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 January 2009.
Commission
File Number: 001-14550
China
Eastern Airlines Corporation Limited
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 o 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): o
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): o
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: o 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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January 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.
The
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong
Limited take no responsibility for the contents of this document, make no
representation as to its accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon the
whole or any part of the contents of this document.
(A
joint stock limited company incorporated in the People’s Republic of China with
limited liability)
(Stock
code: 670)
Announcement
in relation to Aviation Fuel Hedging Activities
and
2008
Results Warning
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This
announcement is made by China Eastern Airlines Corporation Limited
pursuant to Rule 13.09(1) of the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited.
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Part
I Aviation Fuel Hedging Activities
As the
global financial crisis further deteriorated and the international crude oil
price continued to plummet, the closing price of the West Texas Intermediate
(WTI) crude oil on the New York Mercantile Exchange was US$44.60 per barrel on
31 December 2008. As at 31 December 2008, China Eastern Airlines Corporation
Limited (the “Company”) incurred an actual cash loss of US$14,150,000 from the
settlement of the current aviation fuel hedging contracts in that month. Based
on the preliminary estimates of the Company, the fair value loss on the aviation
fuel hedging contracts of the Company as of 31 December 2008 was approximately
RMB6.2 billion (unaudited). The actual payment of compensation by the Company
hitherto will not have significant impact on the cash flow of the
Company.
At the
request of the Shanghai Stock Exchange, the Company hereby makes the following
supplemental explanations: the purpose of engaging in aviation fuel hedging
activities is to lock in the fuel costs of the Company. The key structure of the
aviation fuel hedging used by the Company comprises buying call options and
simultaneously selling put options. Under the circumstances of a bullish market,
this structure is used mainly to hedge the high premiums of buying call options
through selling put options. This is associated with the risk of having to make
up the loss when the spot prices of aviation fuel dropped below the specified
lower limits of the put options. When the spot prices of aviation fuel drops
below those specified lower limits, the Company, as an end user of aviation
fuel, would be obliged to make payment under the hedging contracts on the one
hand and be benefited by the lowered purchase prices of spot aviation fuel on
the other. Therefore, the losses incurred by the hedging contracts can be offset
to some extent while the ultimate purpose of the aviation fuel hedging
activities is served. The Company strictly follows the “Corporate Accounting
Principles - Hedging Activities” regarding the accounting treatment of fuel
hedging transactions. The revenue generated from fuel hedging transactions is
used to offset spot aviation fuel cost. The fair value of transactions that do
not fall within the accounting treatment for hedging activities will be directly
recorded in current profit or loss. Based on self-inspection by the Company, the
annual transaction value of the fuel hedging activities of the Company did not
exceed the actual oil consumption of the Company for that year, which is in
compliance with the regulations of the Company, the authorization of the board
of directors and the historical information disclosure of the
Company.
Part
II 2008 Results Warning
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1.
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Estimated
results for the year
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1.
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Period
to which the estimated results apply: 1 January 2008 to 31 December
2008;
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2.
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Estimated
results: significant loss will be recorded for the Company in
2008;
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3.
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The
estimated results have not been audited by certified
auditors.
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2.
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Results
of the corresponding period in the last year (1 January 2007 to 31
December 2007)
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1.
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Net
profit attributable to equity holders of the Company: RMB586
million;
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2.
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Earnings
per share: RMB0.12.
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3.
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Explanation
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1.
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The
Company recorded a loss of approximately RMB2.292 billion and a gearing
ratio of 98.49% in the first three quarters of 2008, reflecting the heavy
financial burden it suffered. A pronounced global economic recession since
the second half of 2008 led to a drastic decrease in air transportation
demand. As a result, the civil aviation industry is facing an
industry-wide crisis. In addition, the fourth quarter is the traditional
off-season for the aviation industry. It is anticipated that the Company
will suffer significant operating losses in
2008.
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2.
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The
loss of fair value in the aviation fuel hedging contracts of the Company
as at 31 December 2008 will affect the profit or loss of the Company in
2008 in the amount of approximately RMB6.2
billion.
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4.
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Other
related matters
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The board
of directors of the Company wishes to remind investors to consider the risks
involved and be cautious in making investment decisions.
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By
order of the Board
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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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Li
Jun
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(Vice
Chairman acting on behalf of the Chairman,
Non-executive
Director)
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Li
Fenghua
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(Non-executive
Director)
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Luo
Chaogeng
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(Non-executive
Director)
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Cao
Jianxiong
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(Executive
Director)
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Luo
Zhuping
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(Executive
Director)
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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
9 January
2009