Trading in China Eastern Airlines and Shanghai Airlines shares on the Hong Kong Stock Exchange were suspended on Monday amid reports of a merger between the two Chinese carriers.
The airlines have received government permission to merge and an announcement is imminent, according to the South China Morning Post. Officials from both airlines were not available for comment.
"We received instructions from the government on Saturday about the consolidation," Shanghai Airlines' vice president Feng Xin was quoted by the newspaper as saying from the IATA annual general meeting in Kuala Lumpur.
China Eastern had said in April that it had not made any progress concerning the merger, which the Chinese government has been pushing. Both carriers have received bail-out money to reduce their debt from the government, which is keen to see some consolidation in the sector amid rising costs and increasing losses.
Source: Air Transport Intelligence news
