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Cathay moves to stop SIA taking stake in China Eastern
HONG KONG – Cathay Pacific has moved to foil the attempt by Singapore Airlines to take a 24 percent stake in China Eastern, China’s third largest airline.
A day before China Eastern shareholders were due to vote on the Singapore Airlines/Temasek joint bid, Cathay said it would consider joining Air China in a rival bid.
Air China’s parent, China National Aviation Corp (Group) Ltd (CNACG), has been looking to block the US$920 million Singapore Airlines bid and believes a Cathay-Air China partnership would be its best option.
Analysts at the Centre for Asia Pacific Aviation said: “Any CNACG-led bid – which Cathay Pacific and Air China would almost certainly join – would result not in the turnaround of China Eastern over the long-term, but its likely absorption and disappearance.
“At stake is the crucial Shanghai hub, where Air China is seeking to build its presence, and the highly lucrative Hong Kong-Shanghai route, which will liberalise from the end of March 2008 under the recently expanded Hong Kong SAR-Mainland bilateral air services agreement.”
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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