China Eastern Airlines plans to co-operate with Sinotrans in air cargo services, according to a source quoted by China Business News.

Currently, both China Eastern and Sinotrans run air cargo businesses. China Eastern has a controlling stake in China Cargo Airlines, while Sinotrans is an investor in Grandstar Cargo International Airlines, which was established in December 2007 by Sinotrans Air Transportation Development and Korean Air.

According to the report, Sinotrans will seek to make use of China Eastern’s air transport capacity through co-operation. In August, it signed a strategic cooperation agreement Air China.

In a separate development, China Eastern said it would complete its acquisition of Shanghai Airlines by the end of 2009. In July, China Eastern announced the purchase of smaller rival Shanghai Air via a US$1.32bn share swap that would give it about half of Shanghai’s air travel market.

Liu Shaoyong, chairman of China Eastern, said that the rights issue and the transaction would be completed by the end of this year. He added that the airline was open to taking in foreign strategic investors.