China – Aviation Footnotes

The Chinese aviation market continues to expand at a significant pace, although consolidation appears to be the game which airlines are playing.

Consolidation of China airline market

• In February, Air China Limited and Cathay Pacific Airways Limited signed a framework agreement to establish a jointly owned cargo airlines company. This is Air China Cargo and it will operate from Shanghai.
• In March, Air China, the country's flag carrier, unveiled a takeover of Shenzhen Airlines in a move that amounted to a re-nationalisation of the beleaguered private airline, whose owner and senior executives were under investigation for unspecified economic crimes.
• China Eastern Airlines ("CEA") and Shanghai Airlines have recently merged and analysts have reported that CEA has applied for additional funding to build a closer relationship with Guangzhou-based China Southern Airlines. CEA has also announced that it is joining Skyteam, which China Southern Airlines is a member