Flag carrier Air China is finalising plans to take over China Southwest Airlines, which are expected to include the transfer of some international routes and its three Airbus A340-300s to the subsidiary.

Industry sources say Beijing-based Air China does not want to operate the three A340s, which it dry-leased to Cathay Pacific two years ago. The aircraft are due to be returned to Air China in the coming months but are expected to be handed over to Chengdu-based China Southwest.

China Southwest operates three A340-300s of its own, mainly on short-haul routes to the Chinese territory of Tibet. The sources say if it does not receive the Air China A340s and routes, it will also have to transfer some international routes as China Southwest's A340s are under-used.

Air China has been working to take-over China Southwest since a sweeping plan for airline mergers was approved by the Civil Aviation Administration of China (CAAC) and other government agencies earlier this year.

Under the merger plans, Air China will acquire China Southwest and China National Aviation (CNAC); China Eastern Airlines will acquire China Northwest Airlines, Great Wall Airlines and Yunnan Airlines; and China Southern Airlines will take over China Northern Airlines and China Xinjiang Airlines.

Air China has eight 107-seat Airbus A318s on firm order for delivery from 2003 but there is speculation that these will be transferred to CNAC-Zhejiang Airlines, which it will also control after its takeover of CNAC.

Sources say the Airbus transfer plan is being studied partly because Air China wants only Boeing aircraft in its mainline operation.

Source: Flight International