China Eastern Airlines Co Ltd signed a strategic cooperation agreement with China Airlines, Taiwan province's premier airline on Tuesday to extensively cooperate on cargo flights, passenger flights, logistics, aircraft maintenance and marketing.

According to China Eastern Chairman Liu Shaoyong, the two carriers will extend their cooperation to some key areas such as code sharing.

"That means, when passengers take flight from China Eastern, they will also be receiving service from China Airlines," Liu added.

The two airliners' cooperation can be traced back to January 2003, when they provided service for the first charter flight across the Taiwan Straits for the Chinese New Year.

In addition, their cooperation will also boost the service quality of flights across the Straits during the World Expo, which runs from May 1 to October 31, Liu said.

In recent years, cross-strait trade and passenger numbers have grown rapidly.

A total of 5.41 million passengers traveled between Taiwan province and themainland over 2009, up 16.3 percent year-on-year.

About 3.12 million passengers chose to travel by air, and the mainland airliners handled 1.23 million passengers, up 590 percent over 2008.

In 2009, China Eastern flew 425,000 passengers to and from the mainland to Taiwan, up 524.4 percent from a year earlier.

China Airlines currently flies to 89 destination cities in 29 countries, and has a fleet of 66 aircraft, including 46 passenger jets and 20 freighters.

Meanwhile, speculation is rife on which of the world's three airline alliances will win China Eastern's favor.

Currently the Shanghai-based carrier is the last of the nation's three major airlines without membership in any alliance.

Despite wavering for several years, China Eastern is now ready to make its final choice at the end of April, said Liu.

"We will tell you which airline alliance we will enter by the end of April," Liu told the press on Tuesday.

After an impressive tie-up with its former local rival Shanghai Airlines, China Eastern Airlines has made joining one of the three international airline networks - Star Alliance, Sky Team, or Oneworld - a priority.

Analysts point out that being an alliance member is a wise choice for China Eastern, which will help it explore international markets and bolster its brand image.

"We can share our abundant resources within the alliance, creating convenient services for passengers while building an international network," Liu said.

Sources close to China Eastern said the three alliances are all lobbying China Eastern to sign up.

"We are in negotiations with some alliances, but the final agreement cannot be made until we balance the benefits against disadvantages carefully," an anonymous official from the carrier said.

No matter which alliance China Eastern chooses to join, it will impact the competitive aviation arena.

With both Shanghai Airlines and Air China in the Star Alliance, the two carriers share a lot of resources in terms of customers, flight connections and bookings.

"But considering its bitter rivalry with Air China, China Eastern is less likely to join Star Alliance," said Gao Shiliang, an analyst from Central China Securities.

In addition, Shanghai Airlines' cooperation with Air China may come to an end if its parent company China Eastern chooses other alliance, added Gao.

Some analysts expected Liu to join the Sky Team, but Gao said it is better to choose another alliance due to competing relations between China Southern and China Eastern.

"Oneworld will be China Eastern's final choice, although it is smaller in size than the other two.

But it also has stellar members like American Airlines, British Airways, Canadian Airlines and Cathay Pacific," Gao noted.