China East­ern to spend $439m for stake in Air France-KLM

China Daily (Hong Kong) - - BUSINESS - By WANG YING in Shang­hai wang_y­ing@chi­nadaily.com.cn

China East­ern Air Hold­ing Co said late on Thurs­day it will pick up a 10 per­cent stake in Air France-KLM Group for about 375 mil­lion eu­ros ($439.4 mil­lion).

This is the Shang­hai-based car­rier’s largest strate­gic in­vest­ment and is ex­pected to speed up its global ex­pan­sion.

A wholly owned over­seas arm of China East­ern has inked a share pur­chase agree­ment with the Paris-based air­line for the pur­pose.

China East­ern Air­lines, the listed arm of China East­ern Air Hold­ing Co, and Air FranceKLM signed an­other agree­ment for mar­ket co­op­er­a­tion.

At­lanta-based Delta Air Lines also an­nounced it will ac­quire a 10 per­cent stake in Air France-KLM.

Delta Air is China East­ern’s US part­ner. Delta Air holds a 3.55 per­cent stake in China East­ern.

Af­ter the agree­ment, both China East­ern and Delta can nom­i­nate one rep­re­sen­ta­tive each as di­rec­tor on the board per­cent of Air France-KLM.

China East­ern, Delta and Air France-KLM are mem­bers of SkyTeam, a global al­liance of air­lines that pro­vides pas­sen­gers ac­cess to more des­ti­na­tions, flight fre­quen­cies and con­nec­tiv­ity.

The three car­ri­ers based in three con­ti­nents hope to build closer com­mer­cial ties through equity deals and mar­ket co­op­er­a­tion agree­ments.

“The three of us are all renowned in­ter­na­tional air­lines with a his­tory of co­op­er­a­tion, which lays a solid foun­da­tion for this strate­gic in­vest­ment,” said Liu Shaoy­ong, chair­man of China East­ern.

Ac­cord­ing to their mar­ket co­op­er­a­tion agree­ment, China East­ern and Air France- KLM will join forces to ex­plore the mar­kets in China and Europe, sim­plify tran­sit pro­cesses and im­prove pas­sen­ger and lug­gage ser­vices.

“We will also start co­op­er­a­tion in re­source-shar­ing and e-com­merce. The goal is to en­hance our in­ter­na­tion­al­iza­tion in terms of com­pet­i­tive­ness and brand,” said Dong Bo, chief mar­ket­ing of­fi­cer of China East­ern Air­lines.

Thierry Ber­agnes, Thierry Ber­agnes, Al­liances Air France-KLM’s vice-pres­i­dent for Asia-Pa­cific re­gion, called the co­op­er­a­tion agree­ment the be­gin­ning of a new jour­ney. He be­lieves the three air­lines will grow stronger in the three mar­kets.

An­a­lysts said co­op­er­a­tion among China East­ern, Air France-KLM and Delta will broaden their growth po­ten­tial in the fast-grow­ing travel mar­kets in China, Europe and the US.

China East­ern owns a fleet of more than 650 air­craft and serves more than 100 mil­lion pas­sen­gers ev­ery year. It op­er­ates 67 flights per week to Europe.

stake that China East­ern will pick up in Air France-KLM Group

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