Top airline official disagrees with mergers
The director of China’s top aviation regulation body for the first time expressed “his personal view” opposing possible mergers among the country’s major state-owned carriers as “competition is essential to the market.”
“I personally disagree with the potential mergers and acquisitions between three major domestic carriers because the Chinese aviation market could not only hear one voice,” Yang Yuanyuan, director of the administration the General Administration of Civil Aviation, said yesterday in Beijing.
His remarks came as rumors suggest Air China Ltd, China Eastern Airline Corp, and China Southern Airline Corp, may seek a merger to fend off increased rivalry from home and abroad.
“None of the three carriers is now up to managing a super airliner if the merger proceeds,” Yang explained. “Besides, a merger at an improper time will do nothing good for passengers as well as the industry itself.
“There should be competition among the three airlines, which is also a key to the country’s development of its civil aviation industry,” Yang added.
Yang’s “personal attitude” may be a blow for Li Jiaxiang, chairman of Air China, who said in late September that the nation’s largest international carrier was seeking to be “world class” through a tie up with its home rivals as “a reshuffle of domestic airlines was necessary to survive market invasions by foreign carriers.”
Air China Group, the parent of Air China, has raised its holdings in Hong Kong-listed China Eastern Airline Corp several times this year. The company, together with Cathay Pacific Airways Ltd, embarked a bidding war for China Eastern in September to block Singapore Airlines’ takeover of a 24 percent of share of China Eastern, which is the country’s third-biggest carrier.
However, China Eastern and China Southern have different thoughts about the merger.
Li Fenghua, board chairman of China Eastern told Xinhua news agency early this month that a merger of the three carriers would not be encouraging for a “benign competition environment for a big country such as China.”
His reply echoed the comments of Liu Shaoyong, chairman of China Southern Airlines, the country’s biggest carrier, who said yesterday that his company will not tie up with any other airlines.
Tags: Air-China, Airways, Aviation
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