China Eastern Airlines Corp's bid to find a strategic partner is in a state of limbo and its options remain limited, analysts said yesterday.
The Shanghai-based airline, which needs both capital and management expertise, on Tuesday turned down an offer from China National Aviation Corp (CNAC) to take a major stake in the company.
This came seven weeks after China Eastern shareholders, against management wishes, rejected a bid by Singapore Airlines for a 24 per cent stake.
Now, analysts say, unless there is a management reshuffle at China Eastern, or Singapore Airlines makes a U-turn and sweetens its bid, the chances of the carrier tying up with a strategic investor appear remote.
'After its failed deal with Singapore Airlines, CEA needs to act quickly to forge strategic ties with a strong partner to help it repair its balance sheet and improve operational efficiency,' wrote Fitch Ratings associate director Li Jinqing in a report.
The market was not surprised by China Eastern's refusal of CNAC's one-page proposal on Tuesday.
'We haven't seen CNAC make [any] essential breakthrough to fix its relationship with China Eastern,' Citigroup said in a report yesterday.
