Air China's takeover of Shenzhen Airlines taking shape

Air China appointed former CA President Cai Jianjiang chairman of Shenzhen Airlines, signaling that its plan to take control of Shenzhen is coming to fruition.

It also named CA VP Feng Gang president of Shenzhen. CA recently announced that it was investing CNY682.1 million ($100 million) to increase its share in Shenzhen to 51% and gain majority control (ATWOnline, March 31). Government approval of the bid is still not official, but CA executives already are talking positively about the "merger" of the two carriers.

Chairman Kong Dong said "eight working groups" are busy "combining" CA and Shenzhen and the "merger" is going "quite well." He added that "synergy" between the carriers will be evident by next month. He emphasized that CA won't marginalize Shenzhen but will seek to maximize synergies between the pair. "Just like our merger with Shandong Airlines, we have optimized our route network and marketing resources," he explained.

Last month the Beijing-based carrier signed a cooperation memorandum with the Shenzhen municipal government under which CA promised to keep Shenzhen Airlines' name and logo.