Andrzej Jeziorski/SINGAPORE
The Civil Aviation Administration of China (CAAC) has revealed details of the planned consolidation of the 10 carriers under its charge into three merged entities.
Reports in China's official press say Air China will take over China Southwest Airlines and CNAC-Zhejiang Airlines, that China Eastern will take over China Northwest and Great Wall Airlines and that China Southern will absorb China Northern Airlines, China Xinjiang Airlines and Yunnan Airlines.
The plan is still regarded as a draft, and follows the CAAC's call earlier this year for radical consolidation moves among the country's 30-plus carriers.
Since the CAAC's last statement, numerous takeover plans have been revealed involving CAAC and non-CAAC carriers. China Southern's intended takeover of China Xinjiang had already been revealed, as had a possible move for the much larger China Northern. China Eastern's merger talks with Great Wall were also public knowledge.
China Southern, like China Eastern, is listed on both the Hong Kong and New York stock exchanges. It is the country's biggest carrier and the mergers would allow it to reinforce this position, particularly as it is in-line to take over relatively well-regarded airlines. Analysts say, however, that China Eastern could have more trouble with its take over of China Northwest, a relatively large, but financially weak, carrier.
Non-CAAC carriers have also been moving towards mergers, in a bid to survive an anticipated second wave of forced consolidation. Mergers have been announced by Hainan Airlines, which has taken over Changan Airlines, and Shandong Airlines, which is moving to acquire Shanxi Airlines. China Southern parent Southern Air Group has also recently taken over Zhongyuan Airlines.
Source: Flight International
