NICHOLAS IONIDES / SINGAPORE
Media claims carriers are arguing over details, but aviation authority denies setbacks
The restructuring of the Chinese airline industry has been delayed by disputes between carriers due for merger. But the authorities insist that the merger of 10 carriers into three massive groups will still go ahead this year.
According to state-run media reports, flag carrier Air China and China National Aviation (CNAC), owner of Zhejiang Airlines, are fighting over who will control Zhejiang following consolidation. They also report that China Eastern Airlines is unwilling to take on China Northwest Airlines' 3 billion yuan ($362 million) debt.
However, the Civil Aviation Administration of China (CAAC) has denied the reports, saying the claims of serious problems are "totally groundless", and that full details should be worked out in the first half of this year.
Senior CAAC official Ma Songwei says that rumours have been fuelled by delays in negotiations between some of the carriers. He claims that "everything is going well in the merger and the CAAC will only help push it forward, not disrupt the process". Agreements being finalised by the airlines are "still keeping up with the CAAC's original plans", he adds.
Authorities have for years been calling on the country's more than 30 carriers to merge, saying unnecessary competition has badly hurt the indigenous industry.
In mid-2000, the CAAC ordered the 10 airlines under its direct "control and administration" to consolidate into three groups, headed by Beijing-based Air China, Shanghai-based China Eastern and Guangzhou-based China Southern Airlines.
Basic merger agreements were approved by the CAAC in April. The State Development Planning Commission is assessing the airlines' plans and will seek final approval from the State Council.
Under the plan, Air China will take over China Southwest Airlines and CNAC; China Eastern will acquire China Northwest, Great Wall Airlines and Yunnan Airlines; and China Southern will take over China Northern Airlines and China Xinjiang Airlines. China Eastern has already completed its takeover of Great Wall while China Southern reports good progress.
Source: Flight International
