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Major airlines merge
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HEAD of China's aviation industry regulator has comfirmed on Friday that nine airlines under its administration have agreed to merge into three large groups.
This was a big leap towards the Civil Aviation Administration of China (CAAC)'s goal of making domestic carriers competitive against theri international peers, analysts said.
CAAC head Liu Jianfeng was quoted as saying unlisted Air China would merge with China Southwest and Zhejiang Airlines into a group valued at 56.05 billion yuan (US$6.77 billion) in assets as part of a restructuring of the industry.
China Eastern would absorb China Northwest and Yunnan Airlines, while China Southern would tie-up with Northern Airlines and Xinjiang Airlines.
While senior airline executives have repeatedly said the mergers were not directed by the CAAC and were based on “commercial principles" and negotiations, they have to be submitted to the industry watchdog for approval. The airlines are expected to carry out further negotiations with their merger partners to iron out the final terms.
Meanwhile, the CAAC has decided to merge four other peripheral aviation companies into two groups to boost efficiencies.(SD-Agencies)
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