Singapore Airlines all set to pick up stake in China Eastern

Singapore: Both Singapore Airlines (SA), the world's largest carrier by market value, and China Eastern Airlines (CEA), the third largest carrier in Mainland China, may likely announce plans that may see the Singapore-based carrier investing in China Eastern. SA is looking forward to making the investment, even as economic growth takes travel demand in the world's most populous nation to all time highs.

According to industry analysts, picking up a stake in China Eastern would give Singapore Airlines more access to an air travel market expected to grow fivefold by 2025. In the case of China Eastern, it is the only unprofitable listed carrier in the country and is seeking investors to ease debt levels, and also to help fend off competition from Cathay Pacific Airways and Air China in Shanghai, which is its home market.

Trading in their shares was halted on Tuesday after announcements from officials of both airlines regarding an advanced stage of discussions between the two.

According to analysts, the suspension of trading likely signaled that the two companies had reached an agreement. They were also upbeat about Singapore Airline's move saying that being one of the best airlines in the world it would provide strong support to China Eastern.

Shares of China Eastern have more than doubled in Hong Kong this year, raising its market capitalization to $4.88 billion, according to Bloomberg data.