb FM , eliminate the Shanghai Airlines brand and the whole operation will then be under the MU brand ...... and even worse it will be in Skyteam

It has actually been reported that FM and MU hoped to adopt the CX & KA model and I do see FM continue to exist for a long time. The brand was after all developed by the Shanghai government and I don't think they would let it go that easily. It would make more sense to me if CA would exit *A and end up in OW given their ties with CX.

The question is if there is really room for MU in *A? The current MU chairman is the very same person who brought CZ into SkyTeam. I will hate to lose my HKG-PVG connection on the *A network.


User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8568 posts, RR: 13
Reply 8, posted (5 years 2 months 1 week 5 days 17 hours ago) and read 2752 times:
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Quoting Xiaotung (Reply 7):
It would make more sense to me if CA would exit *A and end up in OW given their ties with CX.

or , conversely for CX and KA to exit OW and end up in *A given CX ties with CA  Wink ( for the record , I dont see that happening , I expect the status quo will continue with CA in *A and CX/KA in OW )

Dont forget that we are dealing with China here , and that what might seem sensible from a purely commercial point of view is not necessarily going to get the nod from the authorities , I have the feeling that behind the scenes the fates of all the Chinese airlines have been decided and it is entirely possible that the authorities may have told MU that they can take over FM but must keep it separate and in *A even if MU join Skyteam .



Moderation in all things ... including moderation ;-)
User currently offlineXiaotung From New Zealand, joined Jan 2006, 840 posts, RR: 0
Reply 9, posted (5 years 2 months 1 week 5 days 17 hours ago) and read 2732 times:



Quoting Kiwiandrew (Reply 8):
Dont forget that we are dealing with China here , and that what might seem sensible from a purely commercial point of view is not necessarily going to get the nod from the authorities , I have the feeling that behind the scenes the fates of all the Chinese airlines have been decided and it is entirely possible that the authorities may have told MU that they can take over FM but must keep it separate and in *A even if MU join Skyteam .

That makes no commercial sense at all. I don't even know how that would work. Don't forget there is always the possibility of SQ tie-up. Rumor has it that SQ wants to leave *A. You can't say it's entirely impossible that they both go to another alliance. I hope they all stay but you never know.


User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8568 posts, RR: 13
Reply 10, posted (5 years 2 months 1 week 5 days 17 hours ago) and read 2715 times:
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Quoting Xiaotung (Reply 9):
Don't forget there is always the possibility of SQ tie-up.

possible yes , but after SQ were stuffed around the last time when they thought they had a deal with MU , I would think that it is not so likely to try again anytime soon , they are not an airline that forgives easily .

Quoting Xiaotung (Reply 9):
Rumor has it that SQ wants to leave *A

yes , I have heard that rumour , on Anet and on Flyertalk but nowhere else , nobody ever seems able to provide any verification or provide any compelling reason why SQ would want to change , while it is true that they seem to be quite halfhearted about participation in *A I really dont see them being any more enthusiastic participants in either OW or Skyteam so I am unclear why they would want to go to all the expense of changing - other alliance hoppers such as MX and CO have had quite logical cases for switching to another alliance , but what does SQ gain by quitting *A ??



Moderation in all things ... including moderation ;-)
User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8568 posts, RR: 13
Reply 11, posted (5 years 2 months 1 week 5 days 17 hours ago) and read 2709 times:
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Quoting Xiaotung (Reply 9):
That makes no commercial sense at all. I don't even know how that would work.

the same way that CA are in *A and CX/KA are in Oneworld despite having ownership overlaps



Moderation in all things ... including moderation ;-)
User currently offlineKiwiandrew From New Zealand, joined Jun 2005, 8568 posts, RR: 13
Reply 12, posted (5 years 2 months 1 week 4 days 22 hours ago) and read 2493 times:
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Quoting Kiwiandrew (Reply 10):
Quoting Xiaotung (Reply 9):
Don't forget there is always the possibility of SQ tie-up.

possible yes , but after SQ were stuffed around the last time when they thought they had a deal with MU , I would think that it is not so likely to try again anytime soon , they are not an airline that forgives easily .

OK , I may have to eat my words ( not the first time )

http://www.atwonline.com/news/story.html?storyID=17204

"After the merger, CEA is interested in selling sell a stake to an Asian carrier that will be its strategic investor. Most likely, it will try to introduce Singapore Airlines again. Both carriers have started contact," an internal source told ATWOnline.



Moderation in all things ... including moderation ;-)
User currently offlineXiaotung From New Zealand, joined Jan 2006, 840 posts, RR: 0
Reply 13, posted (5 years 2 months 1 day 17 hours ago) and read 2240 times:

It's happening fast. FM and MU have already linked each other's FFP's effective immediately. Shanghai Airlines' Crane Club also becomes the only program in Mainland China which accures miles on 3 major Chinese airlines, namely FM, MU, & CA. Sorry I didn't bother to copy the link as they have only announced this on the Chinese language page. Still can't see how this will work in the long run.

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