HK carrier seeks China Eastern stake; fliers could face less choice
Cathay Pacific and Air China are teaming up to block Singapore Airlines' bid to buy a stake in China Eastern, as consolidation in China's airline industry heats up, market sources said last night.
Shares of Cathay Pacific rose 10.7 per cent yesterday to a record HK$22.70 before trading was suspended pending an announcement of a price-sensitive proposed transaction. Shares in China Eastern closed at a record HK$9.72, up 12.4 per cent.
Sources said Cathay Pacific was trying to acquire a stake in China Eastern. The holding, along with Air China's 11 per cent stake in the Shanghai-based carrier, could allow the two airlines to vote down Singapore's bid for China Eastern at a shareholder meeting in December. The deal requires the support of two-thirds of minority shareholders.
The lure is China Eastern's Hong Kong-Shanghai services and Shanghai's possible role as an important international aviation hub for the mainland.
China Eastern said it had no comment on the speculation about Cathay Pacific and that its transaction with Singapore Airlines would proceed. Cathay and Singapore Airlines have long been intense competitors.