China Eastern Airlines’ controlling shareholder CEA Holding will inject up to CNY10.8b ($1.67b) into the airline by purchasing nearly 2.5b of newly issued A-shares, in a move the Shanghai-based carrier says will provide “strong financial support” for it to develop its business to cope with the impact of Covid-19. The A-shares, which have a par value of CNY1 ($0.15), will be issued at CNY4.34 per share, a 2 February filing to the Hong Kong stock exchange shows. A-shares are shares denominated in Chinese yuan and trade on the Shanghai and Shenzhen stock exchanges. CEA Holding holds approximately 49.8% of the 16.4b China Eastern shares in issue. It directly and indirectly holds around 5.53b A-shares and about 2.63b H-shares – shares of mainland Chinese companies that are traded on the Hong Kong stock exchange – through CES Global Holdings (Hong Kong). CEA Holding must purchase the additional A-shares within a twelve-month validity period from 2 February, the date on which the issuance was approved at a China Eastern board meeting. China Eastern says it will use the proceeds to replenish its liquidity and repay debts. <br/>
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Korean Air has reported a W238.3b ($213m) operating profit in 2020, 17% below 2019 levels, on the back of a strong cargo business and company-wide cost cutting efforts. Due to Covid-19, the sharp fall in passenger demand resulted in a 40% year-on-year decline in revenues to W7.4t, the flag carrier said discussing its tentative financial results that were disclosed at a same-day board meeting. Total operating expenses were down 40% year-on-year, reflecting the significant reduction in passenger capacity – passenger revenues plummeted 74% – as well as falling oil prices. Other operating costs such as facility fees and labour costs were likewise reduced. On the other hand, cargo sales increased 66%, supported by a 25% increase in freighter operations year-on-year and all 23 aircraft in its fleet being fully utilised, as well as the deployment of idle passenger capacity. Korean Air notes there was an increase in demand for Covid-19 diagnostic kits and automobile parts, while some cargo demand shifted from sea to air freight. During 2020, Korean Air raised W1.1t worth of capital by issuing new shares and from completing the sale of its in-flight catering and duty-free business units at W981.7b.<br/>