China Eastern, Singapore Airlines discontinue talks

Shares of China Eastern Airlines fell nearly 10 percent Friday after reports     said the Chinese carrier would not hold more talks with Singapore Airlines regarding sale of shares.

Luo Zhuping, who is the board secretary of the airline, did not comment on the reports. An earlier negotiation between the two sides will lapse on August 9, according to published reports.

Zhuping was quoted as saying that it would not be fair to believe reporter speculation. He added that an official announcement would be forthcoming if a decision has been made.

He went on to state that he was disinclined to comment on the matter in the wake of the Beijing Olympics, which took off to a flying start on August 8.

In 2007, China Eastern said it would spin off 24 percent of its shares to Singapore Airlines. The airline is held by Temasek Holdings, the investment division of the Singaporean government.  However, that agreement fell to shambles after China Eastern’s shareholders went after a deal by Air China. However, a deal between the state-run China National Aviation Holdings Co., the parent firm of Air China, and China Eastern failed to materialize.

Last week, news reports indicated that Singapore and China Eastern had decided to reenter talks. And a Singapore Airlines spokesperson said that the two sides were in touch about other mutual agreements.

On Friday, shares of China Eastern finished at 6.86 yuan. The decline comes amid a spade of related news that global carriers were struggling to get more passengers amid soaring fuel prices.

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