Ctrip Takes a Ride on China Eastern

(WSJ) Online travel sites and airlines aren't normally the best of friends, with lots to fight over in terms of commissions and the like. It is notable then that China's biggest online booking site, Ctrip.com International, has agreed to take a 3 billion yuan (460 million) chunk in state-owned carrier China Eastern Airlines.

The two companies said they will cooperate on budget airlines, e-commerce and technology. 

Ctrip.com, which already owns stakes in two major hotel companies and a car rental firm, may be after deeper access to China Eastern's reservation system.

But what Ctrip may want most is a ceasefire between Qunar, its subsidiary, and the state-owned carrier. China Eastern and other airlines have staged a boycott against Qunar due to customers' complaints regarding tickets booked on the website. Qunar works as an online platform between travelers and third-party agents – that sometimes means unpredictable service for customers, according to the airlines.

Qunar vowed to clean up the agent market. Perhaps Ctrip's cash investment will convince China Eastern about its sincerity.

Source: Wall Street Journal Jacky Wong

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