China Eastern, Shanghai Air to Combine After Losses

From Bloomberg:

China Eastern Airlines Corp. will combine with Shanghai Airlines Co. after joint losses of 16.5 billion yuan ($2.4 billion) last year prompted the government to bail out the two state-controlled carriers.

“We just got approval from the government” on June 6, Shanghai Airlines Vice President Feng Xin said late yesterday by phone from Kuala Lumpur.

The combined group would have 306 planes and more than 600 routes, giving it a 50 percent share of air travel in China’s financial capital. Airlines worldwide may lose $9 billion this year as the recession and swine flu hurt travel demand, the International Air Transport Association forecast today.