China National Aviation Co (CNAC), the parent of Air China, has no plan to lower its offer price for a stake in rival China Eastern Airlines after the recent slump in the Shanghai-based carrier's share price, CNAC vice-president and Air China acting chairman Kong Dong said.
"Our position regarding China Eastern is unchanged," Kong said.
China Eastern's Hong Kong-listed shares have fallen more than 50 percent so far this year. Its shares were down 3.2 percent midday today at HK$3.36.
CNAC successfully blocked a deal in January that would have given Singapore Airlines and its parent company a 24 percent stake in China Eastern. The Singapore companies had offered HK$3.80 a share for China Eastern.
The Beijing-based company said the offer price was too low, and instead put forth its own proposal, offering at least HK$5 a share for a stake of up to 30 percent in China Eastern.
However, China Eastern has been reluctant to consider any proposal by the parent company of its main domestic competitor, and in late February officially rejected the offer. It said it is still interested in pushing for a deal with Singapore Airlines.
Singapore Airlines spokesman Stephen Forshaw said today the carrier was still in talks with China Eastern over acquiring a stake. London.
"We will continue a dialogue with them, but the question of when we may go back to shareholders and how that will take place is a question for China Eastern and not for us," he said.
Air China will seek another partner to expand in Shanghai if it fails to woo China Eastern, Kong said. He declined to elaborate.
Air China reported its 2007 net profit rose 57 percent to US$597 million, based on international accounting standards, lifted by gains from a stronger yuan and higher investment returns.
Based on Chinese accounting standards, the airline's net profit rose 30 percent to $547.62 million.