China Southern Airlines is to pay 48 million yuan (about HK$44.68 million) for a 60 per cent stake in Guizhou Airlines to aid expansion in the southwest, officials say. A company official said contracts had been signed on April 8 and the acquisition would complete after Civil Aviation Administration of China (CAAC) approval. China Southern would this year earmark three Boeing 737 aircraft to operate in landlocked Guizhou province, now served mainly by Guizhou Airlines, the official said. Guizhou Airlines, set up in 1989, started operating in 1991 and has seven 48-seat mainland-made jets. It ran at a loss last year. The airline has been plagued by fund shortages, mainly because of sluggish air traffic in the province. Analysts said the acquisition would have little immediate impact on the H share's bottom line. ABN-Amro Asia analyst Declan Magee said: 'The acquisition is not going to have a meaningful impact on China Southern's profits.' Mr Magee expected China Southern to earn a net 525 million yuan this year, less than half of last year's 1.14 billion yuan amid concerns of slowing traffic in the region and a tougher market. China Southern is one of the mainland's largest regional airlines, with a 27.1 per cent market share. Mr Magee expected the slowdown would continue next year, with China Southern's profit expected to slow to 478 million yuan. The purchase follows China Eastern Airlines' announcement last month that it would take over China General Aviation Corp in northern Shanxi province. The mainland's aviation industry is preparing for a shake-up, as Beijing encourages the establishment of three or four aviation giants by 2000.