China Eastern Airlines Corp aims to double occupancy rate in first and business classes on its long-haul international flights - one of its main cash cows - following its partnership with Singapore Airlines.

Currently, the Chinese carrier only fills 30 to 40 percent of seats in first and business class, leaving its long-haul routes - such as Shanghai to New York - suffering losses of one million yuan (US$135,000) or more each journey.

"We are lagging far behind even if we offer discounts for business class," board secretary Luo Zhuping said yesterday. "Something clear now is our long-haul flights will become more competitive with better services, products, and management to be brought in from the Singapore partner."

Luo said he hoped China Eastern's long-haul business class occupancy rate could reach 70 to 80 percent. Asked when the target might be met, he said one year was likely. "Once the long-haul turns profitable, the firm's earnings should definitely be no problem.

"Our high-end customers are mainly from Chinatown Street, but now we need more from Wall Street," Luo joked.

China Eastern signed an agreement last Friday which involved Singapore Airlines and its parent Temasek Holdings buying a 24-percent stake in the Chinese carrier. The deal, announced in September, has been deemed as a major inroad by Singapore Airlines to enter the booming Chinese aviation market, via financial hub Shanghai, where China Eastern is based.

Before the agreement was signed, the parent of Air China and Hong Kong's Cathay Pacific Airways had considered and rejected plans to make a counter-offer.

Air China's parent, which owns about 11 percent of China Eastern's Hong Kong-traded shares, still has chances to block the deal by uniting other minority shareholders, analysts have said.

The deal needs approval from two-thirds of minority shareholders.

(Shanghai Daily November 14, 2007)