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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________________
FORM
6-K
Report
of Foreign Private Issuer
Pursuant
to Rule 13a-16 or 15d-16
under
the Securities Exchange Act of 1934
For the
month of May 2009
Commission
File Number: 001-14550
China
Eastern Airlines Corporation Limited
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(Translation
of Registrant’s name into English)
2550
Hongqiao Road
Hongqiao
Airport
Shanghai,
China 200335
————————————————————
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F: x Form
20-F ¨ Form
40-F
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): ¨
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934: ¨ Yes x No
If "Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): n/a
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
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China Eastern Airlines Corporation
Limited
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(Registrant)
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Date
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May 12, 2009
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By
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/s/ Luo Zhuping
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Name:
Luo Zhuping
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Title:
Company
Secretary
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Certain
statements contained in this announcement may be regarded as "forward-looking
statements" within the meaning of the U.S. Securities Exchange Act of 1934, as
amended. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors, which may cause the actual performance,
financial condition or results of operations of the Company to be materially
different from any future performance, financial condition or results of
operations implied by such forward-looking statements. Further
information regarding these risks, uncertainties and other factors is included
in the Company's
filings with the U.S. Securities and Exchange Commission. The
forward-looking statements included in this announcement represent the Company's
views as of the date of this announcement. While the Company
anticipates that subsequent events and developments may cause the Company's
views to change, the Company specifically disclaims any obligation to update
these forward-looking statements, unless required by applicable
laws. These forward-looking statements should not be relied upon as
representing the Company's views as of any date subsequent to the date of this
announcement.
Hong
Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited
takes no responsibility for the contents of this announcement, make no
representation as to its accuracy or completeness and expressly disclaims any
liability whatsoever for any loss howsoever arising from or in reliance upon the
whole or any part of the contents of this announcement.
(A
joint stock limited company incorporated in the People’s Republic of China with
limited liability)
(Stock
code: 670)
OVERSEAS
REGULATORY ANNOUNCEMENT
Businesses
Measured at Fair Value
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This
announcement is made by China Eastern Airlines Corporation Limited
pursuant to the disclosure requirement under Rule 13.09 of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited.
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This
announcement is made by China Eastern Airlines Corporation Limited (the “Company”) in
compliance with Rule 13.09 of the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited (the “Listing Rules”). Rule 13.09(2)
of the Listing Rules requires any issuer listed on The Stock Exchange of Hong
Kong Limited (the “Stock
Exchange”) whose securities are also listed on other stock exchange(s) to
simultaneously inform the Stock Exchange of any information released to any of
such other exchange(s) and to ensure that such information is released to the
market in Hong Kong at the same time as it is released to the other
market(s).
The
Company hereby discloses the particulars and decision-making procedures for the
businesses measured at fair value as follows:
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I.
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Particulars
of the Businesses of the Company Measured at Fair
Value
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The
businesses of the Company measured at fair value, which mainly include aviation
fuel hedging, interest rate swaps and forward foreign exchange, are engaged for
the purpose of avoiding risks brought by fluctuations in aviation fuel prices,
exchange rates and interest rates.
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1.
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Aviation
Fuel Hedging
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Fuel
prices was at a relatively high level in the first three quarters of 2008.
During this period, the aviation fuel cost of the Company has significantly
increased. The cost of actual fuel consumption (net of hedging settlement
income) in the first three quarters of 2008 has increased by RMB2,600 million as
compared to the corresponding period of 2007. As the Company has locked in part
of the fuel cost by aviation fuel hedging, the income from settlement of the
aviation fuel hedging contracts in the first three quarters of 2008 amounted to
RMB300 million in total, which to a certain extent hedged against the increase
in fuel cost as a result of the increase in fuel prices.
In the
fourth quarter of 2008, aviation fuel hedging contracts of the Company
experienced relatively greater settlement losses of approximately RMB130 million
due to dramatic decline in the international fuel price. On the other hand, as
the domestic pricing mechanism for the procurement of refined oil was lagging
behind, the Company’s spot fuel cost in the fourth quarter remained
high.
The
losses from settlement of the aviation fuel hedging contracts in the first
quarter of 2009 was approximately RMB916 million. The aviation fuel cost in the
first quarter of 2009 was approximately RMB2,590 million, representing a
decrease of approximately RMB1,520 million as compared to RMB4,110 million in
the first quarter of 2008. If the international oil price do not fluctuate
dramatically, it is expected that the aviation fuel cost of the Company
throughout 2009 would be lower than that of RMB18.4 billion in
2008.
As a
result of the above, the Company believed that the aviation fuel hedging
contracts would have reduced the risk incurred as a result of the fuel
fluctuation.
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2.
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Interest
Rate Swaps
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The
interests incurred from the liabilities of the Company denominated in US dollar
fluctuated in line with the increase or decrease of the short-term interest rate
of the market. The Company’s capital cost would increase when the short-term
interest rate (3 month LIBOR and 6 month LIBOR) rose. The Company has locked in
certain interest rates of the long-term liabilities denominated in US dollar
(aircraft financing) for the purpose of maintaining the interest rates of such
liabilities at a stable level in order to prevent the fluctuation of the cost of
interest. In 2008, the decrease in the LIBOR of US dollar resulted in the
unrealised settlement losses in the hedging of interest rate,
however, the interest cost of the Company’s liabilities with variable interest
rates (approximately 80%) would be significantly reduced.
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3.
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Forward
Foreign Exchange
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As the
Company has large amount of income and payment denominated in Japanese Yen and
US dollar respectively, the income denominated in Japanese Yen would generally
be converted to US dollar for the payment of various costs and expenses. When
the exchange rate for US dollar against Japanese Yen rose dramatically, the
income denominated in Japanese Yen convertible to US dollar would be reduced. To
eliminate the adverse impact on the Company arising from the exchange rates
fluctuation, the Company has locked in the exchange rate of US dollar to
Japanese Yen by forward foreign exchange contracts, which enabled the Company to
sell Japanese Yen and buy US dollar at fixed prices. The exchange rate for
Japanese Yen against US dollar was strong in 2008, leading to certain unrealised
settlement losses in foreign currency hedging, yet the non-hedge portion (82%)
of Japanese Yen would enjoy the advantages of the appreciation in Japanese
Yen.
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II.
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The
Decision-making Procedures of the Company Regarding the Businesses
Measured at Fair Value
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The
eighteenth general meeting of the fourth session of the board of directors of
the Company (the “Board”) which was held on 10
April 2006, approved the setting up of the financial risk management committee,
authorized the President to take up the responsibility of financial risk
management of the Company and established relevant policies and workflow. On 1
February 2008, the Board held the first regular meeting for 2008 to approve that
the 2008 financial risk management authorization to be executed by the Chairman
on behalf of the Company, and to authorize the approving personnel and dealers
in respect of financial risk management.
The
specific decision-making procedures of the Company regarding the businesses
measured at fair value are set forth as follows: First, the dealers will track
the performance of the market, analyze and assess the market, and tender the
transaction proposal to the financial risk management personnel for approval.
Upon the independent analysis and assessment made by the financial risk
management personnel, if the proposal met the basic requirements of the Company
and the accumulated transaction volume within the authorization of the Company
and the risk of that are acceptable to the Company, the risk management
personnel will grant a written approval to the transaction proposal and submit
it to the relevant authorized personnel, namely the President, the Chief
Financial Officer, the President or Vice President of the finance department,
for their approval. After taken consideration of the reporting by the dealers
and the financial risk management personnel, the relevant authorized personnel
would, based on the evaluation of the market and the knowledge of the overall
risk of the Company, determine whether the transaction should be proceeded or
not within their authorization. Upon approval by the relevant authorized
personnel for the relevant transactions, the dealers will make a deal by
selecting the most favorable price after price enquiry in the
market.
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By
order of the board of the directors of
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CHINA EASTERN AIRLINES CORPORATION LIMITED
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Luo Zhuping
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Director and Company Secretary
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The
directors of the Company as at the date of this announcement
are:
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Liu
Shaoyong
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(Chairman)
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Li
Jun
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(Vice
Chairman)
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Ma
Xulun
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(President,
Director)
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Luo
Chaogeng
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(Director)
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Luo
Zhuping
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(Director,
Company Secretary)
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Hu
Honggao
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(Independent
Non-executive Director)
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Peter
Lok
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(Independent
Non-executive Director)
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Wu
Baiwang
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(Independent
Non-executive Director)
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Zhou
Ruijin
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(Independent
Non-executive Director)
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Xie
Rong
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(Independent
Non-executive Director)
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Shanghai,
the People’s
Republic of China
12 May
2009