Beijing's recent decision to surrender airport control to local governments has brought new complications to the acquisition plans of the country's airport management firms. A lack of timetable for Beijing's plan has resulted in delays in acquisition negotiations. Local governments, which will assume airport ownership and management, may have different views from the existing owner and operator - the Civil Aviation Administration of China (CAAC) - on how they want to restructure their new acquisitions. The CAAC's industry reform would separate its regulatory role from its ownership and operating roles, paving the way for more market-oriented management. Wang Jianzhuang, company secretary of H share Beijing Capital International Airport (BCIA), manager of the country's No 1 one airport, said CAAC's industry reform plan has inevitably slowed its acquisition plans. 'Beijing has not transferred its rights to the local governments yet. We don't know how long we have to wait to get the formal guidance on the issue,' he said. In February, former CAAC director-general Liu Jianfeng revealed Beijing's plan to transfer airport assets, debts, employees and management rights to local governments. In May, he was succeeded by Yang Yuanyuan. The CAAC will retain administration control over Beijing's Capital International Airport and airports in politically sensitive Tibet. Despite uncertainties on the timing of the reform, Mr Wang said his company would continue dialogue with its prospective acquisition targets - airports in Xian, Chengdu and Shenyang. It was uncertain how BCIA planned to raise the capital for its acquisition programme, but expectations are for a rights issue or debt offering on the capital markets. The industry reform means BCIA will have to negotiate with the individual local governments for every airport it wants to buy into. And each provincial or municipal government may have a different game plan. Already last month, Yunnan province's Civil Aviation Administration executive deputy secretary-general Wei Jianguo indicated its intention to merge its 10 airports into a group company. However, analysts said while Beijing's industry reform may prolong the mergers and acquisition process, the ultimate result may not be different. 'In any case, only the profitable airports will receive fresh funding for development and some of the loss-making and under-utilised ones may be closed down,' an aviation analyst at a Japanese brokerage said. Only about a dozen of the mainland's 140 or so airports are profitable, analysts estimated. The pace of industry consolidation is expected to pick up once the ownership transfer is completed, helped partly by Beijing's recent relaxation of foreign investment in the sector and upcoming listings of more airports. By next month, foreigners will be permitted to have a combined stake of more than 50 per cent in mainland airports so long as the Chinese side maintains relative control. The present limit on foreign ownership is 49 per cent. Planned listings of Meilan Airport in Haikou, provincial capital of Hainan province, and Guangzhou's Baiyun Airport will bolster their war chest for future acquisitions. HSBC is understood to be underwriting the planned H-share listing of Meilan Airport on the Hong Kong stock exchange in a deal expected to raise about HK$800 million. It is the first mainland airport controlled and managed by a provincial government entity, and plans to assume management control over Phoenix Airport, in nearby Sanya, from Meilan's controlling shareholder Hainan Airlines Group. The country's four largest airports in Beijing, Guangzhou, Shenzhen and Shanghai are either listed or have been given the green light to float.