But Luo said "the company had received negative monthly growth of market demand from April to June, which used to be the busiest season for the aviation market."

Luo added that the market demand growth in January was over 10 percent, but quickly slid to 3 percent in February and 2 percent in March.

"Injecting capital, no matter by merger or other ways, can help us tide over the difficult time," he said.

China Eastern and Shanghai Airlines denied the talks on a possible merger last week, responding to media reports that State asset regulators were considering combining the two. "We have not considered the merger with Shanghai Airlines, and have not talked about this with other domestic carriers," said Luo.

"Merging with domestic carriers is just a resource synergy, but our urgent task at the moment is to improve the services by introducing the world's leading management experience," Luo added.

A shares of China Eastern tumbled 1.4 percent to close at 7.72 yuan yesterday.

(China Daily July 30, 2008)