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China Eastern Airlines Co. Ltd. has invited J.P. Morgan Chase Bank for its global cash management to improve the airlines' capital flow.
J.P. Morgan Chase will provide the third-largest air carrier on the Chinese mainland a full-range of services, including currency settlement, data management, control and risk management, according to Q.C. Hua, general manager of the bank's Shanghai branch.
"Rapid development of our company calls for more securer and efficient and cash management capability," said Luo Weide, chief financial officer of Shanghai-based China Eastern yesterday.
The airline reported daily revenue last year of 400 million yuan (US$48.2 million) in eight currencies, generated mainly from its 209 routes across China and to 47 international destinations.
The air carrier has set up 12 ticketing offices in other countries and regions so far.
Capitalizing on its ties with more than 200 banks around the world, J.P. Morgan Chase can help China Eastern open foreign currency-denominated income and expenditure accounts in foreign countries, which enables the air carrier to fulfill a 24-hour capital flow to make the best use of free cash, said Margaret Leung, vice president for China and Philippines at J.P. Morgan Treasury Services.
"Unlike others businesses, aviation companies run 24 hours every day, which means capital services are needed every minute," said Leung.
Capital flow advice is not the only service China Eastern expects from the bank.
The bank will also act as financial adviser for the air carrier's acquisitions in China and potential foreign capital infusion programs.
China permitted domestic air carriers to attract overseas investment last June under the nation's commitments to the World Trade Organization.
"China Eastern is looking for the right time to attract a qualified foreign strategic partner," said Luo.
(eastday.com February 21, 2003)
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