China Eastern Airlines said it plans to launch a massive cost cutting campaign after receiving a 7-billion-yuan (US$1.02 billion) government cash injection.
The Shanghai-based airline said it will slash executives' salaries, encourage employees to take unpaid vacation and cut unprofitable routes, China Business News reported on Friday.
An unnamed company official told the newspaper that the airline would shelve the plan to open six subsidiaries this year to improve cash flow. The official said it is also considering cutting investment on other projects.
China Eastern, one of the country's three largest airline groups, posted a net loss of 2.29 billion yuan in the first nine months of 2008. Its net operating cash flow was 1.66 billion yuan, far short of the 12.8 billion yuan needed to repay its debts.
The airline announced at the end of December that it would raise 7 billion yuan by selling new shares to its State-owned parent company.
(China Daily January 9, 2009)
