Shanghai Airlines enters merger in poor form

Shanghai Airlines enters merger negotiations with former fierce cross-town rival, China Eastern Airlines, in a fragile state. Having notched two consecutive annual losses in 2008 and 2009, the carrier’s 1Q2009 net profit fell 28.7%, but without government subsidies it would have made a quarterly loss. [676 words]

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This report contains the following subheadings:

• Competitive pressure in Shanghai remain strong
• New credit lines and government bailout
• Network continues to grow

This report contains the following charts and tables:

• Shanghai Hongqiao Airport domestic capacity breakdown by carrier (seats per week as % of total)
• Shanghai Airlines net profit and net profit margin (%): 2006 to 2008
• Shanghai Airlines route network: Mar-2009