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CAAC Pushes Airline Consolidation
China will consolidate its airline industry by establishing three major airline groups that would be built around the nation's three major carriers - Air China, China Eastern Airlines and China Southern Airlines, a top official with the Civil Aviation Administration of China (CAAC) said Friday.
Ma Tiesheng, director of CAAC's General Affairs Office, said along with the three major carriers, seven smaller airlines would be merged into the new airline groups.
The move is intended to strengthen the industry.
Each group will have assets of approximately 50 billion yuan (US$6.04 billion), Ma said.
The seven other airlines involved in the merger are China Southwest Airlines, China Northwest Airlines, China Northern Airlines, Xinjiang Airlines, Yunnan Airlines, Great Wall Airlines and Zhejiang Airlines. All are under the direct control of CAAC.
Ma said CAAC is holding talks with the smaller airlines on the details of the merger.
"CAAC will just help usher in the merger process and will not force any airline to join any particular group," Ma said.
Each of the smaller airlines will be able to select which major airline group it will join, Ma added.
"CAAC will not be directly involved in any of the group managements after the merger. We will focus on policy-making and the industry's general administration in the future," Ma said.
Xia Xinghua, director of the Department of Policies and Regulations under CAAC, said CAAC hopes that the merger can be completed within the year.
CAAC will offer preferential policies - for example, more flights along certain routes - to the three newly formed airline groups, Xia said.
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