newswatcher
11th Oct 2002, 14:09
From the BBC(11/10):
"China's nine biggest airlines are to merge and shares in Air China, the flagship international carrier, will be listed on international stock markets. The airlines will be consolidated into three major new international players, Air China, China Southern Airlines and China Eastern Airlines. The carriers will control about 80% of the domestic market and almost all international routes.
China's airlines have bucked the global industry slump after the 11 September attacks in the US last year and are reporting record bookings from an increasingly wealthy and mobile population. Despite the good prospects for the Chinese aviation sector, Shanghai Airlines, China's sixth largest carrier by traffic volume, made a weak debut on the stock market when its shares were listed on Friday.
Chinese state media reported that the airline restructuring had been passed by China's cabinet months ago, but the formal announcement had taken longer than expected. Two fatal crashes earlier this year which claimed 241 lives are thought to be the reason for the delay.
Flag-carrier Air China will merge with China Southwest Airlines and China National Aviation, creating a company with 57.3bn yuan ($6.94bn) in assets, 22,000 employees, and 118 aircraft serving 307 routes. China National Aviation controls Zhejiang Airlines, based in the eastern province of Zhejiang and 43% of Hong Kong's second-largest airline, Dragonair. Air China said it plans to expand its fleet to more than 200 aircraft by 2010 and to eventually list on overseas stock markets.
China Southern Airlines, which is listed in New York and Hong Kong and is the mainland's largest airline, will merge with China Northern and Xinjiang Airlines.
China Eastern Airlines, which is also listed on the New York Stock Exchange, is to merge with Yunnan Airlines and China Northwest Airlines.
Shanghai Airlines' sale of its shares, valued at 1bn, saw the stock trade at a 33.8% premium of 7.13 yuan to it its list price. Usually, Chinese initial public offerings (IPOs) are heavily oversubscribed and double on their first day of trade.
"The structure of Shanghai Airlines' routes is one of the best among domestic airlines and its assets are good," said analyst Liu Jun of Haitong Securities.
The carrier is based in Shanghai, China's richest city and one of three aviation hubs. But the creation of the three giant carriers is likely to make it more difficult for Shanghai Airlines. Shanghai Airlines, which is 40.66% owned by the Shanghai government, operates 136 routes, mainly in China's mainland but also to Macau, Cambodia, Vietnam and Russia."
"China's nine biggest airlines are to merge and shares in Air China, the flagship international carrier, will be listed on international stock markets. The airlines will be consolidated into three major new international players, Air China, China Southern Airlines and China Eastern Airlines. The carriers will control about 80% of the domestic market and almost all international routes.
China's airlines have bucked the global industry slump after the 11 September attacks in the US last year and are reporting record bookings from an increasingly wealthy and mobile population. Despite the good prospects for the Chinese aviation sector, Shanghai Airlines, China's sixth largest carrier by traffic volume, made a weak debut on the stock market when its shares were listed on Friday.
Chinese state media reported that the airline restructuring had been passed by China's cabinet months ago, but the formal announcement had taken longer than expected. Two fatal crashes earlier this year which claimed 241 lives are thought to be the reason for the delay.
Flag-carrier Air China will merge with China Southwest Airlines and China National Aviation, creating a company with 57.3bn yuan ($6.94bn) in assets, 22,000 employees, and 118 aircraft serving 307 routes. China National Aviation controls Zhejiang Airlines, based in the eastern province of Zhejiang and 43% of Hong Kong's second-largest airline, Dragonair. Air China said it plans to expand its fleet to more than 200 aircraft by 2010 and to eventually list on overseas stock markets.
China Southern Airlines, which is listed in New York and Hong Kong and is the mainland's largest airline, will merge with China Northern and Xinjiang Airlines.
China Eastern Airlines, which is also listed on the New York Stock Exchange, is to merge with Yunnan Airlines and China Northwest Airlines.
Shanghai Airlines' sale of its shares, valued at 1bn, saw the stock trade at a 33.8% premium of 7.13 yuan to it its list price. Usually, Chinese initial public offerings (IPOs) are heavily oversubscribed and double on their first day of trade.
"The structure of Shanghai Airlines' routes is one of the best among domestic airlines and its assets are good," said analyst Liu Jun of Haitong Securities.
The carrier is based in Shanghai, China's richest city and one of three aviation hubs. But the creation of the three giant carriers is likely to make it more difficult for Shanghai Airlines. Shanghai Airlines, which is 40.66% owned by the Shanghai government, operates 136 routes, mainly in China's mainland but also to Macau, Cambodia, Vietnam and Russia."