China is to allow up to 49% foreign ownership of the country's airlines in a sweeping industry overhaul.

Civil Aviation Administration of China (CAAC) minister Liu Jianfeng says the agency is seeking to have the limit eased from the current 35% level. The proposal requires state council approval, but this is expected soon.

"As long as China's firms hold majority shares, they should include more foreign investment," Liu says. The CAAC is working to transfer direct ownership of airlines to other government departments, and to focus solely on its regulatory role. The move is partly designed to aid the country's major carriers raise more cash to help them compete in the international market.

China Eastern and China Southern are already publicly traded overseas, while Air China has been seeking an international listing for years. Hainan Airlines, which claims to be the country's fourth-largest airline grouping when subsidiary carriers are accounted for, was the first Chinese carrier to be approved for foreign ownership. In 1995 an investment fund part-owned by US financier George Soros took a 25% shareholding, although this was diluted by a subsequent limited flotation.

Source: Flight International