A week after the official unveiling of the most dramatic reformation plan in the history of China's aviation industry, confusion continues to reign over what the restructuring process will entail among its leading players. The most significant question remains over the workings of the 'marriage' between Hong Kong-listed China National Aviation Co (CNAC) with mainland flag carrier Air China and China Southwest Airlines, which CNAC officials acknowledge are still being worked out within the newly formed group. The elimination of uneconomical overlapping is one of the main cornerstones of the reform programme, along with easier access to foreign capital. China Eastern and China Southern Airlines had said they would adopt a policy of working within the new groups to eliminate excess capacity and create a stronger footing for the companies. However, CNAC said it was not aware of plans to eliminate competition on overlapping flights following its merger with Air China. CNAC said the operations and management of Air China, China Southwest and CNAC, which together comprise the new CNAC Holdings group, would remain separate in the foreseeable future. Nor were there any specific asset injection or acquisition plans between the trio, effectively shooting down talk of a backdoor listing for Air China to raise funds through CNAC's Hong Kong listing. CNAC controls Air Macau and Dragonair, both of which operate services to the mainland and overlap with offerings from Air China. In particular, Dragonair and Air China compete on its Hong Kong-Beijing and Hong Kong-Dalian services. China Southwest and Air Macau overlap on three routes - Macau to Chengdu, Chongqing and Guilin. CNAC executive director and general manager Thomas Tsang Hing-kong said 'in the initial stages of the merger, there will be no changes to the overlapping' operations. 'As far as we are concerned, we have a new leader in Wang Lian, the chairman of Air China, who has been appointed as head [of CNAC Holdings],' Mr Tsang said. He said the issue of overlapping services was one of many the new management, including Mr Wang, of the Air China-CNAC Holdings group had to work out with CNAC managers in meetings over the coming months. 'As far as CNAC in Hong Kong is concerned, we don't expect a management shake-up. These are changes that will happen up north [in Beijing],' Mr Tsang said. 'The issues are being dealt with now, but I don't know what we will commit to over the next few weeks or months.' He said the announcement made to the stock exchange was short on detail about the restructuring process because it did not want to be tied down to specifics before the planning was completed in Beijing. 'If we make a commitment to the stock exchange now, they will hold us to those terms,' Mr Tsang said. However, a separate source close to CNAC management said it did not expect any changes to the operation of the company in Hong Kong, despite the official merger. 'Although CNAC is officially the commercial arm of the Civil Aviation Administration of China, and officially based in Beijing, it has always only had a very small representative office there. All the senior managers sit in Hong Kong,' the source said. 'I don't expect that anything, including the merger with Air China, will change things with regards to the Hong Kong operations.' He also played down talk of Air China's plan for a backdoor listing through the listed CNAC entity, suggesting it would be better for the group to maintain the Air Macau and Dragonair stakes separately from the Air China entity. However, the source stopped short of calling the merger acrimonious or 'shotgun', which other industry figures suggested, given the widely held industry belief that CNAC was upset at ending up as the junior partner in the merged group. 'I don't think there are any ill feelings. I think that both sides are trying to work together as closely as possible,' the source said. A statement from Dragonair confirmed its routes would remain unchanged. 'Dragonair is not affected by the restructuring taking place in the mainland. [We] will remain an independently managed airline based in Hong Kong,' Dragonair said. 'We are committed to maintaining our position as the airline of choice to the mainland from Hong Kong and we will continue to look to improve our services on an ongoing basis.'