China Southern Airlines, Shandong Airlines and Shanghai Airlines are in talks to take joint control of Sichuan Airlines.
China Southern and Shandong are thought to be negotiating to buy 40% and 8% of Sichuan respectively, while Shanghai Airlines' interest is unclear.
A deal is hoped to be firmed up following Civil Aviation Administration of China (CAAC) approval. The CAAC has long called for Chinese airline consolidation. The deal is expected to lead to closer ties between China Southern and the semi-independent second-tier airlines. Codeshare deals are expected.
Collaborating with China Southern could help Shandong and Shanghai Airlines take on China Eastern Airlines.
Under China's sweeping state-ordered consolidation, Air China, China Eastern and China Southern are taking over seven other CAAC-controlled airlines. Second-tier carriers are also merging to better compete against the enlarged majors.
Source: Airline Business
