CHINA AIRLINES' (CAL) largest shareholder, China Aviation Development Foundation, is to reduce its share in the Taiwan carrier from 82%, to just over 50%. CAL's stock price rose sharply on the news, sparked by speculation that mainland Chinese investors may buy shares.

The rumour of Chinese interest has been fuelled by the Taipei visit of Wang Guixing, president of China National Aviation and chairman of Dragonair and Air Macau. Both these airlines enjoy privileges in transporting Taiwanese passengers to the mainland.

Meanwhile, China Airlines will purchase a 33% stake in domestic carrier Formosa Airlines. CAL says that the airline wants to keep pace in the domestic market with rival EVA Air, which holds shares in three domestic airlines.

Source: Flight International

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