A China Eastern Airlines' aircraft at Kunming International Airport. The carrier's revenue rose to 85.6 billion yuan ($13.8 billion) last year. [Provided to China Daily]

Carriers must look at multiple, diversified platforms to stay afloat, says top executive

"You can choose anything but aviation as your career choice" are not the words you would normally associate with an aviation industry expert. But Ma Xulun, general manager of China Eastern Airlines Co Ltd, seems more than justified when he makes this remark after more than two decades of service in an industry that has often been buffeted by severe bouts of turbulence.

During his long stint, which included time at China's flagship carrier, Air China Ltd, as president, Ma has seen many ups and downs in the aviation business, especially due to global upheaval.

"It is the stress that really takes its toll," 49-year-old Ma said, pointing to his fast-graying hair, in what is essentially a "high risk, high cost, but low return" job.

"Sound sleep is something that I often crave. But with my business so closely tied up with thousands of people's lives, I know that it is a dream and I need to be awake always," he said.

Ma's fears are not unfounded. The global aviation industry has been going through its worst phase, with sluggish demand and high fuel costs severely denting profit margins.

The airlines sector managed to eke out a meager 1 percent growth in profit last year, according to the International Air Transport Association.

However, China Eastern has managed to buck the global trend. Not only is it working above the global average, but managed to clock revenues of 85.6 billion yuan ($13.8 billion), and profit of 3.43 billion yuan last year. The company's revenue and profit in 2011 was 83.97 billion yuan and 3.6 billion yuan respectively. Much of the credit for the carrier's success can be attributed to the hands-on and deft approach pioneered by Ma.

That, however, was not the case five years ago when Ma joined China Eastern. It was the worst possible time for someone to take the helm of a sinking ship. The carrier was reeling from a financial crisis after its debt-to-asset ratio hit a historic high of 115 percent.

"There was severe turbulence and churn in the aviation industry during those days. There were three major hurdles in the form of high oil prices, negative growth in cargo business, and the stagnant global economy, especially in Europe," he said.

Ma said that the first priority for China Eastern was to reduce its huge debts. "We took several steps like market borrowings, capital injection from government and enhancing profits," he said.

In 2009, the carrier also undertook a painful restructuring by merging with the then cross-town competitor Shanghai Airlines, in a bid to optimize assets and trim debt.

Despite all the efforts, Ma still found it hard to find other sources of income. It was then that he started the campaign to expand China Eastern's overseas routes.

That seems to have more than paid off as more than 47 percent of the airline's revenue now comes from international business, though as Ma admits a still higher percentage is required to gain a global reputation.

"Our vision is to build China Eastern into a world-class airline. We want to realize this goal by fully leveraging on Shanghai's geographic advantage as a transportation hub," he said.

Ma has already sensed an opportunity. From this year, Shanghai has allowed transit passengers from 45 countries to stay in the city for 72 hours without a visa.