China Eastern awaits approval on plan to take on regional airlines from parent China Eastern Airlines Corp may complete the integration with two smaller, regional carriers owned by its parent company by the first half of next year. Chairman Ye Yigan said the Hong Kong-listed company proposed to shoulder the debts of Yunnan Airlines and China Northwest Airlines in return for their assets. 'We won't need to arrange financing for the acquisitions in that case. We won't need to pay ... The debts and assets will balance out,' Mr Ye said yesterday. The company is awaiting government approval for the restructuring. 'Nothing has been finalised at the moment,' Mr Ye said. The two regional carriers in 2002 were merged into its parent, China Eastern Airlines Group, as part of industry consolidation. Both airlines reported a profit in the first half, helping plans for the asset transfer, Mr Ye said. Yunnan Airlines made 160 million yuan in the first seven months while China Northwest Airlines earned 100 million yuan. The integration of the two carriers will help China Eastern expand its regional network. China Eastern Airlines on Wednesday reported net profit of 479 million yuan in the first half, compared with a loss of 1.25 billion yuan in the Sars-affected period a year ago. Passenger numbers jumped 88 per cent year on year to 8.29 million, said president Li Fenghua. The Shanghai-based carrier will spend 3.17 billion yuan in the second half to complete the purchase of six new aircraft, including three medium-haul A320s, two A321s and one A340-600 for long-haul operations. 'The new aircraft will be put into operation in the second half,' Mr Li said. Capital expenditure for next year will reach 2.6 billion yuan, as the carrier takes delivery of five A320s and two A321s. But surging oil prices remain a major concern. Although mainland jet fuel prices are regulated by the government, the carrier was expecting an increase after crude oil prices in China were raised this week by 400 yuan per tonne to 4,190 yuan, said chief financial officer Luo Weide. 'Fuel expenses will increase by 30 million yuan per month with the expected increase in jet fuel price,' he said. Jet fuel was fixed at 3,790 yuan a tonne in March.