Quote from another website:
Today Hong Kong's South China Morning Post revealed that CX's parent company, Swire Group, is in talks with Air China which could see the Hong Kong airline itself taken over by the Chinese national airline.
Under the deal, as it is understood, Hong Kong's two main airlines, Cathay Pacific and Dragonair, in which both Swire and Air China have a stake, will be merged into a new consolidated Air China group. In returns, Swire will receive shares of the new group and emerge as its single largest shareholder to place executives at the core of the company's operations.
Sources suggested a deal could be announced within two weeks. "A deal is very close to being completed. The 10 per cent investment in Air China by Cathay [in November] was the first step in cementing a relationship," said a senior Swire executive. "Cathay has successfully fought for a small share of the Beijing-Hong Kong and Shanghai-Hong Kong routes, but that is not enough. It knows that it will need full integration into the market."
It is estimated that Cathay's market value is at HKG$48 billion, compared to $26.6 billion for Air China.
A consolidation of the three carriers would create the world's largest airline by market value and an Asian powerhouse that could feed an international customer base into greater China's most comprehensive route network. It would also allow the airlines to rationalise their route networks and reduce overhead costs on sectors such as Hong Kong-Beijing.
http://www.scmp.com/topnews/ZZZ510E456E.html