Trading in shares of China Eastern Airlines Co Ltd was halted yesterday on the Shanghai and Hong Kong stock markets after a newspaper reported that the firm suffered huge losses in April.
A report published yesterday by the Beijing-based China Securities Journal, an official securities newspaper, said China Eastern had losses of more than 660 million yuan (US$79.52 million) in the first four months of 2003, citing its group Chairman Ye Yigan.
Company officials didn't deny the report, saying the amount is the total loss of the whole group, China Eastern Air Holding Co.
Figures for its listed arm, China Eastern Airlines, won't be released until the end of the second quarter.
"It was suggested by stock exchange officials to suspend trading for a day. The shares are expected to resume trading on Thursday," said Luo Zhuping, China Eastern board secretary.
He said the company will issue a statement today to clarify the issue.
China Securities Journal's report said the listed company was forecast to lose about 300 million yuan in April, citing an unidentified China Eastern official.
Industry analysts expect shares of China Eastern to decline when the stock continues trading.
With the recovery of air travel, the company has restored its suspended flights to 70 percent of its normal schedule, Luo said.
Still, it is hard for carriers to return to their normal levels in such a short period.
"We believe the whole industry will regain its strength by the year's end," said Zhu Anping, an analyst with Shenyin & Wanguo Research and Consulting.
During the worst days of the SARS outbreak, China Eastern employed active public relations campaigns to strive for both favorable policies from the government and sympathy from investors.
China Eastern officials said in May the Shanghai-based carrier was losing between 10 million and 20 million yuan daily.
(Shanghai Daily June 26, 2003)
