Andrzej Jeziorski/SINGAPORE
China Airlines (CAL) is poised to announce a decision on the proposed merger of its two subsidiary carriers, Formosa Airlines and Mandarin Airlines.
The CAL board is to meet early this month to consider implementing the merger by August, instead of the planned June deadline. The move is expected to be approved since it falls in line with the Taiwanese Government's policy towards consolidation in the local industry.
At the same time, the US American International Group (AIG), which owns leasing company International Lease Finance, has expressed interest in buying a stake in CAL. AIG chairman Maurice Greenberg is expected to meet shortly with Taiwan's government-owned China Development Bank, which wants the insurance group to join a bid for 36%of CAL. The 71% shareholder China Aviation Development Foundation (CADF) plans to sell this in a single tranche.
CADF says AIG would make a credible investment partner, but it believes that a strategic link with an airline is required to bring with it the expertise to shake up CAL's operations and polish its image.
Under the merger plan proposed last year, Formosa would be absorbed into Mandarin. CAL's domestic Taipei-Kaohsiung service would then be transferred to the merged airline, while Mandarin's Boeing 747s and MD-11s, along with its international routes, would be taken over by CAL.
CAL plans to sell Mandarin's two 747SPs this year. The airline is to convert its two remaining 747-200s to freighters by mid-year, while its Airbus A300B4s and MD-11s are being phased out in the longer term.
By the end of the year, CAL will have a fleet of 13 747-400s, 10 Airbus A300-600Rs and 10 Boeing 737-400s, all of which are to remain in service in the restructured fleet. The A300B4s and MD-11s will be replaced by a new medium- to long-range aircraft in the Boeing 777/Airbus A330/A340 category. This new acquisition has been delayed by CAL's continuing financial difficulties.
Source: Flight International
