The dismissal of Zhou Liguo follows the firing of two other deputy general managers who are being investigated by local authorities for alleged corruption.

Zhou, deputy general manager, was removed from his post, the Shanghai-based company said in a statement to the Shanghai Stock Exchange on Wednesday, without revealing reasons.

In October, deputy general managers Wu Jiuhong and Tong Guozhao were axed and probed on suspicion of taking bribes of more than 10 million yuan (US$1.28 million) at the airline's cargo division.

The China Business News said yesterday that Zhou, former general manager of China Eastern, might be related to the corruption case and had been restricted from travelling abroad earlier, quoting unidentified sources.

Zhou, also the chief economist of China Eastern, was originally a pilot. He joined the company in 1988 and served as general manager and deputy Party secretary of China Cargo Airlines between 2000 and 2003.

The company refused to comment on the issue yesterday.

China Eastern, the nation's third largest airline, is competing with two other major carriers Southern Airlines and Air China nationwide. It has witnessed frequent senior management changes in the past months.

It nominated Fan Ru as deputy general manager in charge of flight business in August. One month earlier Cao Jianxiong had been appointed general manager when former executives Luo Chaogeng and Wan Mingwu were stripped of their duties.

The frequent personnel replacements come on the heels of the airline's heavy losses between January and June.

In August, the Shanghai-based carrier posted a net loss in the first half of 2006 of 1.46 billion yuan (US$187 million), while its fuel costs rocketed 86 per cent year-on-year on the back of rising fuel prices and an expansion of its fleet.

Even though the company managed profits of 491 million yuan (US$63 million), it still reported a loss of 970 million yuan (US$124 million) for the first nine months of 2006, and estimated a negative growth for the whole year.

To stave off the impact of soaring fuel prices, the cash-strapped company has gone as far as cutting the number of in-flight magazines to reduce redundant weight and save fuel.

The company has also established an airline operations control (AOC) system to enhance overall efficiency.

Other measures to cut costs include urging pilots to fly higher to reduce air pressure and to close down unnecessary equipment during flights. The company has also introduced an awards system to encourage staff to suggest cost-saving measures.

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