Ctrip Takes China Eastern Stake

Chinese online travel agency Ctrip has agreed to invest CNY3 billion yuan (USD$463 million) in China Eastern Airlines through a private share placement.

For Ctrip, the move may help to resolve a long-standing dispute with major Chinese carriers over the payment of agency commissions on international tickets.

The investment is part of a deal between Ctrip and China Eastern to collaborate on products and services, including low-cost and international travel, Ctrip and China Eastern said.

Ctrip may also elect to further increase its stake in the listed carrier over the 12 months following the placement and may be entitled to appoint an observer or director to China Eastern's board, the travel company said.

China Eastern group is also looking to diversify its shareholding structure, a move flagged by China Eastern president Ma Xulun in March.

China's government has been urging its state-owned firms to bring in outside shareholders to improve efficiency.