China's ambitious plan to reorganise state-controlled airlines into three big carriers is proving more difficult to implement than originally thought and doubts have arisen as to whether it will be completed this year as planned.
Industry analysts and officials said the process was taking longer than expected, principally because the main participants were bickering over the finances and conditions imposed on them by Beijing's strict blueprint.
'I had originally believed that the restructuring would be completed by the middle of this year, but now it looks more likely that the plan will take until next year to be completed,' said Jim Lam, a Shanghai-based aviation analyst at CLSA.
The deal, announced more than a year ago, aimed to merge the 10 airlines controlled by the Civil Aviation Authority of China (CAAC) into three groups to be headed by the strongest - Air China, China Eastern Airlines and China Southern Airlines.
According to mainland reports, negotiations to implement the blueprint have stalled under strong opposition from participants unhappy with the partners chosen for them and the financial terms.
Analysts said the biggest problem was how to deal with the high level of debt of the second-tier airlines within the merged groups. While the three lead carriers are in reasonable financial shape, the same cannot be said of airlines such as China Northwest, earmarked to fall under China Eastern.
'Eastern definitely has some problems with the CAAC regarding Northwest's debts,' said Mr Lam.
