Updated at 2.05pm, Friday: China Southern Airlines, one of the three major mainland carriers, looks set to take over China Northern Airlines to consolidate its grip on the Chinese market as part of the government's industry restructuring, China Youth Daily reported on Friday. China Southern Airlines yesterday confirmed that it has lodged an application with the Civil Aviation Administration of China (CAAC) for the approval of a merger plan with another mainland carrier, but gave no specific details. A high-ranking official with China Southern Airlines denied earlier press reports that the CAAC have turned down its bid to team up with Air China, mainland's flagship carrier.? He told China Youth Daily there was no such plan. The report said China Southern had held intensive talks in the past two months with one of mainland's major carriers other than China Eastern or Air China. Given its business focus on medium and long distance flights, China Southern is more likely to team up with China Northern Airlines situated in Shenyang in Northeast China's Liaoning province, the newspaper said, citing an industry source. China Northern is an ideal target for the merger with the China Southern because they complement each other geographically. Based in Guangzhou of the southern Guangdong Province, China Southern offers domestic and international flights while China Northern, based in Shenyang of the in northeastern Liaoning Province, covers the northern part of the country. Officials from China Southern and China Northern were not available for comment. Earlier in July, CAAC called for a massive overhaul of the under-performing mainland aviation sector and said it would encourage mergers of the country's more than 30 carriers into three major airline groups with China Southern, China Eastern, and Air China as group leaders. In August, China Southern announced it would take over the Zhongyuan Airlines in central China's Henan province. ?