CAAC clears China Eastern-Shanghai merger

CAAC last week approved China Eastern Airlines' acquisition of Shanghai Airlines, according to CEA GM Ma Xulun.

The merger still requires the approval of both carriers' shareholders, but CEA said it has started the merger process and expects the transaction to be completed by year end (ATWOnline, Aug. 10). A shareholders conference is planned for Oct. 9 to consider and vote on the merger and approval is expected.

"The total fleet of CEA and SAL is more than 300 aircraft, so we plan to make a more reasonable utilization of these aircraft during winter and spring flight schedules," Ma said. He revealed that CEA plans to promote Express Air Service to denote high frequency on the 22 routes the carriers share. "On some routes the daily frequencies will be boosted to 14. That is, a flight will be operated every half hour," he said.

Huang Bin, board secretary for Beijing-based Air China, said, "CEA's merger with SAL will definitely change the competition scenario of the Shanghai air transport market." But he affirmed that it won't affect CA's determination to make Shanghai its international gateway.

He added that CA will "accelerate the preparation process with Cathay Pacific Airways to launch a cargo JV based in Shanghai" (ATWOnline, Jan. 4, 2008). CA VP Fan Cheng told reporters last week that the asset valuation for the JV is "nearing an end," paving the way for it to be launched by year end.