China's sweeping airline consolidation is continuing with Hainan Airlines acquiring Shanxi Airlines in a deal approved by state authorities.

The new Shanxi Airlines Company, based in Taiyuan, will be majority owned by Hainan, with Shanxi Airlines and Hainan-subsidiary Changan Airlines holding small stakes. Hainan will contribute most to the deal, including cash and aircraft. Shanxi Airlines will supply some assets.

Hainan is aggressively seeking to expand through take-overs of smaller airlines to compete against the "big three" carriers - Air China, China Eastern and China Southern.

Over the past year Hainan has also acquired Changan Airlines and China Xinhua Airlines, allowing it to expand its domestic feeder network prior to the launch of international services.

Source: Flight International