Cross-shareholding agreement between Cathay Pacific and Air China expected to raise concerns over competition
A tie-up between Cathay Pacific Airways and Air China will create one of the world's most dominant and dynamic airline groups, but is also bound to raise competition concerns.
The deal promises to marry Swire Group's western management practices with the world's fastest-growing tourism and trade market. It will also see Cathay take over Hong Kong Dragon Airlines, effectively giving control of the three most heavily travelled air routes in China - between Hong Kong, Shanghai and Beijing - to a single group.
Swire will gain a greater presence in the mainland, and Air China access to a talented management pool and strong international sales team.
'When they come together, it will be Fortress Cathay,' aviation analyst Jim Eckes said. 'Swire brings top-level management skills and the three airlines would create a cargo powerhouse.
'[Air China and Cathay] would greatly reduce their overhead costs and get a jump on the low-cost carriers in the mainland market.'
