Air China was outbid last week by two Chinese investment firms in an auction for a 65% stake in Shenzhen Airlines. Yi Yang Group subsidiary Bright Oceans Corporation and Shenzhen Huirun Investment submitted a joint bid of 2.72 billion yuan ($329 million) for the stake formerly held by Guangdong Development Bank Holding Group. Air China was hoping to increase its 20% stake in Shenzhen Airlines to boost its share of the domestic market. Rival China Southern Airlines, whose fast growth in recent years has been partly driven by the acquisition of smaller carriers, is currently the largest domestic airline in China. In addition to the 25% stake still controlled by Air China and the 65% stake now controlled by a joint venture company owned by Bright Oceans and Shenzhen Huirun, Shenzhen-based firm Total Logistics owns the remaining 10% of Shenzhen Airlines.

Source: Flight International