NICHOLAS IONIDES / SINGAPORE
China Southern Airlines, Shandong Airlines and Shanghai Airlines are taking over Sichuan Airlines in a move that is in line with government calls for consolidation (Flight International, 23-29 July). Guangzhou-based China Southern, the country's largest carrier, will pay 136.5 million yuan ($16.5 million) for a 39% stake. Shanghai Airlines and Shandong Airlines will each take 10% stakes, while catering company Chengdu Gingko Restaurant will take 1%.
A new company, NewCo, will take over the airline's assets. Sichuan Airlines will take a 40% stake in NewCo by transferring its assets to it. Sichuan will provide an office building at Sichuan Chengdu International Airport, plus its five Airbus A320s, two Airbus A321s, five Embraer ERJ-145s and a Chinese-built Xian MA-60.
The Chinese government has been calling for mergers among the country's more than 30 airlines for some time. Two years ago, the Civil Aviation Administration of China said the 10 airlines it controlled would merge into three groups headed by Air China, China Eastern Airlines and China Southern. China Southern says the Sichuan buy-in will allow it to grow in the developing southwest China market.
Source: Flight International
